Saudi Arabia is preparing to re-open its oldest oil field for the first time in three decades due to “tight market conditions” brought on over fears of a possible conflict in the Middle East involving Israel, Iran and the United States.
Saudi Arabian Oil Co. leads the world in oil exports and is now planning to resume operations of its Dammam field, shut down in the 1980s due to low demand. Industry experts suggest the field still contains up to 500 million barrels of heavy crude. The new plan would increase Saudi Aramco’s production by 100,000 barrels per day.
“Dammam field including Dammam Well 7 can operate easily with current technology and Saudi Aramco conducted a 3-D seismic survey over the entire area almost 10 years ago,” said Sadad al- Husseini, a former executive vice president with Aramco and now a London-based researcher, in an email to Bloomberg.
A metropolitan area has developed around the Dammam field which could prove to be a difficult challenge for drilling operations. OilPrice notes the announcement is expected to draw protests and opposition from nearby residents, but Husseini added the move is due to "tight market conditions" and Aramco will conduct drilling “in the most modern, environmentally sensitive and professional manner that least affects the adjacent community.”
Aramco also has a plan underway for accelerating production to a maximum 900,000 bpd at its Manifa field located in shallow waters of the Persian Gulf.
The price of gasoline in the U.S. has seen a dramatic increase in recent weeks due to rising speculation of war with Iran, led by threats from Israel of the Islamic Republics’ perceived nuclear weapons program.