Report: Saudis look for way to tap more oil
Chevron said to be assisting effort to tap heavy oil now seen as unreachable; could be significant addition to world's tight supplies.
NEW YORK (CNNMoney.com) -- Saudi Arabia is experimenting with new techniques to tap into its supply of heavy crude oil, according to a published report Monday that says the move could help significantly increase the supply of oil to meet growing global demands.
The Wall Street Journal reported that U.S. oil producer Chevron Corp. (Charts) began a field trial using steam injections to pump out heavy oil that was previously considered unrecoverable from Saudi Arabia's Wafra oil field.
The paper said that Chevron and the Saudis say initial results are promising and that the technique could greatly enhance recovery at some huge fields.
Saudi Oil Minister Ali Naimi told the paper the technique could add "tens of billion of barrels" of reserves to the nation's estimated supply of oil.
Heavy oil is more difficult to extract than the light crude which is the most common type of oil traded in world markets. The paper reports that heavy-oil fields sometimes yield as little as 5 percent of their oil with conventional pumping, compared with 35 percent or more in a light-oil deposit.
But the supply of light crude is having difficulty keeping up with increasing demand from countries such as China and India, as well as from industrialized nations.
That tight supply picture has been a key factor lifting oil to record levels recently. Oil hit an record of $75.40 a barrel in intraday trading Wednesday.
Heavy oil also typically contains more contaminants such as metals and sulfur, but the paper reports that Saudi Arabia recently announced plans to build more of the kinds of refineries that can handle heavy crude.
Other Middle East oil producers are also looking at using steam to unlock their previously unreachable heavy oil supplies. The Journal reported that Occidental Petroleum Corp. (Charts) is preparing to spend $2 billion on a large-scale steam-injection project in the Mukhaizna field in Oman, which holds about a billion barrels of oil.
And the paper said that Kuwait is planning a pilot project in its northern heavy-oil fields, likely using steam.
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