Production delayed for Saudi Aramco

The Saudi oil giant, Saudi Aramco expects to start production at its Manifa heavy oil field in 2013 and complete the project later than originally planned - in 2015 - CEO Khalid al-Falih said.

The project, which involves building a causeway to 27 shallow-water drilling islands, will eventually produce 900,000 barrels a day of heavy crude oil, according to the text of a speech al-Falih gave in Bangalore, posted on the company's Web site on Monday, Arabian Business said.

The investment decision was made when oil prices were above US$70 a barrel, it said. When development contracts were awarded, oil demand was weaker and prices had fallen below US$35, though costs did not decrease proportionally, Aramco said.

"We reviewed the program, and with some execution plan modifications, including deferring completion by two years, decided to continue," al-Falih said.

Plans

Saudi Arabia originally planned to complete the project by mid-2011, according to statements in past years.

Saipem SpA, Europe's biggest oil-field services company, said in November 2008 it was reviewing costs to develop Manifa.

In December last year, Oil Minister Ali al-Naimi said the production date for Manifa would depend on when the market needs more oil.

The project, which was started in 2006, is part of the development of the Saudi oil fields, which are expected to see an increase in production from 11 million barrels a day at the current time to over 12.5 million barrels a day beyond 2010.

The project involves the development of the Manifa offshore oil field and the construction and expansion of new processing infrastructure to handle an additional 900,000bpd of Arabian heavy crude. There will also be production of sour gas, gas condensate (condensate production is estimated at 50,000bpd) and water.

The processing infrastructure will include a gas-oil separation facility, crude stabilisation units and also additional separators. The project will also involve the expansion of the Khursaniyah gas facility for the sour gas processing requirements (estimated at 120 million cubic feet a day).

 

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