Saudi Aramco Review 2016

Manifa ... a major upstream success for Aramco

Manifa ... a major upstream success for Aramco

Upstream continues to evoke significant interest

New discoveries and reserves maintained Saudi Aramco’s crude oil reserves at 261.1 billion barrels. Total gas reserves rose to 297.6 trillion scf and the oil giant discovered three new fields giving a fillip to it exploration programme

For Saudi Aramco, sustaining a commitment to excellence means continuously improving upon its achievements, especially when it comes to developing the kingdom’s resources for the future.

Every day, products made from its resources enable people across the globe to live more fulfilling and productive lives, says the company’s Annual Report for 2015.

From fuels and lubricants to performance textiles and advanced plastics, it all starts with the company’s resource base.

Managing these resources requires excellence in every aspect of Aramco’s upstream operations.

The company’s maximum sustainable crude oil production capacity of 12 million barrels per day (mbpd) is supported by its practice of optimising the mix of crude oil grades from a balanced portfolio of mature and young reservoirs.

"We continue to explore for and discover additional crude oil and gas reservoirs — striving to replace 100 per cent of produced oil with new reserves and growing reserves annually," says the report.

In 2015, to meet its production targets, Aramco produced an average of 10.2 mbpd of crude oil, a new all-time record. Its total raw gas processing averaged 11.6 billion standard cubic feet per day (bscfd), also an all-time record. Supplies of sales gas averaged 8.0 bscfd and ethane averaged 794 million scfd.

Total natural gas liquids (NGL) production averaged 1.3 mbpd. Aramco’s success in growing gas production allows it to deliver on its commitment to provide additional volumes of gas as fuel and feedstock for domestic industries and displace liquids as a source of power generation. One of Aramco’s priorities in 2015 was to focus on organisational and technological shifts that increase capital efficiency.

"Our upstream contributions encompassed innovative solutions from exploration, drilling, and production to the initiation of a new supply chain operating model for our work in unconventional resources," it says.

Other efficiency gains supported by operational excellence principles included combining work, reducing or eliminating redundant tasks and equipment, employing new or alternative technologies, management training, improving collaboration with vendors, reengineering, and bringing work in-house.

Though Aramco has prioritised fiscal discipline and introduced cost efficiencies, its attention remains squarely fixed on sustaining excellence in safety. The safety of its people is paramount to Aramco. Beyond its standard safety protocols and training programmes for employees, Aramco instituted additional safety improvement measures, including onstream inspections, replacement of aging equipment and trunk lines, and proactive plant integrity and health assessments to ensure safe and reliable operations.

Stimulating new opportunities for people in the kingdom and across the world through the safe, sustainable, and reliable provision of energy is Aramco’s strategic purpose. Its success in this endeavour starts with its upstream business.

By combining the energy of its people and its unique expertise with a single-minded pursuit of excellence, Aramco’s hydrocarbon reserves will help power prosperity for generations to come.

Aramco is developing the Shaybah field

Building on more than eight decades of exploration experience in Saudi Arabia, Aramco’s geoscientists continue to enhance their understanding of the kingdom’s hydrocarbon resources.

Through a long-term outlook, effective planning, and the use of cutting-edge technologies, Aramco continues to find new fields, add reserves, and develop more efficient methods to produce and process oil and gas. Aramco marked progress toward increasing the recovery rate of oil in place from its major oil reservoirs with a plan to reach a recovery rate of 70 per cent, helping to ensure sustainable and reliable supplies of energy for the kingdom and consumers around the world. Its energy reserves will help power prosperity for generations. Its exploration programme — encompassing the kingdom from the Rub’ Al Khali to the Red Sea and the northwestern region — continually pushes the boundaries of technology.

During 2015, Aramco discovered five new oil and gas fields, raising the total number of discovered oil and gas fields in the kingdom to 134.

Aramco discovered three new oil fields: Faskar, offshore in the Arabian Gulf near the Berri field; Janab, east of the Ghawar field; and Maqam, in the eastern Rub’ Al Khali. Aramco also discovered two new nonassociated gas fields: Edmee, located west of Haradh, and Murooj in the Rub’ Al Khali.

The company continued its programme to explore the shallow waters of the Red Sea, completing its largest single survey of the seabed encompassing Saudi Arabian territorial waters. Onshore, Aramco commenced drilling in the Jazan and Um-Luj areas.

Aramco also added reserves through delineation drilling, discovering three new gas reservoirs and seven new oil reservoirs in existing fields. By applying best-in-class reservoir studies, including sophisticated algorithms developed in-house to process and analyse high-definition 3-D seismic data,

Aramco was able to successfully delineate and extend the booked limits of existing reservoirs. Its exploration programme balanced opening new frontiers and play concepts while maintaining an uninterrupted focus on delineation and appraisal programmes in existing fields to realise their full potential and assess them for future development.

