Saudi oil field targeted by drone attack, production unaffected

By Javier Blas and Verity Ratcliffe on 8/19/2019

LONDON (Bloomberg) - Yemeni rebels attacked oil and gas facilities at the Shaybah field in southeast Saudi Arabia, but failed to disrupt production.

Saudi Arabian Oil Co., or Aramco as the company is known, extinguished a small fire at a natural gas liquids plant at Shaybah on Saturday morning, it said in a statement. There were no casualties and oil operations were not interrupted by the incident.

“We will provide further details as they become available,” the company said.

Yemen’s Houthi rebel leader Abdul Malik al-Houthi claimed the drone attack in a televised speech. He said the strike was meant to deliver an “important message” to the Saudi-led coalition which has been waging war to unseat the Iran-backed Houthi rebels since they overran the capital about four years ago. The attack is “a joint strike against Saudi Arabia and the United Arab Emirates,” according to a tweet published by Houthi-owned al-Masirah TV.

Saudi Energy Minister Khalid Al-Falih called the incident “a terrorist attack,” in a statement published on the Saudi Press Agency website.

“Saudi Arabia condemns in the strongest terms this cowardly attack, and affirms that this action of sabotage is a continuation of the series of vulgar attacks targeting the global oil supply chain that including those that were recently launched against oil pipelines in the Kingdom and tankers in the Arabian Gulf amongst others,” Al-Falih said in the statement.

Remote Treasure

State-owned Aramco calls the Shaybah oilfield “the most remote treasure on Earth.” The field was discovered in the middle of the Rub’ al-Khali desert in 1968, but there were enormous difficulties bringing it on stream. Ecological challenges, including sand dunes standing more than 300 meters high and summer temperatures of almost 50 degrees Celsius delayed crude production until 1998.

The field went through several expansion phases and today is able to pump 1 MMbpd, just under 10% of Aramco’s total production capacity of about 12 MMbpd.

Shaybah pumps some of the highest quality oil the kingdom is able to produce, akin to the crude pumped from the shale fields in the Permian. The field holds about 14.3 Bbbl of extremely valuable Arabian Extra Light Oil reserves -- equal to about 5% of the kingdom’s total reserves.

The field is in one of the most remote corners of Saudi Arabia -- so remote it’s called the “Empty Quarter” -- and linked to the main export terminals by a 645-kilometer pipeline.

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