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Breaking News:

OPEC Lifts Production in February

Aramco Is Using Advanced Tech To Search For New Oil Reserves

Saudi Aramco is deploying advanced seismic testing technology to explore again areas of the desert known as the Empty Quarter, a move that could help it to raise its proved oil and gas reserves ahead of the planned listing of 5 percent in the company next year, expected to be the world’s biggest IPO ever.

Aramco’s crew is exploring an area spanning 15,400 square kilometers (5,946 square miles) around Turayqa—an onshore conventional gas field discovered in 2013, which contains no oil. Part of that desert area has been explored before by Aramco joint ventures with foreign firms, but previous exploration efforts did not find recoverable volumes of oil or gas.

“Data processing is ongoing. The area partially covers areas relinquished by some of the joint ventures,” Aramco told Reuters.

According to the feature on Aramco’s website, technology has made giant leaps in recent years and “Data that would have previously taken 15 to 20 years to collate can now be consolidated in two to three years.”

According to industry and technology experts briefed by Reuters, the advanced seismic technology may boost the chances of successful exploration missions, but in order to prove reserves, drilling still will be necessary.

It is yet unclear if those state-of-the-art technologies will change Aramco’s crude oil and condensate reserves, which Saudi Arabia has been reporting at around 260 billion barrels for decades.

In Saudi Aramco’s 2016 annual review published last month, crude oil and condensate reserves are placed at 260.8 billion barrels, slightly down from 261.1 billion barrels in 2015.

Related: Texas Shale Hit Hard By Hurricane Harvey

Now Saudi Aramco must open its books for auditing ahead of the initial public offering, and any significant change in oil reserves will greatly impact the company’s valuation for the IPO. Saudi officials claim the company is worth around US$2 trillion.

Earlier this year, most fund managers were evaluating Aramco at below US$1.5 trillion. That was just before Saudi Arabia cut the tax rate on Aramco to 50 percent from 85 percent, which caused some analysts, including Rystad Energy, to raise their valuation of the Saudi company’s upstream portfolio.

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By Tsvetana Paraskova for Oilprice.com

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