These increases were underpinned by its investments in the latest technology. Aramco increased the computing capability of its Exploration and Petroleum Engineering Centre (Expec) Computer Centre by 177 per cent for reservoir simulations and by 76 per cent in seismic capacity.

These improvements enable significantly larger reservoir simulations and reduce data processing times by a factor of 10, improving its ability to model and characterise the performance of reservoirs over time to optimise field development and increase recovery.

Its investments in seismic have yielded more efficient planning, best-in-class reservoir management practices, and improved success rates in discovering new fields and reservoirs and extending reserves in existing reservoirs.

Its new discoveries and reserves maintained Saudi Aramco’s crude oil reserves at 261.1 billion barrels. Total gas reserves rose to 297.6 trillion scf. Aramco’s relentless efforts to expand the kingdom’s oil and gas reserves sustain its capability to meet future energy needs, at home and around the world.


The Hawtah field being developed

Aramco’s pursuit of unconventional gas continued to gather momentum in 2015 as it invested considerable resources to find and produce gas from shale and tight gas formations.

The target areas for its unconventional gas programme are in northern Saudi Arabia and the greater Ghawar area, including the Jafurah Basin. Aramco acquired 138 billion seismic traces in these three areas and completed an ambitious slate of exploration, appraisal, and production wells.

Aramco deployed a range of new technologies and applied lessons learned from within the industry to accelerate its progress. New technologies include seismic imaging to identify "sweet" spots in reservoirs, extended reach horizontal wells to improve reservoir contact, multistage fracture stimulation, and underbalanced coiled tubing drilling to tap into productive layers.

Multistage fracturing in horizontal wells, for example, enables higher sustained gas rates, transforming low producing wells to commercially viable assets. Rigorous simulation modelling empowers its engineers to improve completion and simulation practices, and optimise well placement and spacing to attain higher well productivity.

The entire process chain employs integrated teams of petroleum engineers and geoscientists who collaborate to ensure every link in the chain, from exploration through to delineation, development planning, facility construction, installation, commissioning, startup, and production, is completed safely, efficiently, and cost-effectively.

Gas from its discoveries in northern Saudi Arabia will be delivered to the Ma’aden facilities at Wa’ad Al Shamaal by the end of 2017 when the facilities will be ready to receive gas. Additional gas for small and medium industrial businesses will be supplied by 2018, fuelling the growth of new employment opportunities for Saudi nationals in the region.

In addition to its continued success in expanding the kingdom’s conventional gas reserves, Aramco’s growing ability to find and produce unconventional gas broadens the use of gas as a cleaner fuel for power generation and seawater desalination, and as feedstock for diversified industries, spurring economic growth and freeing up more crude oil for value-added refining or export.


The Haradh development is a key feature in Aramco’s upstream strategy

Since Dammam Well No 7 began producing commercial quantities of crude oil in 1938, Aramco has built an unparalleled reputation for being a reliable supplier of crude oil to energy markets around the world.

Today, the production of this essential energy resource remains at the core of its business, and Aramco supplies more crude oil to the global economy than any other oil producer, producing nearly 1 in every 8 barrels of world oil production.

Aramco manages the development of the kingdom’s crude oil resources to maximise lasting value. To maintain its record level of production safely and reliably, in 2015 Aramco completed a challenging roster of well workovers, well integrity and monitoring service jobs, and major tests and inspections.

The effectiveness of its long-term vision to manage assets was demonstrated when two of its long-established wells reached impressive lifetime production levels in 2015. Abqaiq Well 49, drilled in 1949, and Abqaiq Well 84, drilled in 1961, reached cumulative outputs of 144 and 233 million barrels, respectively.

To achieve the greatest benefits from its investments in production technology, Aramco established a Production Operations Surveillance Hub in Ju’aymah that empowers production engineers to make effective decisions in real time.

The Hub is designed to integrate intelligent field technologies such as electrical submersible pump sensors, smart well completions, downhole monitoring systems, and multiphase flow meters in a single solution.

By centralising all surveillance in a single hub, Aramco is able to anticipate and respond to problems more quickly and manage equipment and assets more efficiently. Its offshore Manifa field, with a production capacity of 900,000 bpd, has been recognised for its design and engineering features that help protect and preserve the environment of Manifa Bay.

The Manifa facility, which is self-sufficient in electrical power generation, also produces associated gas as a feedstock for industrial cities.

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