Russia's Lukoil To Drill For Tight Gas In Saudi Desert

Saudi Aramco said in its 2013 annual review released on Thursday that it was developing new hydraulic fracturing technologies to increase recovery rates and improve cost efficiency. It cited "a CO2-based fracturing fluid as one of the techniques that may meet the water supply challenge."

"Aramco is in the evaluation phase of shale gas and it's an evaluation that requires large capital spending. Further development will happen based on results," said Husseini.

"It seems that Lukoil wants to be a partner in the evaluation process."

For now, the most concrete initiative by Aramco is a plan to produce 200 million cubic feet per day (cfd) of unconventional natural gas by 2018 to supply a new phosphate project and power plant in the north of the country.

Aramco is also drilling offshore in the Red Sea and has made gas discoveries there.

Oilfield service companies such as Baker Hughes, Schlumberger, Weatherford and Halliburton have all set up operations and bases in Saudi Arabia to help Aramco develop technology for unconventional gas.