Saudi Arabia increases rig count amid crude price slump

SAWhile oil prices have dropped below US$50 per barrel, Saudi Arabia is ramping up the number of machines drilling for oil and gas in the country, say industry experts 

According to industry sources and analysts, oil firm Saudi Aramco used a record-high of 210 oil and gas rigs in 2014, up from nearly 150 in 2013, 140 in 2012 and 100 in 2011.

Former Saudi Aramco senior executive Sadad Al Husseini added that the phenomenon surrounding the rise in the Kingdom’s rig count had been evolving over a long period of time.

“You need to drill more wells if you are producing 10mn bpd and maintaining your spare capacity. It is also a natural phenomenon in the oil business that the more you produce, the more you deplete your reserves and the more rapidly your field capacity declines. You need to drill wells more frequently simply to maintain production capacity,” noted Husseini.

In 2008, Saudi Arabia oil minister Ali Al Naimi had said that oil production capacity would rise to 15mn bpd from 12.5mn bpd, but the plan was put on hold after the global financial meltdown saw the price of oil plunge below US$40 per barrel.

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