Saudi Arabia, the world's largest exporter of crude, discovered four new oil and gas fields, the kingdom's minister of energy Prince Abdulaziz bin Salman bin Abdulaziz said on Sunday.
State oil firm Saudi Aramco discovered 4,452 barrels of unconventional Arab extra light sweet oil and 3.2 million standard cubic feet of gas at Well No. 2 in Al Reesh oil field, north west of Dhahran, according to a statement carried by the Saudi Press Agency.
Non-conventional gas has also been discovered at Al Sarrah reservoir at Al Minahhaz well, south-west of the Ghawar oil field, and at al-Sahbaa well, south of Ghawar. Al Minahhaz well has a capacity to produce about 18 million standard cubic feet of gas and 98 barrels of condensate per day, while Al Sahbaa well will produce 32 million standard cubic feet.
On top of these, oil has been discovered at Al Ajramiyah Well No. 1, with a well test showing a daily production rate of 3,850 barrels per day. The well lies north-west of the city of Rafhaa in the Northern Borders Province.
The discovery at Al Reesh is considered important "as it shows that it is possible to produce Arab extra light crude oil at the Tuwaiq mountain formation", the statement said.
Aramco has drilled two more wells at Al Reesh, No. 3 and No. 4, to determine its size. Well No. 3 is initially producing 2,745 barrels of oil and 3 million cf of gas per day. Well No. 4 is producing 3,654 barrels and 1.6 million cf of natural gas per day.
Saudi Aramco "continues to work on determining the size and volume of discovered fields and estimating the amount of oil, gas, and condensate in these fields", the minister said in the statement. The new discoveries "underline the wealth of natural resources the kingdom has at its disposal", he said.
Saudi Arabia accounts for about 17 per cent of the world's proven petroleum reserves. The oil and gas sector accounts for about 50 per cent of gross domestic product, and about 70 per cent of export earnings.
In February, the UAE discovered 80 trillion cubic feet of shallow gas reserves in an area straddling the emirates of Abu Dhabi and Dubai, the biggest find in 15 years. The Turkmen gasfield – the world's second-largest – was discovered in 2005 and is estimated to hold about 500 trillion cf of gas.
"The discovery of more reserves of Saudi extra light crude is especially beneficial for Aramco, as the grade trades at a premium to the heavier and more sulphurous barrels coming out of the kingdom," said Vandana Hari, founder and chief executive of Singapore-based Vanda Insights.
"In a year when tens of billions of dollars in upstream investment has been cancelled by companies across the world and we are likely going to face a drought of sizeable new discoveries for the foreseeable future, it is reassuring that Saudi Arabia is still adding to oil and gas reserves," she added.
"We believe the announcement of the discoveries are aimed at highlighting the overall wealth of natural resources in the kingdom rather than benefitting from it immediately," Junaid Ansari, acting head of investment strategy and research at Kamco Invest, said.
Like the other members of the Opec+ alliance, Saudi Arabia is currently curtailing production to ensure a better balance between oil demand and supply. As a result, Mr Ansari said he does not see the discoveries going "live with production anytime soon".
Saudi Arabia currently has capacity of about 12.4 million barrels per day, but is producing an estimated 9.2 million barrels per day on average, Iman Nasseri, Middle East managing director of Facts Global Energy, said.
Although new discoveries are important in terms of replacing capacity from maturing fields, given the current cutbacks the production of unconventional oil and gas is likely to remain "marginal and experimental" for the foreseeable future, he added.
"We expect any unconventional production coming out of the Middle East in significant capacity not to happen in the first half of this decade," he said.