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We are confronting another huge challenge and, like climate change, it has been encroaching for years. In concert with global warming, and in an unholy alliance, comes the decline of oil and gas.

For thousands of years slaves and cheap labour supported civilisation but, following the Industrial Revolution, humanity began to thrive on stored solar energy contained in coal, oil and gas. Used for transport, heat and cold, and materials too, notably concrete, metals, plastics and fertilisers, fossil fuels have increased human capacity a hundred fold and our standard of living, indeed our capacity to stay alive, now depends on them as we burn through 16 billion of tonnes a year, releasing double that weight of carbon dioxide into the atmosphere in the process.  But, although huge volumes remain in the ground the easy pickings are long gone. The new stuff is deeper in the earth, deeper under water, and in remoter, more formidable environments.

Still, this is not the whole story. This is not where the real challenge lies.

Over the last 50 years, as demand for oil and gas soared and supply routes multiplied, ever more sophisticated equipment was required for extraction, processing and transport all of which needed energy, and lots of it. As a consequence the Energy Return on Investment (EROI); the ratio of the amount of energy delivered from a resource to the amount used to obtain that resource, has fallen precipitously and is still falling.

The EROI, this is the challenge.

Of course there is no doubt, at least for most of us, that burning fossil fuels damages our environment. We face an existential threat to the world’s current climate balance on which 8 billion people relies.  So, while the net energy content from fossil fuels dwindles, we must find new cleaner sources which also require substantial amounts of energy to exploit and other things too such as uranium, graphite and rare metals, for magnets, batteries, and electronics.

Less net energy, scarce materials, resource nationalisation, high costs and inflation. It is a recipe for human hardship and, of course, resource wars. And what are we doing to counteract this perfect storm? In regards to EROI, not much at all.

The energy and transport industries are developing alternatives, experimenting with carbon capture and converting to electrified transport. But some organisations are making things worse, attempting to ‘stop oil’ and damage economies in countries most active in mitigating the problems. A reduction in the financial strength of commercial organisations and governments reduces their capacity to pay for new technology and infrastructure and other strategies to mitigate the effect of a changing climate.

 We should all feel free to persuade (or force) humans to use less energy for leisure activities but careless attempts to cut essential supplies through bans and boycotts can kill people more quickly and efficiently than climate change ever could.  Make no mistake ‘clean’ energy supplies are still insufficient to meet our needs. Only by retaining fossil fuels in controlled decline while expanding renewable and mitigation strategies can human death and destruction be, perhaps, avoided.

Falling EROI is happening. Climate change is happening. But surely we should also work to provide sufficient energy for all our 8 billion people. Like it or not, fossil fuels remain fundamental to the existence of our crowded human world.

2023

Nov 2023: Saudi Aramco discovered 2 gas fields in the Empty Quarter. The Al-Hiran-1 well flowed gas/condensate from the Hanifa and Al-Arab C reservoirs .The Al-Mahakik-2 well also flowed gas. Additional gas and condensates were was also discovered in 5 previously discovered fields (Usaikerak, Shadoun, Mazalij, Al-Wadhihi field and Awtad).

2022

Aug 2022: Saudi Aramco confirmed a phased approach for its US$100 bn-plus Jafurah unconventional onshore gas project which is expected to produce up to 20 bcm of gas a year by 2030.The Jafurah gas plant is likely to come on stream by 2025, the 2nd phase by 2027, and the full field by 2030. Aramco commissioned the Fadhili gas processing plant in 2019.

2021

Nov 2021: Aramco has awarded contracts worth US$10bn for the Jafurah field unconventional development and anticipates over US$68 bn investment over the next 10 years. Production is expected to reach up to 20 bcm a year of sales gas and 630,000 bbls per day of NGLs and condensates by 2030.

2020

Aug 2020: Saudi Aramco has discovered 2 new oil and gas fields in northern regions. The Abraq al-Toloul oil field lies to the SE of Arar and the Hadabat al Hajara gas/condensate field is in the al-Jof region. Aramco is drilling more wells.

Aug 2020: Saudi Aramco will go ahead with its plan to boost output capacity by 1 mm bbls per day to 13 mm despite significant cuts in CAPEX in 2020 and 2021. Its previous guidance was up to US$45 billion which has been reduced to as low as $25 billion subsequent to COVID-19.

Mar 2020: Saudi Aramco plans to raise capacity to 13 mmbpd from 12 mmbpd after OPEC and Russia failed to agree on production cuts.

Feb 2020: Saudi Aramco announced approval of the Jafurah unconventional gas field in the Eastern Province. It is the largest unconventional gas field in the Kingdom with gas resources estimated at over 550 bcm. Production is expected to commence in 2025 and the phased development could produce 22 bcm a year by 2036 plus 550,000 bbls per day of NGLs and condensates.

2019

Sep 2019: Drone attacks have set alight two oil facilities run by Aramco. They targeted Abqaiq, Aramco's largest oil processing plant, and in the Khurais oilfield.The Iran-aligned Houthi group in Yemen said it had deployed 10 drones in the attacks. A loss of significant production for some weeks will inevitably lead to an increased oil price for a period.

Apr 2019: The country is attempting to develop new gas reserves with plans for a big increase in output from unconventional reservoirs at South Ghawar and Jafurah in the eastern region. Plans include a plant to desalinate seawater which can be injected for fracturing. Aramco currently produces nearly 2 bcm a year of unconventional gas in the north.  

Apr 2019: Ghawar, the world’s largest conventional oil field, is able to pump a maximum of 3.8 mm bbls a day, significantly below the 5.8 mm that the EIA cited in 2017. The field has accounted for over half of the cumulative oil production in Saudi Arabia.

