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Drilling starts on Saudi 'supergiant' Manifa oil project

The biggest offshore oil development in the country's history moves ahead.

Saudi Arabia is pressing ahead with the biggest offshore oil development in its history, despite having about 4 million barrels per day (bpd) of idle crude production capacity. Development of the "supergiant" Manifa oilfield, containing an estimated 10 billion barrels of reserves, is "on time and on budget", said Mohammed al Abdulkarim, the manager of the Manifa project for Saudi Aramco, the national petroleum company, on the sidelines of the DrillTech conference in Abu Dhabi.

According to a statement on Aramco's website, oil production from Manifa will start in 2013, two years before the project's scheduled completion. Manifa is one of several oil developments the kingdom is pursuing to maintain its production capacity at the record 12.5 million bpd reached last June. Completion of the project, which has an estimated US$11 billion (Dh40.4bn) price tag, was originally planned for next year, but the development was deferred after crude tumbled from the record $147 per barrel it reached in July, 2008. Last year, the Saudi oil minister Ali al Naimi said Manifa's heavy crude would be pumped only if the market needed more oil. On Tuesday, however, Mr al Abdulkarim told the conference that the construction of a causeway and 31 connected artificial drilling islands had been built off the Saudi Gulf coast, in the shallow waters of Manifa Bay. The causeway was "open to traffic", he said.

"All the contracts have been awarded and are progressing satisfactorily as per the current plan." The islands could accommodate "a great many rigs", while additional drilling in the deeper parts of the bay would be carried out from 13 offshore platforms, Mr al Abdulkarim said. The first rigs were already installed on some of the islands and had started drilling. Aramco's plan is to drill large numbers of wells beneath the seabed, with long horizontal sections radiating out from the islands like wheel spokes. The "extended reach" drilling would allow the complex oilfield, which contains at least six reservoirs of oil-soaked rock stacked on top of each other like upturned bowls, to be exploited with less disturbance to the delicate coastal marine ecosystem than with conventional drilling.

Output from Manifa is projected to reach 900,000 bpd of crude, 90 million cubic feet per day of natural gas and 65,000 bpd of condensate, a high quality light crude oil often produced with gas. Saudi Arabia, with the world's largest oil reserves, is OPEC's biggest oil exporter. Despite the recent completion of its record capacity expansion programme, the kingdom's crude output fell last December to a 15-month low of 7.9 million bpd, down 16.5 per cent from the 9.5 million bpd pumped in October 2008, according to the Riyadh-based Joint Oil Data Initiative.

The kingdom has borne the brunt of the record 4.2 billion bpd of output cuts that OPEC pledged in late 2008 in an effort to stabilise the market. OPEC ministers are to meet next Wednesday in Vienna to decide whether to keep the group's production target at a level that has not been changed since December 2008. tcarlisle@thenational.ae

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