Saudi Aramco Pulls Plug On $1 Billion Planned Restart Of Dammam Field

[hatrack]

Top oil exporter Saudi Arabia has cancelled plans for a $1 billion project to restart production from the country's first oil discovery due to the potentially high costs, industry sources said on Sunday. State oil giant Aramco has put under review contracts for some of its biggest expansion projects, signed at the height of the commodities price boom. Aramco aims to negotiate cheaper deals reflecting the sharp fall in the cost of raw materials.

The cost of redeveloping the Dammam oilfield would have been high because the field is under a populated area, sources said. The headquarters of Aramco itself is near the field.

The project target was to pump 75,000 barrels per day of crude and 100 million cubic feet per day of gas, sources said. The cost would have been around $1 billion, one source estimated. 'You can see why they've cancelled in this environment,' said one source. 'I'm sure also that due to the area being populated, the cost for redevelopment was excessive. It may be retendered at a later date. Who knows?'

Aramco told interested companies it had cancelled the bidding process after a number of contractors prequalified, one source said.

EDIT

http://www.tradearabia.com/news/newsdetails.asp?Sn=OGN&artid=153221