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Saudi Oil Project Brings Skepticism to the Surface

Saudi Oil Project Brings Skepticism to the Surface

Marwan Naamani/Agence France-Presse — Getty Images

An Asian worker at the Khurais oil field kept his face covered last week to protect it from dust.

Published: July 1, 2008

KHURAIS OIL FIELD, Saudi Arabia — For mile after mile, there is nothing but flat and unrelenting sand on every side, with a few black camels wandering in the desert glare.

The New York Times

The Saudis say the Khurais oil field holds 27 billion barrels.

Then, suddenly, it rises into view, like some vast industrial mirage. The Khurais oil field’s processing plant resembles nothing so much as an oversize Erector Set, its unlikely vertical tubes and steel scaffolding gleaming in the sun.

But this remote patch of desert could hold the key to the soaring price of gasoline around the world.

Khurais, about 90 miles east of Riyadh, the Saudi capital, is one of the planet’s last giant oil fields. The Saudis say that it holds 27 billion barrels of oil — more oil than all the proven reserves of the United States — and that it will significantly bolster the kingdom’s production capacity once it starts pumping a year from now, easing global need.

Some oil traders and analysts doubt that. Their pessimistic forecasts of dwindling oil supplies have helped propel the current increase in prices, which pushed past $140 a barrel last week and seem to be heading higher.

To help counter the skeptics, the Saudis flew a contingent of journalists from Jidda, on the Red Sea coast, to Khurais last week. The tour was largely a scripted one, with little opportunity to wander the grounds or verify official claims.

Still, one thing is clear: a gargantuan effort is under way here at the heart of the Arabian desert, with some 20,000 helmet-clad laborers working long shifts in 110-degree heat. What was an empty expanse of rust-colored sand just over two years ago is now a town-size industrial plant. Its basic structures appear to be complete already, including stadium-size storage tanks and a mile-long pipe rack that is four stories tall.

“We are sometimes criticized for not being more forthcoming about our oil,” said Amin Nasser, senior vice president for production and exploration at Aramco, the national oil company, during a slide show presentation in a staff compound here. “But our actions have been louder than our words, despite all the criticism and the cynics.”

The Saudis have long been a force for moderation in the Organization of the Petroleum Exporting Countries, arguing that soaring prices simply promote conservation and fuel-switching strategies that could ultimately hurt oil producers the most. As the former Saudi oil minister, Sheik Ahmed Zaki Yamani, likes to say, the Stone Age did not end because we ran out of stones.

So they have used their dominant position in OPEC to act as the “swing” producer, raising and lowering production as needed to keep prices steady and to ensure that the oil age continues. But lately, their power has been threatened by surging world demand that has eliminated most of the gap between supply and demand. The Khurais field, they hope, will help restore that margin.

Mr. Nasser and other Aramco officials described a project whose dimensions boggle the mind. Starting in June 2009, the field will produce 1.2 million barrels a day, enough to satisfy the expected growth in global demand next year. The Saudis say they are investing more than $10 billion, with 26 contractors, 106 subcontractors and 28,000 employees. It is the largest piece of a five-year, $60 billion effort to expand oil production capacity at a time of fast-rising demand.

A company tour of the main processing zone had a surreal, theatrical air. As the journalists stared out through the windows of their air-conditioned bus, hundreds of south Asian workers stopped work to stare back, their sun-protection masks and dark glasses making them look like Hollywood extraterrestrials. It was impossible to know if the site had been prepared for the journalists’ tour.

Beyond the buildings, gas flares blurred the horizon, in a forbidding landscape punctuated only by low reddish dunes and a few scattered shrubs.

The Khurais complex, which includes two smaller adjacent fields, was discovered in 1957. It got only limited use, because its oil is less accessible than that of the great Ghawar field, the world’s largest.

Now the Saudis are deploying an extraordinary engineering effort to bring Khurais’s mile-deep oil to the surface. Seawater will be carried through new pipelines from the Persian Gulf and injected into oil-bearing rock to pressure the oil upward. Usually Aramco pumps seawater into a field only after several years of production, and some skeptics point to this as a reason to doubt that Khurais will live up to its billing. But Mr. Nasser said the huge seawater injection system at Khurais was about cost and logistics, not a sign of a weak field.

Once extracted, the oil will be stored in three 600,000-gallon tanks — each looks as big as the Colosseum — before being transported in pipelines that carry five million barrels a day and run across Saudi Arabia, from the Red Sea to the Persian Gulf.

The elaborate safety precautions to protect the field include fences and crash barriers, government troops and even dogs. Once it is complete, workers at the complex will live in a nearby condominium complex with high-rise buildings, tennis courts and a swimming pool.

During their presentation, Aramco officials acknowledged that they faced unusual challenges here, including a plan of daunting complexity in a tight contractor market. There are also risks: if the current high prices drive down demand, the Saudis could find their market for all this oil shrinking.

But they said they were on schedule or ahead of it, with the pipeline network 88 percent complete and the main processing plant 55 percent done. They also vehemently disputed the claims of oil-supply skeptics.

A variety of new technologies, including multiple lateral wells and microscopic robots swimming through rock pores deep underground, will allow the company to start recovering much more of the oil in its fields, said Mohammed Saggaf, who runs Aramco’s advanced exploration research wing. The company expects to increase the amount of oil it can recover from its fields to 70 percent from 50 percent over the next 20 years, Mr. Saggaf said, adding another 80 billion barrels to reserves.

With all this oil becoming available, the Aramco officials said they were baffled that the market seemed to be behaving as though there were a shortage.

“We’ve asked all the international oil companies that buy from us if they want more oil,” Mr. Nasser said. “But we can’t find customers.” and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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