Memorandum of Conversation, by Mr. Richard Funkhouser of the Office of African and Near Eastern Affairs


Subject: Aramco Exploration Activities

Participants: Mr. Seager, Manager, Aramco Exploration Department, Dhahran, Saudi Arabia
Mr. Eddy, Washington Representative, Aramco
NE—Mr. Awalt
NE—Mr. Funkhouser
NE—Mr. Russell

In discussions of Aramco exploration activities in Saudi Arabia the following points were made:

Aramco’s drilling program calls for seven rigs, three at Ain Dar and one each at Haradh, Abqaiq, Qatif and Safaniyah.
The Safaniyah location is 4–5 kilometers off the shore at Ras al Safaniyah. This rig will be spudded in before the end of the year and will be used to fulfill Aramco’s drilling obligations in the submerged areas. It is remembered that an Aramco shallow depth core drill struck an oil producing horizon at this location. Mr. Seager stated that seismic evidence indicated that the structure dipped off sharply to the northwest which would minimize the chances of its extension into the undivided and unconcessioned Kuwait Neutral Zone submerged area.
Abqaiq field is currently being pulled at a rate considerably in excess of its most efficient production. To relieve pressure on Abqaiq [Page 105] the Ain Dar structure is being developed. A 22-inch pipeline between the two fields is nearing completion. To date Abqaiq has shown no tendencies toward water encroachment which to Mr. Seager was unfortunate since the absence of this evidence indicated no water drive in the field. Mr. Seager stated that there were no plans for recycling the large amounts of waste gas at this time.
Latest production, week of October 8, amounted to 620,000 barrels a day; 15,000 of which came from Qatif, 100,000 from Ain Dar and the remainder from Abqaiq. The Haradh field now has five producing wells. However, Mr. Seager could not state what pipeline plans the company had in mind for this field. Mr. Eddy asked if the Department was still actively interested in having a pipeline directed toward the southeast part of the Arabian Peninsula for strategic purposes. Mr. Awalt answered that to his knowledge this subject had not arisen since he had been on the Saudi Arabian desk and had no knowledge that any other Department agency was actively interested in any such project. Mr. Eddy seemed interested in developing the point and expressed the thought that the Department of Defense was the agency interested in this matter.
Mr. Awalt discussed in some detail latest developments with respect to boundary problems. Mr. Seager stated that the Saudi Arabian Government had not placed a marker on the Island of Farsi since it was well known that the island was an Iranian possession. Mr. Awalt stated that this was the first indication that had been made to him indicating that the Saudi Arabian Government respected Iranian claims to this island, and expressed the belief which later proved correct that the Saudi Arabian Government had placed a marker on Farsi.
Mr. Seager emphasized the point that Aramco was only carrying out orders from the Saudi Arabian Government in its research on boundary claims, taxation, tribal allegiance, etc. in disputed areas. Regarding islands and submerged areas, Mr. Seager stated that Aramco had no commercial desire to extend limits of their concession, that it was much more costly to drill in the water than on land and that Aramco had more land structures than they could develop in a great many years. Mr. Awalt evinced some surprise at this statement and asked if Aramco did not desire to extend the area of their concession into new oil producing zones, why did they take out the concession covering submerged areas. Mr. Eddy stated that, “as anyone in Aramco will tell you, the only reason the submerged area concession was taken was in order to keep others out”.
Mr. Seager, in answer to a question, stated that Aramco’s relinquishment program called for 33,000 sq. miles to be given up every three years. This article was confirmed at the time the submerged [Page 106] area concession was signed. Aramco had already given up 33,000 sq. miles in the Yemen area, the location of which Mr. Seager was vague about. Mr. Funkhouser asked if the company contemplated publicity on these relinquishments. Mr. Eddy replied that this was a question for top management and that he would endeavor to get an answer from Mr. Duce.