Saudi Aramco is heavily involved in developing and deploying upstream technologies which will improve efficiency and reduce costs.

As the largest oil producer, and with 25 per cent of all discovered reserves in the world, Saudi Aramco's operations span all crude grades, all reservoir scales and various operational environments, the company's senior vice president Exploration & Producing Abdallah S Al Saif told an industry gathering earlier this year in Bahrain.

Both oil and gas production will be expanded as required to meet future demands and to enhance the Kingdom's strategic position, said Saif. Some of this demand will be met by the Kingdom rapidly expanding its non-associated gas production capacity.

In order to expand production, Saudi Aramco has set very challenging objectives, which include: adding three to five trillion cu ft of new non-associated gas discoveries every year to meet future demand;

replacing annual oil production (± 3.0 billion barrels); maintain a reliable production capacity, while maximising ultimate recovery and minimising development costs.

To accomplish these objectives, technology has to be developed and deployed effectively.

For the unique challenges facing Saudi Aramco, such as simulating giant reservoirs or those related to multiples in land seismic, Saudi Aramco is pursuing a core of critical initiatives, said Saif.

''In addition to our in-house initiatives many others are done jointly with academia, service or operating companies through JIPs and consortia. Saudi Aramco participates in 35 JIPs,'' he explained.

''As technology is developed, deployment becomes very critical in all sectors of our business,'' he added.

Technology has been playing a key role in data acquisition, seismic, logging and testing, the IT industry making great advances in computing technology to support the oil and gas industry in converting static data into shared knowledge.

As data is acquired, analysed and processed by computers, integration technology is essential. After data is integrated, Reservoir Modeling technologies are then used to model, simulate and optimise field developments, said Saif.

Data acquisition: Saudi Aramco has acquired a vast volume of data over the years, including 750,000 ft of core cut 500,000 log runs.

''Data is invaluable,'' said Saif. ''There is a time value of data just like the time value of money. Saudi Aramco is very conscious of that,'' he added.

In 2000 and last year, Saudi Aramco witnessed an expansion in the volume of 3D seismic shot for both exploration and development.

3D seismic is being used to mature the company's deep gas exploration prospects and to better place its development wells. But in order to store and process large volumes of seismic data, computing technology has to be up to speed.

Fortunately, processing power has increased by a staggering 67,000-fold, especially over the last two years. Storing capacity has also been increased 2,500-fold to match the increases in 3D utilisation.

Thus, technology has played a major role in bringing down the processing cost over the last five years with increasing computer processing power.

Computer experts have also invented new sorting algorithms which have reduced the sorting time from two months to three days. Other processing and interpretation softwares have been patented and effectively utilised.

After data is acquired, processed and interpreted, the process of integration takes over. Integration of seismic, geological and engineering data is facilitated through several visualisation centres using state-of-the-art geological modelling technologies. The output is multi-million cells models representative of Saudi Arabia's reservoirs properties.

These multimillion cells models used to be upscaled, and only windows or sectors can be simulated using conventional simulators. In the early 1990s, Saudi Aramco started to develop a massively parallel three-phase reservoir simulator (POWERS) which is capable of simulating the entire reservoir of million cells in a relatively short turnaround (only a few hours).

''Not only did it improve the accuracy, but it also speeded up the process of history matching and thus improved the accuracy of field development studies. This leads to properly locating the wells and thus increasing the ultimate recovery,'' Saif said.

All of Saudi Aramco's technology initiatives for exploration, development and reservoir management are pursued in a state-of-the-art centre which allows better integration and an efficient disseminator.

Shaybah

Shaybah is a giant field with Extra Light crude. Located in the inhospitable Rub' Al Khali (Empty Quarter), the field was discovered in 1968 with a huge gas cap overlying an oil rim underlain by water.

Prior to 1995, the field had always ranked low in Saudi Aramco's development portfolio, using the technology at the time.

For example, approximately 300 vertical wells would have been needed, some of which would have been landing on extra-high sand dunes. The ultimate recovery would have been in the low 40 per cent due to coning and other factors.

With technologies such as 3D seismic and horizontal wells, development at Shaybah became attractive. The number of horizontal wells required is low (106) and their productivity is high. The ultimate recovery will be in the upper 60 per cent.

The sand dunes at Shaybah are large, the terrain extremely rough. A technical study was conducted jointly with King Fahd University of Petroleum and Minerals (KFUPM) to ensure that the movement of the sand would not interfere with the operation.

The subsurface multidisciplinary team was active in integrating seismic, geological and engineering data in order to shape the development plan of the field. A multimillion cells model is simulated in POWERS.

The plan called for drilling 106 horizontal wells, 1 km each, with 17 vertical wells, one well in each sabkha, followed by four to five horizontal wells.

Gas produced is injected in five gas cap wells.

Water produced is disposed of in two wells drilled below the oil-water contact.

The plan was very successful. Development drilling was completed in two years, and the field came onstream in July 1998 at 500,000 barrels per day (bpd).

The technology of real-time geosteering was successfully implemented in Shaybah to surgically locate horizontal wells at the proper depth in the target facies. The drilling attributes are instantly transmitted via satellite transmission facilities on the rig, to the centre in Dhahran. Expert geoscientists and engineers visualise these data at their desktop or in visualisation centres to properly adjust the trajectory or completion interval, thus saving time and money.

At Shaybah, the unit cost in bpd has come down significantly with time in line with progress in horizontal well technologies. Drilling efficiency has also been enhanced - a 1km horizontal well which was drilled in 40 days in 1997 was drilled in less than 20 days in 1999.

Haradh

Located in South Ghawar field, Haradh Area 1 was developed in 1996 to produce 300,000 bpd. Haradh Area 2 is now being developed to produce another 300,000 bpd to come on-stream next year.

Area 2 is significantly poorer where PI is 14 compared to a PI of 23 in Area 1. Area 2 is also shorter and wider, making it more difficult to support the pressure via peripheral water injection.

A Subsurface Team integrated a study from the outcrop where it is possible to see fractures and high permeability layers, along with seismic, geological and engineering data into a very accurate model.

This model was then used to plan the development using carefully located horizontal wells which avoid fractures.

''Significant gains were realised through drilling efficiencies. Also, higher productivity was achieved through horizontal completion,'' said Saif.

''Our forecast is that poor-quality Area 2 development with the application of new technology will cost only 60 per cent of the conventional method,'' he said.

Hawiyah

A gas plant came onstream at Hawiyah last year with a capacity of 1.6 billion cu ft per day.

The gas reservoirs are the Khuff carbonate at 10,000 ft and pre-Khuff sand at 13,000 ft.

The challenges in the development of these reservoirs included: