Saudi Aramco Ventures Continue Gas Exploration in Saudi Desert

Natural-gas exploration in Saudi Arabia’s Rub al-Khali desert is ongoing after companies including Eni SpA (ENI) said they failed to find hydrocarbons in the area, according to Saudi Aramco.

Some of Aramco’s ventures with European and Asian partners decided to enter second exploration phases while others are evaluating their work to continue exploring for gas in the desert, the Riyadh-based company said today in its 2010 review.

Aramco set up ventures with international partners to develop the country’s non-associated gas resources to meet local demand and reduce the amount of oil burned for power generation. The company has ventures with Royal Dutch Shell Plc (RDSA), China Petroleum & Chemical Corp., known as Sinopec, OAO Lukoil as well as a group of Eni SpA and Repsol YPF SA. (REP)

The groups were required to drill a total of 27 exploration wells during the first phases of their projects. The Eni and Repsol venture with Aramco, known as EniRepsa Gas Ltd., is the only one that hasn’t fulfilled its drilling commitment from the first phase.

EniRepsa got an extension from the Saudi ministry of petroleum to process its seismic data by June 27 before continuing with drilling its final well in the first phase, Saudi Aramco said in its review.

Eni holds 50 percent of EniRepsa, Repsol 30 and Saudi Aramco the rest. The group will decide whether to drill the fourth well after seismic studies, Aramco said.

Sino Saudi Gas Ltd. an 80-20 venture between Sinopec and Aramco, decided to enter into a second exploration period, and the petroleum ministry approved its plans, according to the review.

Aramco’s venture with Lukoil, Lukoil Saudi Arabia Energy Ltd., will start appraisal and won’t start the second exploration phase. Luksar, as the group is known, drilled its first appraisal well and is performing further studies, looking to improve well rates via fracture stimulations, Aramco said.

The Shell venture, known as SRAK, had decided to enter a second exploration phase after finding promising gas reserves in Rub al-Khali desert, according to the review.

To contact the reporter on this story: Wael Mahdi in Khobar at wmahdi@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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