Sector News

Saudi Aramco may raise rigs in 2016 if oil prices rise -sources

May 29, 2015
News
(Reuters) – Saudi Aramco may raise the number of its oil and gas drilling rigs to as high as 250 next year if oil prices continue to firm and as domestic demand for gas increases, industry sources said on Thursday.
 
Currently the national energy giant has 212 rigs of both types in operation and that could rise to between 220 and 250 if conditions permit, sources familiar with the plans said. “It all depends on the oil price of course,” said one.
 
Aramco declined to comment.
 
Brent oil is now around $62 a barrel, up from a low of $45 in January though still far from the $100 mark which Saudi officials said they favoured early last year. Saudi Arabia raised its crude production in April to a record high of 10.308 million barrels per day.
 
“They are looking for new rigs to replace the poorly performing rigs, and this will be to maintain potential now that demand is coming back – that is for the oil side,” another source said.
 
“As for the gas side, they need to add more rigs to increase production, and they are looking for deep gas.” Once Aramco starts looking for shale gas in the north, the number will be even higher, he added.
 
As a result of the decline in oil prices, Saudi Aramco managed to make big savings on drilling fees this year after asking for discounts from rig contractors and service companies. (Reporting by Reem Shamseddine; Editing by Andrew Torchia/Jeremy Gaunt)

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