By February 9, 2017 Read More →

Saudi Aramco rig count unlikely to drop, may rise marginally this year

Saudi Aramco

Saudi Aramco operates about 220 drilling rigs and is continuing to invest in capital, despite low oil prices. photo.

Saudi Aramco says an increase in onshore gas likely

By Reem Shamseddine

KHOBAR, Saudi Arabia, Feb 9 (Reuters) – State oil giant Saudi Aramco is not expected to reduce its drilling rig count this year and could increase the number marginally as it focuses on natural gas production, industry sources said.

“The increase is mainly in onshore gas – it is realistic and matches their needs,” said one source, who declined to be identified because of commercial sensitivities.

Aramco is operating about 220 drilling rigs as it continues to invest in capacity despite low oil prices, Saudi Arabia’s energy minister said last month.

That total comprises eight water well rigs and 212 active rigs – a number which Aramco has kept steady since 2015.

“Aramco seems upbeat from the rigs standpoint,” another source said.

Late last year OPEC and non-OPEC producers reached an agreement to cut oil output, initially for six months starting Jan. 1. Saudi Arabia, which said it pumped 10.47 million b/d in December, has cut its production slightly below 10 million b/d, Saudi Energy Minister Khalid al-Falih said last month.

However, a third source said: “I still see more efforts being done on gas. The OPEC production freeze agreement is going on and this might affect oil rigs, but the gas side needs rigs so overall the number will be steady.”

Saudi Aramco declined to comment.

Falih, also chairman of Aramco, has said continuous investment in drilling enables Saudi Arabia to offset the gradual decline in output from mature fields and that the kingdom is maintaining production capacity at 12.5 million barrels per day.

In the past couple of years, Aramco has saved on drilling costs by obtaining discounts from oilfield service companies and suppliers.

Aramco’s chief executive Amin Nasser said in December that the company’s capital programme and activities were increasing, supporting its demand for rigs.

(Editing by Andrew Torchia and Adrian Croft)

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