Chevron to Try to Boost Saudi Production

Posted by: Stanley Reed on July 18

In an interesting deal reported in MEES, the newsletter specializing in Middle East energy, Saudi Arabia has renewed Chevron’s concession in the so-called neutral zone between Saudi Arabia and Kuwait. Chevron operates the onshore portion of the Saudi section. This now has a capacity of 280,000 barrels per day.

According to MEES, the Saudis also have given the green light for Chevron to experiment with steamflood technology, an enhanced recovery technique that loosens up heavy oil with injected steam, in the Wafra field. The project could eventually add capacity of 300,000 barrels per day, but major technical challenges remain, and any new oil is several years off.

Still, this development once again appears to indicate the Saudis’ interest in boosting capacity in an ongoing and so far only marginally successful effort to regain influence over runaway oil prices.

Chevron’s deal is noteable as the only arrangement under which an international oil company produces oil in Saudi Arabia—putting the company in an enviable position. Several companies including Royal Dutch Shell are exploring for gas but so far with little success. The international oil companies view enhanced recovery in mature fields as the likely new window into the coveted Saudi upstream—if it ever opens.