Secrets of Saudi Arabia’s ‘central bank of oil’

As of 2011, national oil company Saudi Aramco amassed a total of 159 patents. This is testament to its continuing drive towards greater innovation

It cannot attribute its record-breaking production levels to one factor alone. Its new technologies range, from nano-robots that can travel through rocks, to laser technologies that can detect every change in underground oil fields. The only concern is that its production will be so successful, it will cause political tension with other OPEC members.

The company’s 2011 annual review contains more impressive numbers. To date, there have been 161 oil exploration and development wells completed; and 113 total oil and gas field discoveries. Yet the single new “wildcat” oil well unearthed in the Rub al-Khali only yielded 2,300 barrels of oil this year. Saudi Aramco produces 9.1m barrels of crude oil a day. This year’s record yield could equally be attributed to Aramco’s skilled workforce. It declares having made a “significant increase in the number of new employees hired,” to whom it offers generous healthcare, education and housing packages.

More significant perhaps is its R&D department, ranked highly by its peers. One new development this year was the MonoSat technology, which enables a far more accurate calculation of critical well parameters from reservoir logs. It helps get a better estimate of water saturation, the ultimate ideal for petrochemical analysts. Combined in a study of subsurface temperature and pressure, gas and crude oil gravity, this new information improves the calculation of a well’s formation volume factor (number of barrels it is possible to extract).

The company gained ownership of an effective way to create interactive maps of oil wells and reservoirs in 2006, when it created ‘DesertRay’. This oil fingerprinting technique uses laser pulses, to induce light signal responses from oils. The spectrum of reactions is examined by the DesertRay system within a tiny window of 2-5 nanoseconds. It is analyzed to produce what Aramco’s R&D program in Dhahram describes as “two-dimensional contour diagrams which act as spectral fingerprints of the oil.”

A library is collected of all the site images, which are stored permanently on DesertRay. The system notifies the operator of all changes resulting from contamination or degradation of the oil, within thirty seconds of them being detected. The team is currently researching fibre optic capabilities, to test inside existing storage tanks, trucks and ground water wells. Currently it is utilised principally on oil pipelines, but in the future it may be possible to fire the laser pulses from an overflying helicopter and get an overview of a much larger area.

This year the team continued to map out their resources; they made 32 comprehensive three-dimensional models, of 60 oil and gas reserves. The use of petrochemical algorithms has advanced to the degree where it has proven possible, in the Ghawat field, to create real-time, highly accurate maps for drilling. Results show the newly patented algorithm technology “improves the calculations of saturation and permeability,” and a “dramatically reduced time to update models,” where previously it took months.

Perhaps the invention that received the most publicity were the Resbots, microscopic robots around 1/1000th the size of a human hair. Aramco’s self-proclaimed ‘international award-winning research’ was only first trialled successfully in June 2010. The nanobots are added to water, then injected into the rock walls of an oil reservoir. They are small enough to pass through the ‘pore throats’ which connect the tiny pores in the reservoir rock.

Once immersed there, the Active Resbots perform three major functions: analysing reservoir pressure, providing temperature measurements, and accessing the fluid type. They are then collected at productivity wells, where their memory files are downloaded and analyzed. What Aramco calls the ‘Reactive Resbots’ “will be able to intervene to adjust unfavourable conditions by delivering chemicals, called surfactants, to allow easier flow of the reservoir liquid.”

In 2011 the company created Geo-Knowledge online Data Access Solution, a programme all its diverse employees can access internally; from petrochemist analysts to programmers and engineers. It collates information from corporate databases, geological and geophysical specialists, giving them up-to-date data from rivals and researchers. The innovative GigaPOWERS,  a virtual reservoir simulation technology, enables analysts and engineers to manipulate these maps and data virtually by hand.

The company’s future plans are almost limitless. Development of offshore facility the Manifa field, fifth-largest oil field in the world, is almost 97 percent complete. There are a number of new gas developments in the pipeline, like the Shaybah Natural Gas Liquids Program, with its pioneering Online Predictive Technoloy. Aramco also asserts its intention to diversify into petrochemicals. On top of its existing collaborations with Sumitomo Chemical and the Dow Chemical Co., its joint venture with Total Oil Co. SATORP (Saudi Arabian Total Refining and Petrochemical company) is “in the advanced stages of construction of one of the most complicated refineries in the world”.

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The May – June 2013 Issue

Highest corporate tax
rates in Europe

European countries are scrambling to raise every last penny of funds through taxes. But some countries may have gone too far...

