RIYADH, 24 November 2004 — National oil giant Saudi Aramco discovered new reserves of gas in the Eastern Province of the Kingdom, Minister of Oil and Mineral Resources Ali Al-Naimi announced yesterday.
Gas surfaced at the wellhead named Madraka one at a rate of 38 million cubic feet a day, accompanied by 1,650 barrels of condensates a day, the official SPA news agency quoted Naimi as saying. “Studies show that the permanent production capacity of the well might exceed the current level of production,” he said.
The well is located 300 kilometers (180 miles) southwest of the oil city of Dhahran, and just 30 kilometers (18 miles) south of Al-Ghawar gas field, Naimi said.
Saudi Arabia in March signed contracts with Russian energy giant Lukoil, Sinopec of China and a consortium grouping Eni of Italy and Repsol of Spain to explore for and produce non-associated gas in the northern part of the Rub Al-Khali, or Empty Quarter, desert.
This followed the signing in November 2003 of a multi-billion-dollar landmark deal with a consortium led by Royal Dutch Shell, Europe’s second-largest energy group, and French giant Total for gas exploration and production in the southern region of Rub Al-Khali in the south of the Kingdom. Naimi said in May that Saudi Arabia was producing seven billion cubic feet of gas a day but expected demand to rise to around 12 billion by 2025.
Meanwhile, Saudi Aramco has sold a cargo of 95,000-100,000 tons of high-sulfur fuel oil to Middle East trader Bakri Trading at a deeper discount than its previous deal, industry sources said on Monday.
The cargo of 650-centistoke (cst) fuel oil, for lifting Dec. 19-21 from Aramco’s Yanbu refinery, was done at a discount of around $40 a ton to Singapore spot 380-cst quotes on a free-on-board (FOB) basis. Aramco’s sales of fuel oil have been restricted recently by high freight costs and a lack of available vessels.
The last two spot sales from Aramco were bought by the United Arab Emirates’ FAL Oil, through another third party, and then sold to a Singapore trading house as regional players were unable to find suitable vessels.
Aramco last sold a similar Yanbu cargo, for Dec. 6-8 loading, to FAL Oil at a discount of $35.00 a ton to Singapore spot 380-cst quotes.
“Tonnage is tight, especially for tankers coming in from the Middle East. The strike price is relatively lower because the buyer had to pay higher freight to lift the cargo although the rates had remained stable, though still high,” said a Singapore-based fuel oil trader.
