Pumping Oil From The Saudi Desert: Housing and other infrastructure for workers at Saudi Arabia's Shaybah oil production facility, cut through the sand dunes in the Empty Quarter.
SHAYBAH, Saudi Arabia, Nov. 15 (UPI) -- If you're counting heads, Saudi Arabia's Empty Quarter is aptly titled. But barrel for barrel, there's more oil below the red sand dunes of Shaybah than in all of Mexico or Canada -- the two biggest oil suppliers to the United States -- or each of the four smallest members of OPEC.
Home to the largest oil reserves on Earth, Saudi Arabia is upgrading the Shaybah oil production facility in the country's barren southeastern Rub' al Khali desert, part of an agenda to bolster its already dominant role supplying more oil to the world than any other country.
The kingdom's production of 8.8 million barrels per day is around 2 million less than its capacity, according to the Energy Information Administration, the U.S. Energy Department's data arm, giving it room to move and nearly control the market. Its goal to increase production capacity by another 1.5 million bpd by 2009, to 12.5 million bpd, will add to the political and economic weight of its throne.
"Because of their swing producing capacity, this has made them a leader and OPEC's most influential member, in that sense," Samuel Ciszuk, Middle East energy analyst for Global Insight, said in a telephone interview.
"They can put it on stream or take it off and everybody knows that," he added. "No one else has really been able to do it."
Nothing sits atop Shaybah's sand dunes except for the facilities' 700 workers and the required oil production and living facilities. The nearest city is 342 miles away.
But below the barren sand are 19 billion of Saudi Arabia's 264 billion barrels of proven reserves and 30 trillion cubic feet of natural gas. Shaybah currently produces at least 500,000 barrels per day of high-quality crude from "one of the most remote and isolated areas in the whole world," Faleh al-Subaiei, a 2002 chemical engineering graduate of Vanderbilt University now working for Saudi Aramco, said over the loudspeaker on one of three buses carrying reporters on a rare tour of the facility.
The super giant field was first discovered in 1968, but without the horizontal drilling techniques known now it wasn't economically feasible to develop. That began in 1996, and oil flowed two years later.
By the end of 2008 Shaybah will be able to handle another quarter-million bpd, according to the company. An initial goal of 1 million bpd was scaled back but is still "being evaluated," another Aramco official told reporters later.
About 83 million barrels of petroleum and other liquids are consumed each day around the world, according to the EIA, which predicts consumption growing by 35 million bpd by 2030.
The Organization of Petroleum Exporting Countries, which controls nearly 80 percent of the world's total reserves, provides nearly 40 percent of what's consumed today. The EIA predicts it will increase to 45 percent by 2030.
Its largest reserve holder and producer will likely continue its part.
"It is in the role it has always been in, which is the country is looked upon for spare capacity and to meet the demands no one else can do," said Joseph Stanislaw, independent senior adviser to Deloitte & Touche, in a telephone interview.
"They're making huge capital investments to increase capacity," Stanislaw said. Saudi Arabia is investing $90 billion, OPEC $120 billion, in coming years to expand its oil sectors.
But oil prices steadily hovering above $90 per barrel means the bulls-eye is on OPEC and its leader.
The U.S. Congress recently has looked seriously at "NOPEC" legislation that would allow the government to sue OPEC for price manipulation. Energy Secretary Samuel Bodman this week called on OPEC to respond to the prices by boosting production.
OPEC says it's not supply, but runaway speculators on real and perceived geopolitical threats, bottlenecks on the U.S. side of the oil stream and the devaluing U.S. dollar that is propping up prices.
Saudi Arabia said this week at the third ever OPEC Summit -- held in Riyadh -- it has no immediate plans to boost capacity beyond 12.5 million bpd.
"Tell me of any other country," Saudi Prince Abdulaziz bin Salman said at a news conference at the Summit, "that has made these commitments of this volume."
Salman's terse defense was matched by Saudi Arabia's offense: an unprecedented look into a main vein of a crude bloodline of a government so closely held it wouldn't name the price tag for the Shaybah expansion.
Saudi Aramco chartered the hourlong flight southeast to Shaybah, where reporters were met by the facility's manager and top engineers with handshakes and smiles on a jet-capable runway that was cut through massive sand dunes.
From the perch outside a reception hall dubbed the "oasis," up the side of a dune, Shaybah proper appears as a miniature oil-fueled mirage city.
At night, as the cool breeze runs through one of the world's largest deserts, lights from Shaybah's oil production complex glow below the star-stocked sky while two flames torch the wasted natural gas. At least a half million barrels of Arabian Extra Light crude, separated from the gas and water it mixed with below the sand, begins its 398-mile pipeline trek to a 60-year-old processing facility in Abqaiq.
"It feels good," said Shaybah manager Ali al-Ajmi when asked of the importance of the additional 250,000 bpd to Saudi oil growth, "but also it feels very ordinary."
"Yes, the company is expanding in many directions," both inside and outside Saudi Arabia, Ajmi said. "It's just part of my job."
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