Five Easy Leases: Ghawar's Discovery Wells  

JoulesBurn has another of his "satellite o'er the desert" posts at The Oil Drum, this one taking a look at Ghawar - Five Easy Leases: Ghawar's Discovery Wells. These posts seem to get plenty of attention in the mainstream financial press - in this case, the FT picked it up.

A few months back, Saudi Aramco commissioned a story about the first wells in the Ghawar oil field in Saudi Arabia, the world's largest. With the title "Ghawar's Magnificent Five", it was published first on the Saudi Aramco website but has subsequently appeared elsewhere. Saudi Aramco later published the same article along with the companion piece "Still Going Strong" (subtitled "57-year-old super-giant Ghawar oil field productive as ever") in the Fall 2008 issue of SA Dimensions magazine, also available on their website1. "Magnificent Five" is the newly minted moniker2 for the group of discovery wells, one for each of the five major production areas of Ghawar: 'Ain Dar, Shedgum, Uthmaniyah, Hawiyah, and Haradh. These articles are remarkable in that Saudi Aramco rarely reveals production details for specific wells in Ghawar, but something in this myth-building exercise is amiss -- both in the consistency of the numbers provided and their use as indicators for the state of the wells and the overall field. In this article, I will examine the data provided for these wells and cross check with other available information including satellite imagery available within Google Earth. There is definitely more to the story, and this uncut version is actually more interesting than what Saudi Aramco has released to theaters.

First Things First
The first, (or discovery) well is certainly critical to the success of an oil field in that, well, there has to be one. Its story can also be one of drama, as is the case for the first (successful) well in Saudi Arabia, Damman #7 (aptly named "Prosperity Well"), located a short walk from Saudi Aramco's headquarters in Dhahran. Here are some excerpts from an account of the drilling:

By May, 1937, everybody around Dammam admitted that the well was in bad shape and was going to be slow. There was a spurt in July that took them down to 2,400 feet, then delays again. On October 6 they had reached 3,300 feet. Tests then, as well as on the 11th and 13th at slighly greater depths, produced the same report: "No oil, no water." At 3,600 feet, on October 16, they got their first showing of oil—about two gallons, in a flow of thin gas-cut mud. On the last day of 1937, with the hole drilled to 4,535 feet, the well blew out when the control equipment failed. After contact was reestablished, measurements showed the well making 30 million cubic feet of gas a day against 1,600 pounds back pressure. Because of the high pressure they let it blow for seven hours while mixing mud to kill it with, and then killed it without difficulty. There was no oil in the gas it blew. ... While he was selling them, Ohliger's crew was drilling past the "fish" that it had been unable to pick up, and on March 4, 1938, San Francisco got the word that blew it back again into the euphoria of the summer of 1936. Tested on that day, No.7 flowed at the rate of 1,585 barrels a day. Tested three days later, it flowed at the rate of 3,690 barrels. The drilling party stuck the tester in the hole and couldn't get it out, and the well, flowing as nearly open as possible through the stuck pipe, went on producing at a rate that made them cheer.

Pretty gripping stuff, and probably worth the well being immortalized with a nickname and by mounting the original wellhead at Saudi Aramco headquarters. Anyway, back to the "Magnificant Five".

Given its size, Ghawar warrants five discovery wells (Fazran's well didn't make the team). Disappointingly, the tale related for each of these discoveries is not as gripping as that for Damman #7. Also, these are likely not the most productive wells in each of the areas, and lauding the achievement of any particular well in Ghawar seems somewhat akin to giving the straw credit for the margarita. So why tell their story? As shown in the excerpts below, it seems to be a case of wanting to cement the legacy while reassuring the world that the "Glory Days" are not gone.

Since the discovery of the Ghawar field in 1948, Saudi Aramco has implemented best-in-class reservoir management practices and leading technologies that have evolved over the years. As a result, the Magnificent Five have demonstrated extraordinary performance with extended lifecycles and outstanding oil recovery.

and in conclusion:

Altogether, the Magnificent Five have produced nearly 350 million barrels of oil. There’s no telling how much more they will produce — as the end of their story is not yet in sight.

Unless you go looking for it. ...