Jan 2019: The Ministry of Energy, Industry and Mineral Resources announced a revision to proven reserves following certification by D&M. From 266.3 bn bbls of oil and 8,720 bcm of gas volumes have risen to 268.5 bn bbls of oil and 9,207 bcm of gas including half the reserves in the Partitioned Zone owned with Kuwait (i.e. 5.4 bn bbls and 159 bcm).

2018

Sep 2018: Saudi Aramco awarded a contract for the construction of 2 drilling islands in the Berri Increment Program (BIP). The objective of the BIP is to produce an additional 250,000 bbls of oil per day from the Berri Oil Field to reach 500,000 bbls per day by 2023. The Program includes a new Gas Oil Separation Plant and further gas processing facilities at the Khursaniyah Gas Plant.

Aug 2018: Saudi Arabian Oil Co said its production in 2017 fell to 10.2 mm bbls per day in 2017 (not including NGLs), down from 10.5 in 2016. Total gas production rose to 128 bcm in 2017, up from 124 in 2016. Saudi Arabia led OPEC’s decision to cut oil production in 2017 to shrink global inventories and boost crude prices.

Mar 2018: Saudi Aramco plans to start producing shale gas from the North Arabia basin. Aramco is also drilling for shale gas in South Ghawar and in the Jafurah basin in the east. Pipeline networks are nearby. The country traditionally produced gas as a byproduct of oil but began exploring for non-associated gas in the early 2000s.

2017

No significant news in 2017.

2016

Apr 2016: Saudi Aramco will complete the expansion of its Shaybah oil field near the border with the UAE to 1 mm bbls per day capacity of 42 degree API oil (from 750,000 bbls per day). It also plans to complete the expansion of the Khurais oil field to 1.5 mm bbls per day in 2018.

Mar 2016: Saudi Aramco has started producing natural gas from its Hasbah gas field in the Arabian Gulf. The field will, together with Arabiyah field, produce up to 25 bcm each year of gas through the Wasit Gas Plant. The Hasbah and Arabiyah fields are 150 kms northeast of Jubail Industrial City.

2015

Jul 2015: Saudi Arabia has  raised oil output to the highest level on record. It reported crude oil production of 10.6mm bbls per day in June.

May 2015: Saudi Aramco discovered 8 oil and gas fields in the east of the country in 2014. There were 5 gas fields (Abu Ali, Faras, Amjad, Badi and Faris), 2 two oil fields (Sadawi and Naqa) and 1 oil and gas field (Qadqad). This brings the number of discovered fields in the country to 129.

May 2015: The Wafra onshore oilfield in the Neutral Zone will now be shut for maintenance for 2 weeks to give time to resolve issues at Wafra and Khafji.

Apr 2015: Chevron plans to shut down the Wafra onshore oilfield in the Neutral Zone between Saudi Arabia and Kuwait. The oil output from the offshore Khafji field, also in the Neutral Zone, was halted in 2014 to comply with environmental regulations.

Feb 2015: A heavy lift barge completed the installation of the Hasbah tie-in platform (TP) as part of the ongoing work to complete the Arabiyah-Hasbah Offshore Gas Fields Project in the Arabian Gulf which will produce through the Wasit Gas Plant when completed.

Jan 2015: Saudi Aramco has put on hold its deep water exploration and drilling activities in the Red Sea because of high costs. The company will renegotiate some contracts and postpone some projects. The company will continue investing in key projects such as  spending US$7 bn on unconventional gas.

2014

Nov 2014: The country will attempt to double its natural gas output by 2030, using it all for domestic demand including in power generation and water desalination. The country does not plan to export its gas .

Oct 2014: Oil production from the Khafji oilfield, jointly owned by Saudi Arabia and Kuwait in the Neutral Zone, has been shut down to comply with environmental regulations. The field was producing around 300,000 bbls per day (GS notes: this may be in response to lower oil prices and unilateral price cuts by Saudi Arabia).

Jul 2014: Shell is ending investment in the Kidan gas development in its South Rub al-Khali Co (SRAK) project, partnered  with Saudi Aramco. ENI, Repsol and Total have already abandoned the search for gas deposits in the Empty Quarter. Kidan is rich in sour gas and is near the 750,000 bbls per day Shaybah oilfield but achieving commerciality is a challenge.

2013

Oct 2013: Saudi Aramco, will increase output of light sour crude from the Shaybah and Khurais fields by 550,000 bbls per day in 2017 compensating for a decline in production from the older fields and reducing reliance on heavy crude from the newly developed Manifa field. The expansion, firstly from Shaybah, should be completed by the end of 2017.

Apr 2013: Aramco announced the first phase production start-up at the Manifa field. Production capacity is planned to reach full design capacity of 900,000 bbls per day of Arabian Heavy oil by the end of 2014. The Manifa field includes land rigs linked by causeways and bridges in Manifa Bay. It will supply a new 400,000 bbls per day refinery run by Aramco and Total at Jubail and an Aramco joint venture refinery with Sinopec in Yanbu, on the Red Sea coast.

Mar 2013: Saudi Arabia will begin exploratory drilling for unconventional gas to meet rising domestic demand while maintaining oil exports. However there is no forecast of how quickly Saudi Arabia might achieve commercial production or how it will supply the water used in hydraulic fracturing. Saudi Arabia has not managed to increase gas production enough to replace oil as feedstock in petrochemical and electricity generating projects. Sales gas output from  Aramco averaged around 100 bcm in 2011.

2012

Oct 2012: Saudi Aramco has launched reservoir water injection at the offshore Manifa field in preparation for first-phase production of Arabian heavy crude in 2013. Initial output of up to 500,000 bbls per day will gradually increase to 900,000. Manifa’s oil will supply refineries under construction, comprising Satorp in Jubail, a joint venture with Total, Yasref in Yanbu (with Sinopec) and a future Jazan refinery.

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