Aramco puts Red Sea project on ice – reports

Saudi Aramco has put its deepwater oil and gas exploration and drilling activities in the Red Sea on hold because of the high cost of the projects, according to reports.

The cost of operations in the Red Sea, a new area for the energy giant, was around $1mn per day, two sources told Reuters.

“It is related to budget cost reduction in the Red Sea offshore,” said one of the sources.

A second source said deepwater exploration in the Red Sea had stopped because of several factors, including environmental issues, costs, and the need for further studies to minimise risks.

“One of the most expensive offshore (areas) happens to be in the Red Sea – the depth is different from the Gulf coast,” said a third source is quoted as saying by the news agency.

“They did discover a lot of oil and gas but they need to do lots of tests. Now with the current prices, they have put it on hold until further notice to collect more data.”

It is the latest report that Aramco is looking to cut costs in the face of falling oil prices, including asking service companies to charge less.