The Kingdom is short of gas to meet demand from power plants and industry. Energy consumption has risen in the world's top oil exporter in recent years as record oil export revenues have fuelled an economic boom. In a rare opening for international firms, Aramco set up four consortia to drill for gas in the region in 2003-2004. The activity of other consortia in the region was also promising, Falih said. Luksar, a joint venture between Russia's LUKOIL and Aramco, had made two discoveries from the seven wells it had drilled, he told the newspaper. Oil industry sources have said it was unlikely either Luksar discovery would be profitable at the low price Aramco pays for gas produced in the kingdom. Part of the problem is that Aramco only pays 75 cents per million British thermal units (mmBtu) for gas produced in the kingdom. That would make it difficult for any company to move forward on development of a gas find if the gas field did not contain high-value condensates. Condensates are similar to light oil and consortia could sell condensates at international market prices. That means consortia have effectively been searching for condensates rather than gas, a much harder exploration task. Aramco had discovered tight gas reservoirs near the concession held by China's Sinopec Group and the concession held by Italy's Eni and Spain's Repsol, Falih said. He said the concessions holders had some “promising ideas” but gave no further details. Tight gas is in geological formations that make it difficult to pump, requiring special technology. Aramco sees the decline in oil demand as a temporary condition, though the focus now is on gas as oil production plateaus, the chief executive says. Saudi Arabia produces around 8 million barrels of oil per day as part of its commitments to the Organization of Petroleum Exporting Countries, the Platts news service reports. OPEC enacted tight production quotas in response to the global economic recession, slumping demand and declining oil prices. Falih told the Arabic-language daily Al-Hayat that oil production for his company peaked in July to 12 million bpd, 2 million a day more than long-term forecasts. This left the Kingdom with a surplus that he said would be brought to global markets once demand rebounds.
