Saudi oil company Aramco is about to start developing the Jafurah shale gas field, which is located in the Saudi Al-Ahsa region, media sources reported.
Aramco confirmed that it is currently working to resume work in the field, which will cost approximately $110 billion.
The sources indicated that the company will work to develop the field with the noticeable rise in oil and gas prices during the current period.
Jafurah shale gas field
The sources added that the giant oil company re-invited a number of tenders for a package of projects related to the development of the field, among them is a tender to build a power station for the field, in early December.
The offering indicates that the company’s cash flows have recovered for the first time since the start of the pandemic.
The source said that the tender scheduled to be held about two months later was scheduled last year, and was postponed due to the downward trajectory of crude prices, and the company’s obligations related to the cash dividends it pledged during the initial public offering.
Aramco, the owner of the largest initial public offering in history, had pledged at the time of the listing an annual dividend estimated at $75 billion.
Since the beginning of the pandemic and the accompanying decline in oil prices, which reached zero levels for the first time in history, free cash flows have declined until they recovered again with the return of crude prices to rise.
It is expected, according to the source, that several local companies will compete for the bid, while international companies including SMBC, White & Case will provide financial and legal advice services for the project.
Early last month, Aramco announced a 103% increase in profits during the first half of this year, to 176.9 billion riyals ($47.2 billion), compared to 87.1 billion riyals ($23.2 billion) in the corresponding period of 2020.
The Jafurah shale gas field is located in the Al-Ahsa region and was discovered in 2014.
It is one of three reservoirs from which shale gas is expected to be extracted in Saudi Arabia, along with the Empty Quarter and the Hazm Al-Jalamid region in the north of the Kingdom.
In a related context, the Saudi Aramco Petroleum Products Trading Company is scheduled to participate in the price evaluation process it is implementing for crude grades in Asia, according to the Standard & Poor’s Global Platts oil pricing agency.