Fields and technology add production efficiency for world's premier oil exporter.

The key to maintaining or improving standards of living is sustainable economic growth. The key to sustainable economic growth can be summed up in one word - energy. While oil will be complemented by other fossil fuels and emerging energy sources that will have increasing impact in the future, oil will remain the dominant energy source for years to come.
In short, oil is still the critical energy source, and considering that Saudi Aramco manages a quarter of the world's proven oil reserves and has the potential to add even more, the company will play a pivotal role in meeting world's future oil demands. This vital position comes with unparalleled responsibilities to meet the world's energy requirements.
Energy to the world
For Saudi Aramco to help supply growing oil requirements, it places major emphasis on three key strategies. First, we will expand the oil resource base. Second, we will develop additional production capacity, in a timely manner as it is needed. Third, we will pursue carefully formulated long-term reservoir management strategies. It also goes without saying that Saudi Aramco is committed to incorporating state-of-the-art technologies together with the most qualified professionals in the world. People and technology are critical components in achieving our corporate objectives.
We apply these strategies in an integrated manner to best fulfill our role as one of the foremost suppliers of energy to the world.
Expanding the resource base
Proven, productive oil fields are our first priority. We are committed to maximizing recovery from these already-discovered fields. Reservoir studies, better structural definition, enhanced reservoir characterization, deeper pool tests, delineation drilling and better reservoir management, among other activities, are all applied.
It is important to emphasize that the company maintains a very long-term focus. In fact, while managing fields today, our professionals and managers are considering demands half a century in the future.
Additionally, there are many untouched regions in the Kingdom that hold great prospects for additional resources. In the past, Saudi Aramco has focused its exploration efforts in the eastern and central regions of the Kingdom, leaving more than half of the Kingdom relatively unexplored and holding great prospects for additional resources. These virtually unexplored territories include offshore locations in the Arabian Gulf and the Red Sea as well as the southern and northwestern parts of Saudi Arabia.
The incremental recoverable potential, beyond proven resources, is estimated to be on the order of 200 billion bbl.
Capacity expansion
Currently, Saudi Aramco's sustainable production of crude is 10.5 million b/d. This 10.5 million b/d includes spare production capacity of 1.5 million to 2 million b/d.
Spare capacity is the key to stability in the world oil market. Saudi Arabia has committed to maintaining spare capacity and drawing on it when warranted by market conditions. Even though it is expensive to develop and maintain these extensive cushions, Saudi Arabia has chosen to do so in the interest of preserving market stability and helping to protect world economies during periods of uncertainty.
Therefore, Saudi Aramco is engaged in concurrently meeting expanding oil demands and maintaining the ever-important spare capacity. This is being accomplished through several mega oil projects that have either been completed or are in various stages of development.
In 2004, two crude oil increments in the Abu Safah and Qatif fields were brought onstream with a combined capacity of 800,000 b/d. Looking ahead to 2006, an additional 300,000 b/d of Arabian Light crude will be available from the Haradh field. In 2007, the Khursaniyah field will be able to produce 500,000 b/d of Arabian Light crude. In 2008, an additional 350,000 b/d of lighter crude will be supplied by expanding the Shaybah and Central Arabian fields. Finally, in 2009, a massive increment of 1.2 million b/d of Arabian Light crude is scheduled to be commissioned in the Khurais field.
Added together, these mega projects will provide a production capacity of more than 3 million b/d, part of which will be utilized to offset natural decline and the rest to expand capacity. Other projects have been identified and can be started to meet any new supply requirements. In fact, Saudi Aramco has evaluated a production capacity scenario of 15 million b/d, which can be implemented to meet future market demand.
Long-term reservoir management
Saudi Aramco's confidence in its ability to raise capacity and maintain production at higher rates over the long term is supported by world-class reservoir management practices designed for long-term results. For example, the company's oil fields are gently depleted far below industry average depletion rates to maximize recovery.
The company's reservoir management is based on five important concepts that govern the management, production and depletion of its reservoirs.
First is the optimum recovery of hydrocarbons. We are always looking for new ways to do this economically and with great regard for the environment.
Second is reservoir monitoring. We use the latest surveillance techniques and state-of-the-art technologies to obtain as accurate a picture as possible.
Third is depletion rates that are low by industry standards, a practice that sets the company apart from common practice. This careful approach helps Saudi Aramco optimally manage some of the largest oil fields on the planet and ensure our ability to supply future demands and protect the economic health of the world.
Fourth is the use of advanced diagnostics. This includes intensive computing, modeling and analyses. By using the best systems available, Saudi Aramco professionals have a clearer understanding of reservoir behavior.
Finally, the use of cutting edge technologies is a company standard. The careful application of technologies continually creates improvements in field performance.
These five concepts work together to provide an efficient reservoir management framework that allows for prolonged field life cycles and higher oil recovery. The bottom line is far better long-term energy security for the world.
Making it all work
Saudi Aramco fully understands the critical nature of providing an uninterrupted, high-quality source of energy for decades to come. We have used all the resources at our disposal to ensure our strategic direction supports the requirements of our customers, our shareholder and the environment.
We are confident that we will play an increasingly important role in providing the energy products needed by the 9 billion people who will be living on Earth in just a few decades. An ample supply of energy is the single most important element in ensuring the quality of life does not degrade, and Saudi Aramco is committed to doing whatever it can to provide a better future.

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