Aramco implements expansion plans at Shaybah oil field

Updated 24 June 2015

Aramco implements expansion plans at Shaybah oil field

DHAHRAN: As part of Saudi Aramco’s mega projects, it is implementing expansion plans at Shaybah field in the Empty Quarter to increase oil production capacity and natural gas liquids (NGL) at an estimated cost of SR186.75 billion. Saudi Aramco's joint projects in the field of refining and petrochemical production are estimated at SR131.25 billion.
The Shaybah field expansion focuses on two major projects. First is oil production increase by 250,000 barrels per day (bpd), for the second time. The expansion will provide the Shaybah field with a capacity of 1 million bpd of Arabian Extra Light crude oil by April, 2016, double its initial capacity in 1998.
Moreover, the Saudi oil company is working to improve the design of wells to increase the average reservoir contact to 10 km, enhancing production from the deep, tight faces of the reservoir.
As for the second project, Saudi Aramco will construct a new NGL plant, to meet the growing demand for petrochemical feedstock through the extraction of high value NGL of the produced gas, which is expected to begin in the second quarter of 2015.
The NGL plant project also includes a major upgrade to increase the power generation capacity to more than 1 GW by installing four cogeneration units, seven single cycle units, and a 50 km transmission line with the ability of 230 kilovolt.
After installing two turbo steam generators by July 2017, the Shaybah total power generation capacity will exceed 1.3 GW.
Aramco uses natural gas as a vital alternative to reduce the Kingdom's dependence on the liquid fuel to generate electricity and to lay the foundation for further development and economic diversification.
On April 2011, Saudi Aramco stated its intentions to expand the Shaybah field after implementing expansion works that included a fourth plant to double production capacity of the Arabian Extra Light crude oil from 500,000 bpd to 750,000 bpd, besides the establishment of a new plant for gas-oil separation.
The Shaybah oil field imposed major challenges during its discovery and development due to the temperatures that soared there to 55° Celsius with heavy dust storms and the shifting sands. Despite the harshness of its climate, the Shaybah field has the best Arabian Extra Light crude oil with a specific gravity of 42 degrees at depth of 4,900 meters.
It includes four plants, and the oil pipeline from the Shaybah field to Abqaiq is 638 km long. The total number of drilled wells reached 255 wells, including 205 horizontal oil wells, 34 vertical oil wells, 8 wells for gas injection, and 5 wells of groundwater.


Saudi Aramco sets IPO share price between 30-32 riyals

Updated 50 min 7 sec ago

Saudi Aramco sets IPO share price between 30-32 riyals

  • Saudi Aramco intends to buy $1 billion worth of shares for employee

DUBAI: Saudi Aramco’s multibillion-dollar initial public offering (IPO), probably the biggest in history, shifted to full gear as its share price was announced and subscription to the world’s biggest oil company commenced on Sunday.

Saudi Aramco set an indicative share price between 30 and 32 riyals for the 1.5 percent of its oustanding shares – or about 3 billion shares of its 20 billion regular shares – that it would offer for the domestic part of its public offering. The blockbuster IPO could be worth least $24 billion, and values the state-owned oil giant at up to $1.71 trillion.

The offering – or book-building – period for institutional subscribers, which started today, closes on December 4 while the retail offering for individual investors will begin on November 21 and will end on November 28. Individual investors will subscribe based on a price of 32 riyals, the top end of the price range, the company noted in a document.

The final pricing for the Aramco shares would be announced on December 5, and Saudi Tadawul  – the Kingdom’s stock exchange – would make an announcement when initial trading day would be, the company added.

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For more of our coverage of the Aramco IPO, click here.

To view key Aramco IPO documents, click here.

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Samba Capital & Investment Management Company has been designated as issue manager while National Commercial Bank, Saudi British Bank, Samba Financial Group, Saudi Investment Bank, Alawwal Bank, Arab National Bank, Albilad Bank, Aljazira Bank, Riyad Bank, Al Rajhi Bank, Alinma Bank, Banque Saudi Fransi and Gulf International Bank were named as receiving banks.

If there are applications for more than the 0.5 percent on offer — amounting to 1 billion shares — allocations to private investors will be scaled back proportionate to demand; if there are fewer applications than the 0.5 percent when all maximum applications are satisfied, private investors can have the over-payment refunded either in cash via the receiving banks or in the form of extra shares in Aramco.

There is an incentive mechanism in the IPO whereby Saudi investors will receive a bonus one-for-ten allocation of shares, up to a maximum of 100 shares, if they do not sell shares in the market for a period of six months after dealings begin in December, at a date still to be determined.

Saudi Aramco also intends to buy $1 billion worth of shares for employees under a plan to incentivize executives and staff members alongside the IPO next month.

The plan — which was disclosed in the IPO prospectus — will involve Aramco buying the shares from the government and making them available for employees under special terms.