In the early days of the petroleum industry, when the distinguishing mark of an oil field was a forest of wooden drilling derricks, it was common practice to drill wells very close together and to produce each well at the highest possible rate. The effect of these practices on the recovery of oil from the reservoir was not considered. Actually, so little was known of the physical factors involved in the production of oil from the reservoir that it was not realized at the time that these practices had a deleterious effect on recovery.
As the cost of finding and producing oil increased, more and more thought was given to the millions of barrels that had been left behind in the pioneer oil fields. And as additional knowledge was gained of oil recovery mechanisms, elaborate conservation techniques were developed to give the oil industry a second chance at these remaining reserves. Changes were also made in oil field development and production practices to correct the depleting effects of earlier methods.
Today, conservation is a normal part of good day-to-day oil field procedures. It is the close working partner of oil exploration. The exploration men search out the places where new oil fields are likely to be found. Oil-recovery research and engineering hunts for and applies new ways, within economic limits, to extract every last drop of oil from known fields. Conservation has become a habit of thought in petroleum engineering; it influences every phase of crude oil and natural gas production. It has had the effect of "discovering" new oil supplies by adding billions of barrels to world reserves.
Conservation utilizes multi-million-dollar procedures to guard precious oil reservoirs. It now enters the picture as soon as a field is discovered and delineated. It is part of the planning that leads to efficient and orderly oil field development. As a result, the first-class oil field practices of a modern oil company aim to insure the maximum ultimate economic recovery of the oil in a reservoir.
The vast oil fields of Saudi Arabia afford an unusual opportunity to study the techniques and results of modern conservation. These fields have for die most part been developed during the past 20 years. This has been a time, of course, when progress in all technology has been extraordinary. During these two decades more than four billion barrels of oil have flowed from Saudi Arabian reservoirs. Yet the nation now has more than 45 billion barrels of proved crude oil reserves available for the future. Diligent exploration has led to the discovery of these reserves; their magnitude has been determined by scientific drilling programs that delineate the extent of each Saudi Arabian field. Conservation techniques are being developed, and in many areas have already been applied, to assure maximum economic recovery.
The Saudi Arabian oil fields are rather special in many respects. For instance, die petroleum engineers of the Arabian American Oil Company have been able to develop each reservoir in the Saudi Arabian concession with the assurance that other wells elsewhere in the field also were being drilled by their colleagues according to first-rate practices. In other words, Aramco engineers have been able to develop the Saudi Arabian oil fields in terms of ideal practices—ideal for both economic production and long-range conservation. They have been able to locate wells where the subsurface structure of the oil formations indicated that the wells ought to go. There is a "custom-built" quality in the way the wells are deployed in the Arabian oil fields.
The majority of advanced techniques for efficient oil production and conservation have been developed in the United States. However, because of the divided ownership of oil and mineral rights that exists in the United States, an oil company rarely finds itself in the position of having obtained all the mineral leases for a given field. As a result, it is necessary for an American company not only to drill wells to adequately produce its own leases in American fields, but it must also drill extra wells to protect its portion of the reserves from drainage by a neighboring competitor.
The East Texas Field, the largest in proven reserves in the United States, is roughly equivalent in surface area and proved reserves to the Abqaiq Field in Saudi Arabia. Approximately 30,000 oil wells have been drilled to date in the East Texas Field, while only 72 wells have been drilled in the Abqaiq Field. The prime difference in operations in the two fields is that well potential has been maintained in Abqaiq through pressure maintenance, while very substantial money has been spent in East Texas on drilling for the same purpose. Even though relatively few wells have been drilled in Abqaiq, high oil recovery is expected.
In Saudi Arabia large quantities of gas are produced along with the crude oil. Varying volumes of such oil well gas occur in all producing fields of the world. The gas comes to the surface mixed with the oil and has to be separated. In the United States, a tremendous market for natural gas has been developed and thousands of miles of pipeline serve consumers from coast to coast. However, American oil men are still faced with the problem of what to do with the uneconomical excess that is produced through oil wells and gas wells. Every economic avenue of utilization and storage is continuously explored. Still, it is necessary for producers to burn off some of the excess oil well gas so that efficient production can proceed. For example, about 17 per cent of the gas produced in Texas is "flared" because there is no present economic utilization for it. As the economics of gas consumption change (new uses, new pipelines, new storage techniques, and so on), this normal practice of gas flaring decreases.
