SRAK drilling for gas in Saudi Arabia's Empty Quarter
Posted: 7 September 2006
After exploring for two and a half years in the Empty Quarter, the South Rub' al-Khali Company Ltd (SRAK) has begun drilling for nonassociated gas and gas condensates.
SRAK is an incorporated joint venture operating on behalf of its three shareholders: Royal Dutch Shell with 40 per cent, and France's Total and Saudi Aramco each holding 30 per cent.
In November 2003, the company was awarded a two-block concession area that comprises 210,000 square kilometers. Contract Area 1 is a 50,000 square kilometer area near the Shaybah field. The other location, Contract Area 2, is nearly 160,000 sq km and is next to the Yemen border.
Isharat 1 is the first of seven wells to be drilled in the next 28 months, as stipulated by the terms of SRAK's contract with the Saudi Arabian government.
"We are currently in the exploration phase of what is a very exciting venture," said SRAK CEO Patrick Allman-Ward. "We negotiated the right for a five-year exploration period, and in that period, we have certain commitments in terms of work that we are required to fulfill.
"One of those commitments is to acquire a minimum of 16,000 km of 2D seismic information. Sixteen thousand kilometers may not sound like much, but it's actually like acquiring a seismic line half-way around the equator. It's quite a long way."
The parent companies negotiated with the Saudi Arabian government for the right to explore for and produce nonassociated gas and gas liquids - not oil.
"In the upstream agreement, there are certain conditions relating to the accidental discovery of oil," Allman-Ward said.
"In general, it is up to the government's discretion who would then have the rights to develop that resource. Our principal focus, therefore, is not on oil, but on gas and gas condensates."
Allman-Ward explained that two things contributed to SRAK's current search for gas in the Rub' al-Khali. "In the '30s," he said, "gas was considered a nuisance and was flared off. Since then, it has become a valuable product in its own right."
The second element is the Rub' al-Khali itself. It's a tough environment that makes for great challenges.
"It just defeated people," he said, but now, "with modern equipment we can make it a bit easier. Still, I am full of admiration for our folks out there in the field who are doing the work on the ground. They are doing a fantastic job under very difficult circumstances."
In May, the site had been prepped and trucks began bringing in camp trailers and supplies along with the first pieces of the drilling rig, all of which had to come 2,000 km from Dubai.
"Where we are is pretty remote," said drilling manager Koen Bracquene.
"Logistical preparation in this case is very difficult," he said.
"Civil engineering, land transport - it's a big issue. The hardest thing for me to get used to is the distances: 1,400 km to this, 2,000 km to that. And all of it over harsh terrain."
Though drilling has started, the exploration continues.
Every new bit of information will serve to update SRAK's geological model of the southern Rub' al-Khali Basin. That will help to more accurately pinpoint additional well sites.
The site for the second well was established but then was changed when new seismic information was analyzed.
"That's another thing," said Bracquene. "You prepare for something and the plan is changed. That's how it works. That's how it always works. You try to get as much information as possible and, on the basis of that, build contingencies. Of course, the more you know the more you can narrow down the contingencies. It becomes a reduced-risk kind of thing."
"Geology is geology, so you are never 100 per cent sure of anything" said Allman-Ward. "But based on the information that we have, we've got a self-consistent model. All of the pieces hang together, and it all makes sense.
"But this is our first time drilling inside our exploration area, and we will be able to really test some of the key elements that go into making commercial hydrocarbon discoveries."
It will take four months to drill to a depth at which gas can be found. Gas or no gas, they will move on to the next site to begin the drilling process all over again.
Should commercial quantities of gas be discovered, SRAK will enter the production phase, which could lead to upwards of $2.5 billion of investment in pipelines, infrastructure and plants.
The gas is slated to be sold to the Master Gas System and will be used to power Saudi Arabia's growing industrial and energy sectors.
That will have the added benefit of creating additional employment for Saudis in the Kingdom. The Upstream Agreement allows for a 25-year production period and an overall contract duration of 40 years.
Though the search for gas in the Empty Quarter is challenging, SRAK has found it to be a rewarding endeavor. "I might be a grandfather soon," said Bracquene. "But I'm here. So I must love it."