DHAHRAN, 5 November 2004 — Work to explore gas in the Contract Area A, in Rub Al-Khali, is expected to start later this month. Saudi Aramco and Luksar Energy, a joint venture of OAO Lukoil Overseas Holding Ltd. have signed a contract in this connection with the Houston-based WesternGeco, a division of Schlumberger, to conduct 2D and 3D seismic surveys.
The contracted company WesternGeco is to start the work on seismic surveys by Nov. 25 and the work is expected to continue through 2005. Exploration drilling is anticipated by early 2006. The exploration period covers five years. During this period, Luksar Energy will conduct seismic surveys and drill at least nine exploration wells. Lukoil Overseas obtained a 40-year contract early this year to explore for and produce non-associated natural gas in Contract Area A. Saudi Arabia signed in March the agreements with Russia’s Lukoil, China Petroleum and Chemical Corp. (Sinopec) and a consortium of Spain’s Repsol YPF and Italy’s ENI for upstream gas exploration and production in a vast desert. The exploration work alone would require an investment of around SR3 billion, Minister of Petroleum and Mineral Resources Ali Al-Naimi had then told the press. The deals were expected to attract still higher levels of investment in the downstream sector.
The contracts with the three companies to explore and produce non-associated gas in 120,000 square kilometers of the northern part of the Rub Al-Khali, or Empty Quarter, were signed in Riyadh in March this year.
Saudi Arabia is currently producing and consuming 7 billion cubic feet of gas per day and expects domestic demand to hit 14 billion cubic feet by 2025. As per the agreement, Lukoil and Saudi Aramco will jointly explore 29,900 square kilometers of area.
In November 2003, Saudi Arabia signed a multi-billion dollar landmark deal with a consortium led by majors Royal Dutch/Shell and Total for gas exploration and production in south Rub Al-Khali in the south of the Kingdom. Saudi Arabia has proven natural gas reserves of 235 trillion cubic feet, the fourth largest in the world.
