Saudi Aramco has no peer in the international oil business. As the biggest producer of crude oil (about 11 million barrels per day), Aramco’s operations dwarf those of any other oil company – and it has only begun tapping its reserves, which contain more than 260 billion barrels. Saleri is Aramco’s head of reservoir management and in that role, he oversees the company’s well optimization projects. He has also been leading Aramco’s push to produce more natural gas. He holds masters and doctorate degrees in chemical engineering from the University of Virginia and is on the advisory board to the petroleum engineering program at the University of Houston. Saleri worked for Chevron for 18 years before joining Aramco in 1992. He spoke to ET’s Michael J. Economides.

ET: Even though Saudi Aramco sits on top of the most imposing petroleum geology in the world, you have been touting technology as an even more important element in the company’s production.

NGS: Technology is transforming the petroleum business and may have already transformed the up-stream part in ways that we have never thought possible before. In fact, I think we are witnessing only a small specimen of what we will see in the not-too-distant future. For starters, we are radically revising our own perceptions of oil recovery. Up until very recently, recovery of 30 to 35 percent of oil-initially-in-place was considered the norm and was widely accepted as quite satisfactory across the industry. Today, our expectations at Saudi Aramco are considerably more ambitious.

ET: Give us an example.

NGS: The Abqaiq field, in production since 1948 – in fact, the oldest field in the Kingdom. It has produced more than 55 percent of the oil-initially-in-place of Arab-D, its principal reservoir, yet is going strong at roughly 400,000 barrels per day, with less than 40 percent water-cut. Now, we are targeting for a 70 percent recovery, with conventional water-flooding. Recoveries of 80 percent will, however, ultimately be possible utilizing enhanced water-flooding and smart technologies.

NGS: The new exciting area is the area of ‘smart technologies.’ Smartness covers a broad spectrum from construction of complex well architectures to intelligent down-hole controls. As a result, we are seeing a renaissance in our old oil-fields such as Abqaiq, where we can raise well productivities from 500 to 1,000 barrels per day to 6,000 or 7,000 barrels per day. Thus, essentially we can re-engineer existing assets or fields and make them significantly more productive – the key to the Abqaiq phenomenon. Yet better are the implications for future developments, both in terms of recovery and performance.

ET: How do you rate Saudi Aramco’s level of competency in the technology spectrum?

NGS: Particularly in the past five years, we have made a significant investment in up-stream technologies and it is paying off. It would be fair to say that we are considered among industry leaders in some areas, such as multi-lateral and complex well architectures with smart completions. For example, the Haradh Increment-3, which just came on-stream at 300,000 barrels per day during the first quarter of this year, is the first field in the world developed exclusively with maximum reservoir contact (MRC/Smart) wells and complete intelligent field (I-Field) features.

Saudi Aramco is also among the leaders in geo-steering, the technology of targeting and drilling wells. We have the capability of placing very complicated wells thousands of feet underground by remote control anywhere in the country from a control centre in Dhahran, with the precision of a few feet and in real-time. This is the norm in all our horizontal drilling today. Applications will accelerate further because of a massive increase in drilling activity in the near future. We now have 90 active drilling rigs, but by year-end we will deploy a total of 125 rigs, all operating in this real-time modality.

ET: And now the question you were expecting. What is your production prediction for Saudi Aramco?

NGS: No predictions, just the plans. Our 2007-2011 business plan will raise our production capacity from its current level of 10.8 million barrels per day to 12 million by year-end 2009. I must add that the company has a strategy of maintaining a spare capacity of 1.5 to 2.0 million barrels per day. Future expansions may follow, all depending on the global market conditions and the company’s strategic imperatives.