Saudi Arabia, the world's largest crude oil exporter, will begin exploratory drilling for shale gas sometime this year, said Oil Minister Ali Al-Naimi on Monday, with some estimates placing the kingdom’s shale gas reserves at more than double its conventional gas reserves.
According to Bloomberg, Saudi Arabian Oil Co., or Saudi Aramco, will be searching for shale gas in the northwest of the country, while other unconventional resources, such as sour gas, may be found in the oil-rich eastern region and the Empty Quarter deserts.
Al-Naimi, who was speaking at the Credit Suisse Asian Investment conference in Hong Kong, added that the nation may hold as much as 645 trillion cubic feet (tcf) of technically recoverable shale gas, putting it firmly in the fifth spot of the world’s largest shale deposits behind China, the U.S., Argentina and Mexico.
In separate comments to The Wall Street Journal, Mr. al-Naimi added that the country's shale-oil reserves could also be exploited, though "we have to find them."
The kingdom presently has about 282.6 trillion cubic feet of proven conventional gas reserves, according to Aramco’s 2011 annual report. If the shale gas reserves are proven to be retrievable, Saudi Arabia plans to develop its natural gas resources to meet rising domestic energy demand.
Sadad al-Husseini, a former executive vice president for production at Aramco, however believes that a lack of present infrastructure may present a challenge for shale.
“It would take at least five to six years to start seeing the development of shale gas on a commercial scale,” he said, in an interview with Bloomberg. “The deposits are in remote areas far from contractor centres, and mobilizing the required manpower and equipment will take time.”
On Monday, al-Naimi further highlighted that the kingdom may discontinue its decades-long policy of maintaining an oil-output cushion for use in global supply disruptions, if shale reserves around the world proved promising.
"It is not a question whether Saudi Arabia has spare [oil] capacity. It is a question of whether we need to spend billions maintaining it at all…new commercial reserves such as shale oil are good news for the global economy and will ensure even greater stability of markets and prices," he said.