Shell to Continue Saudi Gas Hunt Despite Dry Wells
Date: 14-Nov-07
Country: SAUDI ARABIA
Author: Simon Webb
"We will complete our plan to drill seven wells," Shell Saudi Arabia Country Chairman Robert Weener told Reuters at an oil exhibition in Riyadh. "This is an area the size of the UK. You can't just drill three wells and say there's no gas."
Shell is part of a joint venture with Total and state oil giant Saudi Aramco called South Rub al-Khali (SRAK). SRAK had an exit option after three consecutive dry wells.
None of the four consortia of European, Russian and Chinese firms exploring for gas in Saudi Arabia's vast Empty Quarter has found commercial quantities of gas, prompting speculation in the industry that companies may cut short their drilling programmes.
The companies are hunting for gas fields that also hold high value condensates to compensate for the cheap domestic prices they would garner for dry gas.
The companies were awarded gas exploration blocs in the Empty Quarter in 2003 and 2004.
Saudi Arabia is the world's fifth-largest holder of natural gas reserves. It opened its gas fields to international firms to meet rising demand for gas from its growing population and expanding industrial and petrochemical sectors. The upstream oil sector remains off-limits.
(Reporting by Simon Webb, editing by Anthony Barker)