Feb. 16 (Bloomberg) -- Saudi Arabian Oil Co. plans to re-open the Gulf kingdom’s oldest oil field and produce there for the first time in 30 years as the company boosts output of heavy crude, the Economist Intelligence Unit said.
The state-owned producer, known as Saudi Aramco, may revive a plan from 2008 to restore production at the mothballed Dammam field, the EIU said in a report. Dammam contains some 500 million barrels of oil and may yield as much as 100,000 barrels a day of Arabian Heavy crude, according to the report.
“Dammam field including Dammam Well 7 can operate easily with current technology and Saudi Aramco conducted a 3-D seismic survey over the entire area almost 10 years ago,” Sadad al-Husseini said today by e-mail. Al-Husseini was executive vice president for exploration and development at Saudi Aramco.
Dammam field today is surrounded by metropolitan areas and Husseini said if the field is re-activated, he’s sure Saudi Aramco will do it “in the most modern, environmentally sensitive and professional manner that least affects the adjacent community.”
Aramco, the world’s largest oil exporter, is considering redeveloping the onshore field in response to “tight market conditions,” the London-based researcher said in the report issued yesterday. It shut Dammam, and several small fields, in the early 1980s due to low demand. Officials at Aramco’s headquarters in Dhahran, Saudi Arabia, didn’t answer phone calls seeking comment today, the first day of the Saudi weekend.
Saudi Aramco shut in the entire Dammam field, including Dammam Well 7, in the early 1980s because oil demand dropped in the first two years following the Iranian Revolution in 1979 from 10 million barrels a day to as low as 3 million barrels a day, Husseini said.
“We simply didn’t need small fields like Dammam, and in fact shut in fully or partially many other fields including Khurais, Khursaniya, Qatif, Abu Hadriya, Harmaliyah and several others,” said Husseini who founded and runs Husseini Energy, an independent energy consultant in Dhahran, Saudi Arabia.
Saudi Arabia, which holds the world’s largest proven oil reserves, pumped 9.65 million barrels a day in January, according to data compiled by Bloomberg. The country discovered its first commercial quantities of oil at Dammam Well 7, known as the “Prosperity Well,” in 1938. Dammam 7 produced about 32 million barrels of oil before it closed, Aramco Chief Executive Officer Khalid Al-Falih said May 19 in Washington, D.C.
Aramco is also speeding up a project to increase capacity for heavy crude at the Manifa field in the Persian Gulf. Additional production from Manifa, the world’s fifth-largest oil field, will help maintain Aramco’s maximum sustainable oil production capacity at 12 million barrels a day, Aramco said in June in its 2010 annual review.
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