Saudi Arabia will begin deep-water drilling in the Red Sea by the end of the year and is expected to announce the results of current projects sometime next year, according to an interview with Khalid al Falih, president and CEO of Saudi Aramco, the world's largest oil company.
In a report published Wednesday in Al Riyadh newspaper, Al Falih said without offering specifics that Aramco's oil and gas research and exploration budget is the highest in the company's history. Company officials have said in the past they are doubling the number of researchers worldwide, including establishing a research center in Houston where the company already has a strong presence.
The CEO also said the company is focused on the relatively unexplored north and northwestern regions where he says wells have been discovered and that production output estimates would be "announced in due course," according to the newspaper report.
Most of the country's oil production is onshore, but in recent years the country has been exploring ways to boost output. Offshore drilling is a relatively new phenomenon for the country, which has massive reserves beneath its eastern sands.
In 2000 Saudi Aramco operated one offshore oil rig; by 2009 it had 19 in operation and two in the works, according to the U.S.-Saudi Arabia Business Council, citing Saudi ministry figures. The country has vast proven offshore oil and gas reserves, such as its northeastern Safaniya field just off the coast near the border with Kuwait.
In 2009 the country began a 15-month seismic study in the Red Sea where Saudi Aramco believes there are significant reserves of natural gas.
China's seismic-exploration company BGP, Inc. was involved in some of the large-scale surveys in and along the Red Sea coastline.
Earlier this year Amin Nasser, senior vice president for upsteream at Saudi Aramco, said at a conference in Houston in March the company is "optimistic about the potential for significant discoveries" in offshore exploration, including in the Red Sea.
Egypt currently leads the Red Sea region in oil extraction with at least 14 offshore rigs.