Saudi Aramco Finds Natural Gas in Red Sea Well, Al-Falih Says

By MarEx 2013-03-06 15:16:00

PHOTO: Khalid Al-Falih, chief executive officer of Saudi Arabian Oil Co. ( Saudi Aramco), delivers the opening keynote address during the 2013 CERAWeek conference in Houston, Texas, U.S., on Tuesday, March 5, 2013. Aaron M. Sprecher/Bloomberg

Saudi Arabian Oil Co., the world’s largest oil exporter, successfully drilled for natural gas in the Red Sea, Khalid Al-Falih, the company’s chief executive officer, said today at the IHS CERAWeek conference in Houston.

Gas is the fuel of choice in the kingdom, and combined with gas liquids, supplies 50 percent of the company’s demand for energy and chemicals, Al-Falih said.

“I’m glad to announce our first well in the shallow waters of the Red Sea came out a success with good gas production,” Al-Falih said. “We are now drilling in deeper water with a drill ship. We will know hopefully in the next few weeks. We all have our fingers crossed.”

The state-owned company, which is known as Saudi Aramco, is keen to find reserves of gas to generate electricity for its growing population and as a raw material for its blossoming petrochemicals industry.

While neighboring Qatar has abundant supply of gas, Saudi Arabia has struggled to find deposits, even with help from Royal Dutch Shell Plc. The kingdom has resorted to the costly practice of burning crude in its power stations, especially during the summer months, when air conditioning peaks.

“I’m happy we are performing extremely well in terms of assessing the resource base and conducting this drilling program,” Al-Falih said.

Asjylyn Loder, Copyright 2013 Bloomberg.