Saudi drilling surge like '90s production hike

Bob Tippee
Editor

A surge of activity in Saudi Arabia brings to mind another impressive mobilization the kingdom undertook when the world needed its oil.

The current effort involves the drilling required to push production capacity toward 12 million b/d.

Saudi Aramco recently added the 100th rig to its working fleet, which will grow by yearend to 121. In 2004, the fleet had 55 units.

The drilling is both onshore and offshore, some exploratory (OGJ Online, Apr. 16, 2006).

The 100th rig to join the drilling effort is a refurbished onshore unit, Saudi Aramco Rig 101, which had been out of service since 1999 and partly cannibalized. It was recommissioned at Abqaiq.

Aramco calls its current surge "the most aggressive ramp-up of drilling activity in the history of the oil industry."

Equally impressive was its ramp-up of production after the Iraqi invasion of Kuwait in August 1990.

Because of low demand for its crude, Aramco had cut production capacity. Some observers thought the kingdom would never again produce more than 6-6.5 million b/d except in short bursts.

Saudi Arabia was producing 5.5 million b/d when the invasion took 4.6 million b/d of Iraqi and Kuwaiti oil out of the market. By early September Saudi output exceeded 7.5 million b/d. By mid-December it topped 8.5 million b/d.

The increase required more than just opening valves. Early in August, Aramco had 26 gas-oil separation plants (GOSPs) working and 31 old or partly built plants technically "mothballed"—with instruments and rotating equipment in long-term storage and wells and flowlines depressurized and filled with dry crude.

Aramco brought four GOSPs and pumping facilities back on stream by the month after the invasion, seven more in October, four in November, and two in December (OGJ, Dec. 2, 1991, p. 49).

Afterward, the company said its main challenge was finding and reassigning personnel qualified to do the work.

During that period, this writer asked an executive of one of Aramco's former oil-company partners how long Saudi Arabia could produce 8.5 million b/d. His emphatic answer: 6 months, tops.

The kingdom's annual average production hasn't fallen below that level in any year since then.

(Online July 7, 2006; author's e-mail: bobt@ogjonline.com)

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