Halliburton Wins Aramco Gas Contract

Halliburton Wins Aramco Gas ContractHalliburton Wins Aramco Gas Contract

Saudi Aramco has awarded a contract to Halliburton for unconventional gas stimulation services, as Saudi Arabia seeks to further reduce its domestic crude oil burn, freeing barrels for export or refining.

"The contract, which includes major hydraulic fracturing and well intervention operations, will further improve the economics of Saudi Aramco's unconventional resources program," Aramco said in a statement, Platts reported.

The unconventional program covers three areas of the kingdom —North Arabia, South Ghawar in the Eastern Province and the Jafurah Basin in the Rub al-Khali in the southeast.

However, the question remains over whether the unconventional gas resources are recoverable at a cost that is low enough to make production viable.

"We welcome their expertise in unconventional resources and we have great confidence in our joint ability to achieve operational and cost efficiencies for this important growth area," Aramco CEO Amin Nasser said.

The energy giant has in recent years made gas an increasing focus, signing a number of international memorandums of understanding for cooperation on gas projects.

Saudi Arabia holds the world's fifth largest gas reserves, with more than 8.5 trillion cubic meters, according to the US Energy Information Administration.

But the sector remains underdeveloped, largely as a result of generous energy subsidies that have kept domestic gas prices artificially low.

Liquid fuels continue to account for half of the current energy mix. Saudi Arabia burned an average of 458,000 barrels of crude per day last year in its power plants, with a peak of 680,000 bpd in June, according to the Riyadh-based Joint Organizations Data Initiative.

The government hopes to increase the share of gas used to 70% over the next 10 years, nearly doubling its current gas production to 651 billion cubic meters per day by 2026. It processed an all-time high of 339 bcm/d of raw gas in 2016, producing 235 mcm/d of sales gas. That was up from around 226 mcm/d of sales gas in 2015, according to its annual review released last June.


Add new comment

Read our comment policy before posting your viewpoints