Saudi SRAK Contracts 2nd Rig for Gas Exploration

DAMMAM, Nov 20, 2006 (Dow Jones Newswires)

Saudi-based South Rub Al-Khali Co., or SRAK, said it has contracted a second rig to be used to drilling for natural gas in the southern part of the Saudi Empty Quarter desert region.

SRAK is a joint-venture operating drilling for non-associated gas and gas condensates on behalf of its three shareholders: Royal Dutch Shell with 40%, and France's Total and Saudi Arabian Oil Co., or Saudi Aramco, each holding 30%.

"We hope to start our second drilling sequence in the middle of July next year" Patrick Allman-Ward, SRAK's chief executive, said Sunday.

SRAK's chief executive, who is attending the Saudi Energy Forum, said the results from the drilling of the first exploration well, which started July, won't be available before year-end.

The first rig will then be moved to the second well in Almirtan, about 1000 km away from the first well, with drilling expected to start at the end of February or beginning of March next year, Allman-Ward said.

The second rig will be used to drill other wells, he said.

SRAK has the right to exit after three dry, or non-commercial, wells, but the chief executive said the company's shareholders are keen to complete the full commitment of seven wells.

"We absolutely will drill three (wells): it's the shareholders decision to decide whether we continue, but my feeling is the shareholders are keen that we complete the full commitment," he said.

Copyright (c) 2006 Dow Jones & Company, Inc.

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