Saudi Arabian state oil company Saudi Aramco released its annual report in July, noting that it produced more oil and gas last year than ever before, and also raised its technical capabilities to new heights as part of it 2020 strategy to be a fully integrated energy and chemicals company.
The company’s annual production exceeded 3.4 billion bbl of oil, equal to an average of 9.5 million BOPD. “In 2012, we produced 3.479 billion bbl of oil, about one in every eight bbl of the world’s crude oil production and the most we have produced in a single year in our history,” Saudi Aramco said in its annual report.
“During 2012 at Saudi Aramco, we responded to market conditions by producing crude oil at the highest level in our company’s history,” said Khalid Al-Falih, president and chief executive officer of Saudi Aramco.
The company’s recoverable crude oil and condensate reserves have reached 260.2 billion bbl, while gas reserves reached 284.8 Tcf. “Our maximum daily sustainable crude oil production capacity remained at 12 million BOPD during the year. Our gas plants now have a gas processing capacity of 13.23 Bscf/D,” the report said.
Gas production has also reached historic levels, as the company reported an 8.3% increase in output in 2012 compared with 2011 at about 3.924 Tcf/yr, the highest in Saudi Aramco’s history. The company also said that it produced 482 million bbl of natural gas liquids including 82 million bbl of condensates.
Crude oil exports increased 100 million bbl in 2012 to 2.52 billion bbl, with 53.2% exported to the Asia Pacific region followed by 16.5% to the United States, 7.4% to the Mediterranean region, and 5% to Europe.
In 2012, Saudi Aramco focused on exploring frontier areas in the Red Sea and complex reservoirs onshore and offshore. Discoveries included one oil field—Aslaf—and two gas fields—Sha’ur and Umm Ramil—bringing its total oil and gas field discoveries throughout its history to 116. Sha’ur was its first discovery in the marine portion of the Red Sea.
Unconventionals Advance
Through exploration for unconventional resources, Saudi Aramco determined that substantial shale and tight gas deposits exist in Saudi Arabia, and made its first foray into the unconventional gas arena. “The Unconventional Gas Initiative will contribute to our strategic intent in many ways. Saudi Arabia’s supplies of unconventional gas will supplement its supplies of conventional gas resources and help meet the kingdom’s energy demand,” the annual report said.
The company appraised three prospective areas for unconventional gas: the northwest, South Ghawar, and condensate-rich shale gas in the Rub’ al-Khali. “These efforts were aimed at acquiring the data needed to help us make the right decisions as to where and how to invest in order to accelerate the delivery of commercial production of unconventional gas,” Amine Nasser, senior vice president for upstream at Saudi Aramco, said during a recent industry conference. “These projects are part of our wider Unconventional Gas Initiative, which became fully operational in 2012 when multidisciplinary teams, made up of Saudi Aramco professionals and industry experts with extensive experience, began appraisal drillings.”
The report said that although “the cost of delivered unconventional gas is higher than most conventional gas, it is an important strategic and economic choice for the company. Unconventional gas will serve as a substitute for higher value liquid fuels such as diesel, residual fuel oil, and crude oil that would otherwise be used to fuel the electric power and water-desalination needs of the kingdom.”
Boosting Tech Capabilities
Saudi Aramco knows that further developing its fields, increasing recovery rates, and exploring unconventional resources will require significant technological advancement. Saudi Aramco is boosting technological capabilities as part of its 2020 strategy, aimed at ensuring the long-term sustainability of its production. It is investing more in developing new technologies as well as investing globally in startup and high-growth companies with technologies of strategic importance to Saudi Aramco.
The company inaugurated a new research and development center last year at Delft University of Technology in the Netherlands. The center, a part of Aramco Overseas Company, concentrates on geophysics research in near-surface characterization and data-driven seismic processing, and is one of two research groups closely aligned with a university.
The second research group, at King Abdullah University of Science and Technology, undertakes projects related to biocapture, robotics, fuel technology, chemicals, membranes, and advanced materials. The company is also opening several centers around the world in 2013.
In 2012, Saudi Aramco also reviewed all of its reservoirs, meticulously identifying the crude oil mix that it will be able to deliver in the short and long term. “Going forward, we will rely on this information to help us continue to introduce new best-in-class reservoir management principles for optimal development and production,” it said.
Saudi Aramco was granted 58 patents last year, a record for the company. Examples of the innovations include technologies involved in locating and plugging lateral wellbores, flare stack and combustion apparatus, automated real-time reservoir pressure estimation, advanced petrophysical algorithms fostering the shift from well-centric to model-centric workflows, and an illuminated directional wind speed indicator.
New technologies were enablers for the redevelopment of the Manifa field, the fifth-largest oil field in the world, in which five patents were filed, including one for the ILOOP that has potential international application for enhanced environmental cleanup. The company said it reduced sulfur dioxide emissions from its facilities by almost 70% between 2005 and 2012, despite the ongoing expansion of its operations.