Chevron hosts Saudi and Kuwaiti senior petroleum officials at onshore PNZ Large Scale steamflood pilot project

Minister Al-Naimi was accompanied by a delegation of high-ranking Saudi petroleum officials. They were welcomed by Chevron's George Kirkland, Executive Vice President for Global Upstream and Gas and newly appointed vice chairman, Guy Hollingsworth, president of Chevron Europe, Eurasia and Middle East, and Ahmed Al-Omer, president of Saudi Arabian Chevron (SAC), a subsidiary of Chevron Corporation.

Following formal remarks by Chevron's executives, the distinguished guests were led on a tour of the project's facilities.

The $340m LSP, which achieved first-steam injection in June 2009, is the final test in a nearly 10-year staged assessment by SAC to determine the technical and economic viability of thermal-recovery projects in the Eocene heavy-oil carbonate reservoir. The three-year project could potentially lead to full-field steamflooding of the reservoir, marking the first commercial application of a conventional steamflood in a carbonate reservoir anywhere in the world.

In an address to the distinguished guests, Kirkland said:

"Chevron is applying new technologies to free-up in commercial quantities the potential of the First Eocene carbonate reservoir. It is a potential in the onshore PNZ and elsewhere measured in billions of barrels of new energy resources."

Steamflooding involves injecting steam into heavy oil reservoirs to heat the crude oil underground, reducing its viscosity and allowing its extraction through wells. This phase of the project includes 16 injection wells, 25 producing wells and 16 observation wells and installing water treatment and steam generation and distribution facilities.

Chevron has successfully employed steamflooding to produce heavy oil from sandstone reservoirs at Kern River, California, for more than 40 years and at Duri in Sumatra, Indonesia, for 25 years. The company is recognized as the world's leader in steamflood technology.

"We bring four decades of experience in enhanced oil recovery to this project and are pleased with the progress we have made testing the technology in the onshore PNZ's First Eocene carbonate reservoir," Al-Omer shared with those gathered. "It's through our long-standing partnership with the Kingdom and our joint operatorship with Kuwait Gulf Oil Company, that we are able to apply innovative technology expected to grow recoverable reserves in the onshore PNZ, and to create thousands of jobs in the process, as well as provide other benefits for the region."

SAC operates on behalf of the Kingdom of Saudi Arabia the Kingdom's 50% undivided interest in the petroleum resources of the onshore PNZ between the Kingdom of Saudi Arabia and the State of Kuwait. SAC's operating agreement with the Kingdom was recently extended and amended, and runs until February 2039.

The operations include four fields in the area - Wafra, South Umm Gudair, South Fuwaris and Humma - that produce mainly heavy crude from 10 reservoirs. In 2004, production of the 3 billionth barrel of oil was reached in the onshore PNZ.