Aramco seen buying more rigs in 2016

“They are looking for new rigs to replace the poorly performing rigs, and this will be to maintain potential now that demand is coming back – that is for the oil side,” one source has been quoted as saying.

“As for the gas side, they need to add more rigs to increase production, and they are looking for deep gas.” Once Aramco starts looking for shale gas in the north, the number will be even higher, the source added.

In January this year, when oil prices steadied at below $60 a barrel, Aramco asked oilfield service companies to lower their charges in a move to reduce costs.

2014 saw the Saudi oil producer deploy 210 oil and gas rigs, making it an exceptionally busy year for the state-owned giant.

But reports of contract cancellations and dramatic fall of global rig count raised questions over whether the oil giant will keep its fleet steady or follow in the footsteps of other oil majors and reduce the number of its operating.

Reuters reported at the beginning of the year that according to industry sources it remains unclear how Aramco’s drilling plans for 2015 would look but that there was more focus on drilling for gas as domestic demand is rising.

One source revealed that he had already seen a few rigs moving to gas, while another said gas consumption in the Kingdom is getting higher.

It is also believed that most of the oil rigs will be kept to maintain potential oil capacity, while exploration for tight and shale gas continues in 2015, a third source told Reuters.

“Aramco has 2mn barrels of spare capacity so a reduction in oil drilling rigs does not mean a near-term reduction in oil production,” said Sadad al-Husseini, a former senior executive at Saudi Aramco and now an energy consultant.