OilVoice - Saudi Aramco to Ramp up Exploration in Attempt to Meet Rising Demand

Saudi Aramco to Ramp up Exploration in Attempt to Meet Rising Demand

Monday, April 12, 2010

Saudi Aramco, the world's largest oil company in terms of proven reserves, has announced plans to drill as many as 48 new exploration wells and a further 300 development wells this year. Interestingly, the news came in the same week that the state-backed Saudi firm reassured the globe that the world's largest oil field, Ghawar, had plenty of life left in it and still has many years of production still ahead of it.

It seems that while Saudi Aramco believes that current output is sufficient to meet demand, the firm expects rising demand in years to come to stretch even its own vast resources. Unsurprisingly, the bulk of this rising energy demand is expected to come from two energy-hungry BRIC nations in particular: China and India.

This projected demand has prompted the Saudi major to shift its strategy towards new exploration projects, as mentioned above. Being state-backed, the Saudi Supreme Council, which is comprised of members of the royal family, industry leaders and government ministers, is responsible for petroleum and natural gas policy-making, including contract review, as well as Saudi Aramco's strategic planning.

Adding to the announcement over new exploration projects, Aramco has also stated that it will maintain its number of active rigs at 96.

Furthermore, 50% of Aramco's drilling programme this year will be targeted towards natural gas. The important news though is that the firm's exploration activity, which accounted for just 5% of all drilling as recently as 2008, is set to rise to 14% of drilling this year.

With the world seemingly increasing its demand for energy as countries across the globe climb out of the downturn, it seems the industry's largest firm is shouldering some of the burden to meet this demand. As a result, Aramco appears eager to ramp up production in the near future.

Referring back to Saudi Arabia's lucrative gas industry once again, the nation seems eager to boost production to meet the needs of both domestic electricity consumption and also to supply its growing petrochemicals industries. The industries are concentrated along the Gulf coast in cities such as Jubail.