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Saudi Aramco Says Developing Shale Deposits Will Be ‘Challenge’

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April 10 (Bloomberg) -- Developing shale gas in Saudi Arabia will be a challenge as most of it is in deep reservoirs with very low permeability, according to Saudi Arabian Oil Co.

The country, the world’s largest crude exporter, still has “great potential” in shale gas and needs to develop the resources to meet rising domestic demand, Adnan Kanaan, general supervisor for gas reservoir management at the state-owned producer known as Saudi Aramco, said today at a conference in Khobar, Saudi Arabia.

Saudi Aramco will work with international service companies such as Baker Hughes Inc., Halliburton Co. and Schlumberger Ltd. to develop shale gas, Kanaan said.

Natural-gas prices in Saudi Arabia are low, making developing the kingdom’s unconventional gas deposits such as shale and tight gas economically challenging, Khalid al-Falih, the head of Saudi Aramco, said in January. The company is drilling a number of wells for shale and tight gas in the northwest of the country, he said. Saudi Arabia sells gas locally at a subsidized price of 75 cents per million British thermal units.

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

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

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