The South Rub al-Khali (Srak) exploration company has confirmed to MEED that drilling on its second and third wells was unsuccessful. Its shareholders will now have to decide whether to proceed with the planned first exploration phase of seven wells.

Of the other international consortiums EniRepSa Gas Company, a joint venture of Italy's Eni, Spain's Repsol and Aramco, is close to abandoning its first well, while Sino Saudi Gas, a joint venture of China's Sinopec and Aramco, is also believed to have drilled two dry wells this year.

Aramco is concerned about the lack of success on the exploration side, after initially suggesting the consortiums could collectively produce up to 2 billion cubic feet a day (cf/d) by 2011.

While it is still publicly supporting the exploration efforts, one Aramco executive says it needs to make a commercial decision around the gas search 'sooner rather than later'.

Patrick Allman-Ward, chief executive officer of Srak, who heads the joint venture made up of Aramco, the UK/Dutch Shell Group and France's Total, says he is disappointed by the failure of the second and third wells.

'There is something not going right for us at the moment and we need to determine why that is,' he concedes.

While Srak can exit the contract if three wells are dry or non-commercial, Allman-Ward favours further exploration.

'I personally believe that three wells is insufficient to test and we should proceed with acreage on the fourth well,' he says.

A senior executive at EniRepSa says its first well, Wutayed-1, has been temporarily plugged and it is drilling a second well as part of its initial four-well commitment.

The executive says the cost of drilling each well is now closer to $70 million compared with $50 million just two years ago.

'It is a very tight situation,' he adds. 'Costs are piling up and time is running out.'

A source close to Sino Saudi Gas says its first two wells have also been dry. Luksar, the fourth consortium, which is led by Russia's Lukoil, was unavailable for comment (MEED 24:8:07).

www.meed.com/oilandgas