Exploring new horizons

By Diana Milne, Editor

Arabian Oil Company has ambitious plans to expand its Middle East oil operations and boost exploration and production on the Norwegian North Sea. Diana Milne caught up with AOC Director Yoshio Yokoyama to find out more.

What Middle East oil operations has the Arabian Oil Company been involved in or is currently involved in?
Yoshio Yokoyama. We operated between Saudi and Kuwait as part of a joint venture since 1960. It operated for almost 50 years produce oil and export it to Japan mainly. But this concession between Kuwait and Saudi authority has already expired, so at this moment, we are not operating anymore in Saudi.We currently have one project in Egypt, which is in the Gulf of Suez. We drilled one well, and it was successfully completed and produces 5,000 barrels per day. And so now we are trying to drill seven more wells but just waiting for time.  Now all is down while we are awaiting delivery of some material casing.

How did your company help to build business relationships between Japan and Saudi Arabia as a result of your Middle East operations?
YY. Actually, we were stationed in City of Khafji, and that's close to the border with Kuwait, about 10 kilometers away. Before we arrived there was nothing there, just desert. When we arrived there in 1960 we built up more facilities and organisations, and so we helped the Saudis to build a community there and we helped to create jobs and built schools. It has now become a big town. And the community was not just for the oil industry.

What other international operations is your company currently working on?
YY. In the Gulf of Mexico we had gas production operations but this was almost four years ago and we have already sold out to another company. We are working alongside the Chinese Petroleum Company in the South China Sea, which is a great project. We have used horizontal drilling techniques there and as a result production there doubled. We produced oil from there for 15 years but now the license has expired and it has moved back to China. We are no longer involved in it.

Which parts of the world does the Arabian Oil Company plan to target as part of its quest for new exploration opportunities?
YY. We think our priority area is the Middle East. So in addition to Egypt, we are investing in Turkey and Qatar. We will be looking particularly at gas production, maybe involving clean energy. This is because in many GCC countries, such as Saudi Arabia or Kuwait, there is a great shortage of gas. So those countries have to import gas and other forms of energy also. 

What does your company hope to achieve in the year ahead?
YY. Well now is a good time for purchasing projects because all the prices are going down and some companies try to sell projects. And we can find good prices. Another challenge is that we are in the second bidding round for projects in Iraq. The results will be announced soon. We are hopeful about it.

About Arabian Oil Company

Arabian Oil Company was formed in the 1960s after discovering oil in the Khafji oil field in the offshore neutral field between Kuwait and Saudi Arabia. Exploration activities began under the concession agreements maintained by both countries. AOC maintained operations there for 40 years. Although the original concession agreement ended AOC continued to operate there through a Technical Services Agreement with Kuwait until January 2008.

The company is currently exploring new commercial opportunities in the Middle East and in the Norwegian North Se. It is currently participating in crude oil producing operations in the Norwegian continental shelf and is exploring for crude oil in the Gulf of Suez in Egypt.