Lukoil hopeful of new gas deal in Saudi Empty Quarter - 19-Mar-2014 Saudi Arabia Russias Lukoil is negotiating a deal with the worlds top oil exporter Saudi Arabia to tap unconventional gas deposits in the Kingdoms Empty Quarter region, the companys overseas unit said. Saudi Arabia has kept its vast oil reserves off-limits to foreigners, but needs natural gas to help cover domestic power demand and conserve oil for export. It invited investors a decade ago to find and produce gas in the Empty Quarter region in Saudi Arabias southeast, also known as Rub Al-Khali. But foreign companies which formed joint ventures with state oil firm Saudi Aramco to look for conventional gas, including Lukoil, Royal Dutch Shell and Sinopec, have failed to find commercially viable deposits beneath the sea of sand dunes. So Saudi authorities are now seeking to focus the search on unconventional deposits - very deep, high-temperature reservoirs that would require more complex and expensive technologies to exploit. The assumptions of the initial gas exploration agreements do not exist anymore because in spite of a decade of exploration, no commercial gas discoveries have been made, said Sadad Al-Husseini, a former senior executive at Saudi Aramco. Therefore the exploration program could be redefined as a change to unconventional gas exploration with higher costs and new buy-back terms, said Al-Husseini, who now owns an energy consultancy firm said. Lukoil is still on the hunt for desert gas and is now evaluating the possibility of production from an unconventional deposit. This is tight gas. The negotiations are under way. No details on deal and future production plans yet, said a spokesman for Lukoil Overseas, which operates the groups foreign upstream projects. Yes, we are hopeful and will continue evaluating drilling after signing a deal, he said.
Posted on: Wed, 19 Mar 2014 11:29:51 +0000
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