The Ministry of Energy, Industry and Mineral Resources of Saudi Arabia has announced an upward revision to the Kingdom's proven oil and gas reserves, following an independent certification of oil and gas reserves in Saudi Aramco's concession area conducted by leading consultants DeGolyer and MacNaughton (D&M).
The Kingdom previously announced that oil and gas reserves as of 31 December 2017 were 266.3 billion barrels of oil and 307.9 trillion standard cubic feet of gas respectively. Of these, the estimated proven oil and gas reserves in Saudi Aramco's concession area were 260.9 billion barrels of oil and 302.3 trillion standard cubic feet of gas. Following the certification, Saudi Aramco's concession area oil reserves at year-end 2017 would have been 2.2 billion barrels higher or 263.1 billion barrels of oil and 319.5 trillion standard cubic feet of gas.
In addition to Saudi Aramco concession area reserves, the Kingdom also owns half of the oil reserves in the Partitioned Zone jointly owned by Saudi Arabia and the State of Kuwait. The Kingdom's share of the Partitioned Zone oil reserves (onshore and offshore combined) is 5.4 billion barrels and the corresponding gas reserves is 5.6 TCF.
So, including the D&M revision of oil reserves in the Saudi Aramco's concession area, the Kingdom's total proven oil and gas reserves as of year-end 2017 would have been about 268.5 billion barrels of oil and 325.1 trillion standard cubic feet of gas, respectively.
The Minister of Energy, Industry, and Mineral Resources, His Excellency Khalid Al-Falih, noted that this also highlighted three other important realities:
- That these vast reserves are also among the lowest cost in the world, backed by world-leading economies of scale.
- That the carbon intensity of Saudi Arabia’s oil and corresponding gas flaring are among the very lowest in the world, and he called on the industry to use this metric alongside profitability.
- And that it was a tribute to the importance the Kingdom places on integrity, the discipline and world-leading excellence of Saudi Aramco's operations and employees.
'This certification underscores why every barrel we produce is the most profitable in the world, and why we believe Saudi Aramco is the world’s most valuable company and indeed the world's most important,' His Excellency said.
Background:
The results of the D&M's evaluation have conclusively proved the integrity, robustness, and accuracy of the Kingdom's – and in particular Saudi Aramco's - internally-conducted estimates of its hydrocarbon reserves.
The Kingdom's previous evaluations of its hydrocarbon reserves as of the end of 2017, including Saudi Arabia's share of the Partitioned Zone (PZ), were around 266.3 billion barrels of oil (Saudi Aramco 260.9 billion barrels and 5.4 billion barrels in the PZ), and around 307.9 trillion standard cubic feet of natural gas.
It is common industry practice to focus the reserves audit on the major reservoirs in a company's portfolio. Accordingly, D&M evaluated 54 major oil reservoirs operated by Saudi Aramco, out of 368 in Saudi Aramco’s portfolio. These 54 reservoirs alone make up approx. 80% of the Saudi Aramco's reserves in the concession area 260.9 billion barrels oil reserves estimate. D&M's certification confirms that, as of December 31, 2017, these 54 reservoirs contained 213.1 billion barrels of proved oil reserves – conventionally known as '1P' – assessed on a full reserve life basis. This compares to a figure of 210.9 billion barrels of oil for the same reservoirs as estimated internally by Saudi Aramco. D&M's oil reserves certification being 1.0% higher (+2.2 billion barrels) than Saudi Aramco's.
In terms of gas certification, the Ministry noted that D&M evaluated gas reserves in 77 major reservoirs operated by Saudi Aramco, that alone make up approximately 60% of the Kingdom's 302.3 trillion standard cubic feet (tscf) gas reserves estimate. D&M's certification confirms that, as of December 31, 2017, these 77 reservoirs contained 204.9 tscf of proven gas. This certification is 9.2% higher (+ 17.2 tscf) than Saudi Aramco's internal estimate for the same reservoirs, which proves that the Kingdom adopts highly cautious methods in evaluating its oil and gas reserves.
As indicated above, D&M’s evaluation was limited to 'booked' oil and gas resources in the Saudi Aramco's concession area and does not cover other available hydrocarbon resources in the Kingdom, such as the significant unconventional gas reserves recently discovered but not yet 'booked' by Saudi Aramco or the Kingdom. Nor did the D&M cover the Kingdom's share of the reserves in the Saudi–Kuwaiti Partitioned Zone, which has both an onshore and offshore component. The onshore part is estimated by Saudi Arabian Chevron at 2,923 million barrels, while its share of gas reserves in that area is estimated at 877 billion standard cubic feet. In addition, the Kingdom’s share of oil reserves in the Offshore Partitioned Zone is estimated by Aramco Gulf Operations Company at 2,476 million barrels, while its share of gas reserves in the same area is estimated at 4,749 billion standard cubic feet. So, the Kingdom’s share of the total oil and gas reserves in the Partitioned Zone, onshore and offshore combined, is roughly 5.4 billion barrels and 5.6 trillion cubic feet of gas.
This independent evaluation further underscores the Kingdom's strong position and reputation for reliable oil production and supply. It also represents a strong validation of both the robustness and accuracy of Saudi Aramco's internal estimation techniques and processes, and provides in-depth insight into the unique size of the oil and gas reserves in Saudi Arabia.
'This independent third-party certification is in line with the Kingdom's Vision 2030, which promotes transparency, accuracy, and quality of all kinds of critical data. This reflects the continued direction and support provided to the Saudi petroleum industry by the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud; and HRH Crown Prince Mohammad bin Salman bin Abdulaziz,' His Excellency said.
