Summary
The Rigzone Newsletter of June 11 quoted M. Ghazanfar Ali Khan of McClatchy-Tribune Information Services who reported that the giant Khurais oil field had started production. The new 1.25 million bbl/day oil field will boost the Kingdom’s production capacity to 12.5 million bbl/day. This comes in addition to the 900,000 [Moneefa] oil field expansion planed for 2013. Oil from Khurais is being pumped into tanks located at the site. The project includes crude oil from Abu Jifan and Mazalij, two smaller oil fields in the area. The Kingdom does not now require the extra capacity. Khurais also produces 315 million cubic feet of sour gas and 70,000 bbl/day of natural gas liquids. Khurais field contains 27 billion barrels of reserves. This is the biggest single addition to global production of light crude ever in the upstream petroleum industry. While the global economic recession has slowed demand, it is expected that Khurais will produce for 20-25 years. The project required 420 wells.
Analysis
Khurais oil field has been in the news off and on since its discovery in 1957. The size of the huge field has never been in question but performance has left much to be desired. The field was placed on production in 1963 with the crude oil transported by truck to Riyadh and used as fuel for electric power generation. The field stayed on continuous production until early 1982 at which time cumulative production was 140 million barrels from 33 wells. To arrest declining production, a gas lift system was installed in 1983. Early wells tested the entire stratigraphic column and additional pay zones were found in the Hanifa, some 300 feet below the main formation (Arab Zone). Another pay zone was found in the Fadhili formation. Over time it was realized that the Hanifa and the Arab Zone were connected by vertical faults near the crest of the structure. But the Fadhili, deeper in the column was isolated and during this era, not placed on production. About 100 miles to the north the relatively small Fadhili oil field, discovered in 1949 produced good quality oil at high rates and this gave a clue as to the potential of the formation at Khurais. But in 1957, the Fadhili formation tested 67 pounds of salt/1,000 barrels of crude oil and this exceeded the limit then in place of 25 pounds/1000 bbl. By 1984, demand for crude oil had slumped as a result of the worldwide recession that began in 1980. Khurais was shut in until 1991. By 1994 it was clear that to obtain good results from Khurais, a redevelopment program would be required. By this time the two small oil fields Majalij (1971) and Abu Jifan (1973) had also been placed on production as well as the tiny Qirdi (1973). Periodic progress reports of the last three years always mention the two small fields but no mention is made of Qirdi which surely must be included in the project. The diagnostic redevelopment study was completed in 2002 and published (SPE paper 77743) in the Journal of Petroleum Technology. Because water injection would be the drive mechanism, Saudi Aramco made a detailed three dimensional seismic survey to identify and locate fractures and faults that might complicate the water injection. The first contracts were let in the autumn of 2006 and drilling and construction began in early 2007. Halliburton won the drilling contract; Lavalin (Canada) and Saipem (a unit of Eni of italy) won the water injection construction project. Foster Wheeler was named as overall project manager. Both oil wells and water injection wells are of the type called Maximum Reservoir Contact, an advanced type of well based on horizontal drilling. Of the 420 wells in the project, 125 are water injection wells. Additionally, several dozen observation wells were drilled to monitor water movement in the several pay zones. This time, in addition to the Arab Zone, both the Hanifa and the Fadhili formations were included. The oil wells are equipped with electrical submersible pumps to obtain high rates of production. When the redevelopment project got under way, no one doubted that the full 1.25 million bbl/day would go on line immediately to meet soaring demand that drove the price of crude oil to nearly $150/bbl in mid-2008. Alas, it was not to be. Saudi Aramco now has on its hands the most sophisticated oil project in the history of the industry and the crude oil is not required. That does not mean the estimated $15-20 billion investment is wasted. Natural declines in the several Saudi oil fields are exhausting them at rates estimated to be of the order of 700,000 to 1 million bbl/day/year. With demand for crude oil now showing signs of recovery, the oil from Khurais will soon be required. The big question as yet unanswered is how long can the field produce at the 1.25 million bbl/day rate. Within three years, much of the production will be wet and a steady decline will set in. Lifting costs will inevitably go up. But so will the price of crude oil. As a comment on the [Moneefa] field cited in the original article, the accepted name for this field is Manifa and it promises to be as difficult and as complicated as the Khurais project.