In contrast to the United States, Saudi Arabia has only the beginnings of a gas market. Despite this lack of consumer base, the country has one of the highest gas utilization rates in the free world, outside the United States. Aramco engineers have in recent years been able to make unusual progress in the economic utilization of Arabia's oil well gas. The company spent about 70 million dollars on research and on substantial capital projects leading to the utilization of oil well gas. At present more than 50 per cent of this gas is put to use. In consequence, Saudi Arabia is the leader among the major oil producing countries of the Middle East in natural gas utilization.
Saudi Arabian gas plays a double role in Aramco's conservation projects. Most of it is returned to the underground oil reservoir. There it is stored for future use. But it does not lie idle. It helps maintain reservoir pressure and thus contributes to maximum recovery. Several different gas injection systems are used. In one system, liquefied petroleum gas is mixed with normal injection gas and the resultant mixture is injected into the reservoir. Once in the reservoir, this mixture functions much like a detergent separating stubborn dirt from the fibres of clothing. It strips the thin film of oil that clings tenaciously to reservoir surfaces and sweeps it toward the producing wells. (The "surface" area in an oil reservoir defies imagination: there can be as much as 16,000 square feet of surface in one cubic foot of the porous rock that is known as oil sand.)
Unfortunately, the injection of surplus gas into an oil reservoir is not always practical. The injection of gas into some reservoirs, because of properties of both the reservoir and the crude oil, will have a deleterious effect on the recovery of oil.
Sometimes oil wells produce gas over and above the gas that comes from the ground in solution in the oil. In cases such as this, Aramco's conservation procedure requires that the well be shut-in and re-completed. The natural gas economy of the United States has a shut-in feature that, for reasons that will presently be clear, cannot be applied to Saudi Arabia. A large percentage of America's natural gas is produced from dry gas wells (wells that produce no oil, only gas). If the natural gas market runs into a slump, such as might come from an unusually warm winter in the northern consuming areas, the gas wells can be temporarily shut-in and the gas saved until the market revives. However, oil well gas goes right on being produced with routine crude oil production—it cannot be shut-in without stopping oil production. The evolving natural gas economy of Saudi Arabia (so far based almost entirely on Aramco conservation techniques and fuel needs) deals almost exclusively with oil well gas. The country cannot therefore apply the shut-in feature of the United States natural gas economy without halting oil production and stopping its principal source of income.
So far Aramco has been the major consumer of gas in Saudi Arabia. However, the company, in keeping with its traditional policy of stimulating the growth of domestic economy, has undertaken a number of projects leading toward an increased and more diversified "market."
About nine years ago, an American engineering firm was retained to prepare a major study on uses to which Arabian natural gas could be put. Over two years ago, a special brochure was published describing Arabia's natural gas resources. Several thousand of the brochures were distributed to banks, newspapers, business associations and government offices in many countries. More recently, a German firm was retained by Aramco to make a more up-to-date study of the utilization of Arabian gas. This survey contained a number of economic studies of the products that can be manufactured from the gas.
Recent developments in the technology of transporting refrigerated liquefied petroleum gas by ship have led the company to invest eight million dollars in the world's first facility to process and handle such gas for delivery to tankers equipped to receive it. The successful transportation of liquefied gas from Lake Charles, Louisiana to England, a significant pioneer triumph, has led petroleum industry experts to predict a lively world-wide growth in the manufacture and sale of liquefied petroleum gases. It is possible that in the future Saudi Arabia may speak of the flaring of excess uneconomic oil well gas in the past tense. In the past decade a modest but steadily increasing business in liquefied petroleum gas has grown up within the country. Saudi Arabian businessmen have started distribution companies that are now selling more than 45,000 barrels of LPG a year. Sales in 1950 totaled only 88 barrels.
Saudi Arabia never had to go through the boom-town days of oil field expansion that saw oil towns grow overnight. But it has benefited from the conservation technology that grew out of the excesses of the early oil field practices in the United States. Saudi Arabia stands as one of the world leaders in the application of advanced conservation practices. However, Aramco recognizes that even further advances can be made. Aramco oil field procedures are an outstanding example of built-in conservation. Each field has been developed with scientific precision to insure maximum economic recovery of oil currently obtainable. Over 50 per cent of the nation's oil well gas is now being put to use and the company is actively promoting extensive future consumption.
Frugality through technology and economic development—such might be the slogan for conservation methods in Saudi Arabia. And, as Erasmus wrote, "Frugality is a hand some income."