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EniRepsa gets extension for Saudi Empty Quarter gas
Condensate needed to make gas fields profitable.
October 12, 2010 10:54 by Reuters
Saudi Arabia has granted more time to one of the consortia hunting for gas in its empty quarter, an industry source said on Monday.
In a rare opening for international firms, state-run Saudi Aramco set up four consortia in 2003-2004 to drill in the vast desert in Saudi Arabia’s southeast, but so far they have failed to find the volumes of gas needed to fuel Saudi economic growth.
EniRepsa Gas Limited, which groups Eni, Repsol-YPF and Saudi Aramco , has been given an extension to April 2012 on the first phase of exploration, an industry source said.
The exploration period had been expected to end in 2010.
No-one was immediately available for official comment.
A five-year programme includes the acquisition of 5,000 kilometres of seismic data and the drilling of four exploration wells to explore and produce non-associated gas in block C, a 52,000-square kilometre area of the Rub al-Khali basin.
The group has completed drilling work at 3 wells, but drilling the last exploration well was delayed to the second half of next year.
“The last well was delayed to reprocess seismic data,” the source said.
ENI holds a 50 percent stake in the consortium, Repsol owns 30 percent while Aramco has the rest.
LIMITED DISCOVERIES SO FAR
Other joint ventures include Royal Dutch Shell , China’s Sinopec and Russia’s Lukoil .
None of the companies has made the big gas finds they and the Saudis hoped for, but Lukoil-Aramco joint venture Luksar has made two gas discoveries.
Shell-Aramco joint venture, the South Rub al-Khali Co (Srak) has also made discoveries.
Srak said last year that gas from two zones under exploration in the empty quarter flowed at a combined rate of 90 million cubic feet per day (cfd).
Terms agreed with Aramco are so poor, analysts say, the consortia need to find condensates — a form of light oil — which can be sold at international market prices to cover the cost of development.
That has meant the firms have been seeking gas rich in condensate, rather than just gas, and that is much harder to find.
(Editing by Barbara Lewis and William Hardy)