Belgium

Though all business taxes in Belgium can be paid online with little effort and preparation, the rates are still sky-high at 57.7 percent, including a staggering 50.8 percent total rate on profits only in social security contributions.

Belarus

In Belarus, a company spends up to 338 hours annually preparing for and paying ten different taxes and duties. The total tax rate has incredibly been lowered to 60.7 percent, from 117.5 percent in 2008.

France

A company in France pays seven different taxes and duties, the sum of which can amount to 65.7 percent of profits; though President François Hollande has announced a wave of business tax rate cuts coming up.

Estonia

A business in Estonia pays 67.3 percent of profits in tax, 37.2 percent exclusively in social security contributions. The country has gone against the grain in Europe by raising businesses taxes from 48.6 percent in 2008 to the current rates.

Italy

While corporate income tax (IRES) in Italy is limited to 38 percent of taxable profit, a company operating in Italy can expect to pay 14 other taxes and duties, including social security contributions, bringing their total payable tax to 68.7 percent of profits, according to the World Bank.

Norway

Norway taxes motor fuels twice, with a road use tax and a CO2 emissions tax. Combined with strikes in the energy sector that have curbed output, the price of gas at a local pump has soared to $10.12 per gallon.

Turkey

Though Turkey sits on the Suez Canal and neighbours many oil rich countries, the price of a gallon of average gas clocks in at $9.41 in Turkish pumps, because of a 60 percent share of taxes. 

Israel

Like Turkey, Israel is surrounded by oil-rich neighbours, but drills very little itself. Gas prices are controlled by the government, so about half of the $9.28 per gallon goes to taxes.

Hong Kong

There are few gas stations in Hong Kong, but the ones available charge up to 76 percent more per gallon than mainland China, where the government caps the cost of fuel. A gallon at the pumps will cost around $8.61 on the island.

Netherlands

Expensive labour costs make the Dutch petrol prices the dearest in Europe, at $8.26 per gallon; though the 57 percent tax add-ons don’t help.

The credit crisis

8 February 2007
HSBC warns of subprime mortgage losses

2 April 2007
New Century goes bus

14 September 2007
Wholesale markets have dried up

17 March 2008
Rescue of Bear Stearns

7 September 2008
Rescue of Fannie Mae

15 September 2008
Lehman Brothers file for bankruptcy

3 October 2008
US congress approves $700bn bailout

14 February 2009
$787bn stimulus approved by congress

 

The effects of the current financial crisis are global and irrefutable. With the collapse of Lehman Brothers, the domino effect of irresponsible public monetary policies, huge levels of unsustainable debt, and a deregulated financial sector, has escalated to the point where no corner of the globe has been left untouched.

1973 oil crisis

October 1973
Syria and Egypt launch an attack on Israel on Yom Kippur and set off a twenty day war;

1977
US President Carter creates Department of Energy, which develops the US strategic petroleum reserve

 

The Organisation of Petroleum Exporting Countries (OPEC) used their oil reserves as a weapon with the Arab Oil Embargo against those who supported Israel. By January 1974, world oil prices were four times higher than they were at the start of the crisis, especially in the US, and the shock led to a huge drop in the stock market with NYSE losing $97bn in just six weeks.  The embargo lasted five months, and the effects are still seen today.

German hyperinflation

1922-1923

Hyperinflation
1923 – 1924
Stabilisation

 

The trouble began when Germany missed a repatriation payment, worth about one third of the German deficit in this period. Inflation was already high but by 1923 it was raging. Prices doubled within hours, and by late 1923, it cost 200bn marks to buy a single loaf of bread. People burned money as it was cheaper than buying firewood. Germany eventually regained control of its economy when it introduced the Rentenmark into circulation in 1923, and then the Reichmark in 1924.

The Great Depression

1929-1933
The Great Crash
1934-1939
Recovery and Recession

 

After the decadence of the Roaring Twenties, the 1930s saw the biggest economic slump of all time. The stock market crashed on 29 October 1929, and optimism and decadent living tumbled along with the figures. The GDP fell from $103.6bn in 1929, to $66bn in 1934 and the subsequent years of recovery were the most dramatic in US history.

1907 bankers’ panic

1907
Otto Heinze and his brother Augustus Heinze bought shares of United Copper.

 

The stock market was already cautious over the tight money supply, but the US was thrown into a depression after the stock market fell nearly 50 percent from its peak in 1906. The Heinze brothers thought they could influence market shares but ended up bankrupting lenders that provided the financing to buy the stock. A chain reaction left nine institutions bankrupt. By February 1908, the panic was over and the government created the Federal Reserve system, to prevent banks from exercising too much control over the economy.