Saudi Aramco started production in April at its Manifa field, the fifth-largest oil field in the world, 3 months ahead of schedule. The field’s output reached 500,000 BOPD of crude from a network of wells drilled through man-made islands.
By the time it is fully operational in December 2014, the offshore field is forecast to produce 900,000 BOPD of Arabian Heavy crude oil, 90 MMscf/D of sour gas, and 65,000 B/D of hydrocarbon condensate.
Manifa is one of the largest engineering projects in the world, involving 41 km of causeways, 3 km of bridges, 27 drilling islands, 13 offshore platforms, 15 onshore drillsites, water supply wells, injection facilities, multiple pipelines, and a 420 MW heat and electricity plant, not to mention the relocation of an entire coral reef.
After the Khurais project, the USD 9.28 billion Manifa field development is the second-largest project being developed by Saudi Aramco, as part of its effort to boost its production capacity to 12.5 million BOPD by 2015.
Discovered in 1957, Manifa is located in the shallow waters southeast of the Safaniyah field, about 200 km northwest of Dhahran, with estimated proven reserves of 10 billion bbl. The field has six oil-bearing reservoirs: Upper Ratawi, Lower Ratawi, Manifa, Arab A, Arab B, and Arab C/D. The reservoirs for incremental development are the two most prolific: the Lower Ratawi and Manifa reservoirs. Production from the field dates back to 1964 following the drilling of eight development wells. However, the facilities were mothballed in 1985 because of the heaviness of the crude.
Early Start
Planning for the Manifa project began in 2006 when global oil demand was soaring, and the front-end engineering and design (FEED) was completed in the third quarter of 2007. The FEED and project management services contract was awarded to Foster Wheeler in November 2006. Foster Wheeler’s remit was the FEED for the central processing facility, detail design, ordering of long lead equipment, coordination of the FEED development across the project including the offshore sections and development of the bid package for the engineering, procurement, and construction stage.
The first construction contract was signed in late 2007 and construction was scheduled to begin in the first quarter of 2008. The project, however, was consistently delayed with construction beginning in the first quarter of 2010.
Originally, the field was planned for completion in 2011, but Saudi Aramco moved the startup date. “Because we are producing much more than we planned a few years ago when we launched Manifa, we were no longer in need of Manifa at the earlier date,” said Kahlid Al-Falih, president and chief executive officer of Saudi Aramco, during an industry conference last year. “(Manifa) will increase the Arab heavy component of our production and offset decline from other areas.”
The Manifa field will be the main feedstock provider for Saudi Aramco’s two new 400,000 B/D heavy oil refinery joint ventures with Total and Sinopec. “The crude coming from the field will provide feedstock for the new refineries that are being built with the help of oil majors. In addition, it will counter natural decline rates and maintain (the country’s oil production) capacity at 12 million BOPD,” said Anas Alhajji, chief economist at NGP Energy Capital Management.
Fluctuating Market
When Saudi Aramco made the decision to invest in Manifa in 2007, oil prices were above USD 70/bbl and demand prospects looked strong. “But right after fixed price contracts were awarded, the global economic crisis turned everything upside down,” Al-Falih said.
Crude prices slumped to below USD 35 and demand projections fell, but project costs did not proportionally decrease, clouding the outlook for the investment. Al-Falih said that at that point, Saudi Aramco was sitting on 4 million BOPD of spare capacity—even without Manifa—and many suggested that the company should terminate its contracts for the project. At that time, many contractors were suffering because of the recession and had Saudi Aramco canceled the program, they would have had to lay off a substantial number of personnel. “Aside from undermining the bonds of partnership we enjoy with our contractors, the loss of capacity and capability among some of our most valued service providers would clearly have negative ramifications for our future projects,” Al-Falih said.
So Saudi Aramco undertook a thorough review of the program with its contractors. That resulted in an economic redesign of the project and its schedule, such as continuing work on surface facilities but stretching out the drilling campaign. “We thus extended selected segments of the program by 2 years and saved more than USD 2 billion in the process,” Al-Falih said. “It was difficult but we stayed with the Manifa project, despite the economic winds blowing around us, and the project is on schedule.”
Manifa’s development is based on optimum use of onshore drilling. Instead of developing Manifa completely from offshore platforms, it was developed from 27 drilling islands connected by a 47-km long causeway, and included 16 onshore drillsites and 13 platforms, Saudi Aramco said in a statement. The company has completed all 27 man-made islands and the main and lateral causeways for Manifa. The islands were constructed to host shallow water wells, which the company said are more cost-effective than offshore rigs.
The Manifa drilling team set a record when it drilled the longest well in Saudi Arabia to a total depth of 32,136 ft and completed a horizontal power water injector across the Lower Ratawi reservoir.
Expensive Development
Compared with other fields being developed in Saudi Arabia and the region, the capital costs for developing the incremental capacity of Manifa is seven times higher than the development of the southern part of the giant Ghawar field, according to data from the Center for Global Energy Studies (CGES), a consultancy founded by the former energy minister of Saudi Arabia, Sheikh Ahmed Zaki Yamani.
CGES said the development costs of Manifa are the highest among fields developed by Saudi Aramco in the past 10 years. Estimates of investment intensity per peak daily barrel range from the USD 2,500 (per peak daily barrel) development of the Haradh III zone of Ghawar to USD 10,000 for the massive Khurais development and finally USD 17,500 for Manifa. “This means that the era of easy and cheap oil is over, and we have to tap the development of difficult and expensive fields,” Anwar Abu Al Alaa, president of Petroleum Economies Center, said commenting on the CGES report.
Eco-Friendly Development
The field’s geology, in shallow waters in the fragile ecology of the Arabian Gulf, required an environmentally friendly solution involving the novel causeway design linking drilling islands to shore. The project’s engineering design received a UNESCO environmental responsibility award nomination.
Simultaneously, by employing best-in-class technologies in infrastructure, drilling, and production activities, the project consumed more than 80 million man hours without a lost time injury, which qualified the project to receive an industry “Innovative Oil Project of the Year” award in 2012.
In accepting the award, Majid Otaibi, supervisor for reservoir management and team leader of the Manifa project at Saudi Aramco, said that the project was particularly challenging and has opened up opportunities for innovation.”It is the technology that is being developed for Manifa that is taking conventional technology beyond what the energy industry currently does,” he said.
Otaibi, whose father was a producing foreman at Manifa, said that the development of the project is a miracle. “When I told my father we are going to produce 900,000 barrels per day, he didn’t believe me. When I tell him about all the current technology we are deploying, he’s amazed. He never thought that these things could be done.”
Local media have reported that Saudi Aramco is considering plans to increase the capacity of Manifa from 900,000 BOPD to 1.2 million BOPD without giving a time frame. It could add an extra 40 MMcf/D of sour gas from the field, pushing output to 160 cf/D.
While this has not been confirmed by Saudi Aramco, the company has revealed plans to expand the Khurais and Shaybah fields. Al-Falih said recently that the company plans to increase production at Khurais to 1.5 million BOPD, up from the current 1.2 million BPOD, and add another 250,000 BOPD at Shaybah. “All of this will allow us to offset the decline that would take place over the years and decades to come,” he said.