The Oil Drum | DrumBeat: July 10, 2006

211 comments on DrumBeat: July 10, 2006

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bradshaw on July 10, 2006 - 9:46am

Saudi Arabia Tests Its Potential For Unlocking Heavy-Oil Reserves

Behind Pay wall...

With global energy demand soaring, Saudi Arabia, whose abundant reserves of light oil have supplied the world for decades, is looking to unlock its huge, hard-to-tap and largely unexploited reservoirs of heavy crude.
If it succeeds in overcoming the technical hurdles, the effort could significantly increase Saudi Arabia's oil reserves over the next several years, potentially adding some slack to tight energy markets. It would also be a blow to so-called peak-oil theorists who have forecast that world oil production is on the brink of peaking.
Crude-oil prices have more than tripled since 2002 as increases in global demand have ...

hard-to-tap? What exactly is this? I'm sure someone here at TOD has more input on the Saudi hard-to-tap heavy crude...Is this hard-to-tap already included in their 260Gb of oil reserve or is this something else?

-C.

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Leanan on July 10, 2006 - 9:51am

I believe they are talking about steam (see article linked above).

The WSJ article may be available for free later today or tomorrow, in the Pittsburgh Post-Gazette. WSJ articles often are, a day or two later.

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odograph on July 10, 2006 - 9:58am

Boy you brought us lots of links to read today, Leanan. Thanks. I dipped into the "Chinese hydrogen cars" sure that I'd find H-ICE (hydrogen internal combustion engines) but was shocked to see talk of fuel cells.

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Darwinian on July 10, 2006 - 10:04am

Steam? It would be interesting to know exactly what they are talking about here. Most Saudi heavy oil can already be pumped so I imagine they are talking about the heavy bitumen shield that borders most of the southern part of Ghawar.

Another thing they may be talking about would be injecting naphtha to try to mix with the bitumen and make it thinner. But this is nothing new, Saudi has been re-injecting naphtha for some time.

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jokuhl on July 10, 2006 - 12:53pm

Just the clip from Bradshaw made it hard to pass the smirk test.. my 'Wanna buy a bridge?' alarms are going off so often now, I worry that I won't even be able to discern them before long. 'Now we're going after the other reserves, and we'll show 'em!'

I didn't look at the article, but in looking at the url, I saw the term 'farticle', which made me wonder if it was from the Onion or something.. that, or it's part of the WSJ's new series of FTG (food to gas) energy alternatives. Almost like steam.. Hey, could we solve the oil-sands, shale and heavy crude extraction processes with enough hot air? Wall Street IS the solution!

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yashko on July 10, 2006 - 9:52am

And here I thought I woudl be the first to post on this topic. Saudi Arabia has "lots" of heavy crude, which no one wants to refine. The heavy oil has been known for decades, and had been discovered before their earlier 170 GB estimates. The question is not whether heavy oil is part of their new 400GB plus estimates, but how much of that estimate is bitumen.

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Leanan on July 10, 2006 - 12:13pm

Not behind a paywall....at the Pittsburgh Post-Gazette. :-)

Saudi Arabia tests potential for unlocking heavy-oil reserves

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bradshaw on July 10, 2006 - 12:15pm

Read the entire article, thanks.

-C.

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bradshaw on July 10, 2006 - 12:17pm

I Read the entire article, Thanks for posting an updated link... sure would be nice to have an edit post feature :-P

Thanks Again Leanan

-C.

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westexas on July 10, 2006 - 12:22pm

It seems to me that Enron may be a pretty good analogue for Saudi Arabia

Look how long it took the investment community to finally conclude that Enron executives were lying about the true state of its finances. Initially, only a tiny handful of analysts and reporters were questioning Enron's finances.

The handful of early skeptical reports about Enron kind of remind me of Matt Simmons' groundbreaking work on Saudi Arabia.

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bradshaw on July 10, 2006 - 12:41pm

I agree. The lack of transparency allows them keep the world in mystery...(obviously not much longer as so many here have pointed out as well as other authors on the subject)

We're about to pull back the curtain and see the machinery huffing, puffing and sputtering as they spew water tainted with drops of oil.

But surely by then this heavy oil project(s) will be well underway and replace Ghawar and the likes right ;o)

-C.

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memmel on July 10, 2006 - 12:44pm

I don't know about you but its well known that steam and carbonate rocks don't mix well. With dissovled co2 readily avialable in a oil well you probably get a pretty nice carbonate mobilizing agent. I'm sure steam works for a while but its got to cause massive mobilization and deposition of carbonate over any longer term.

Anyone know ?

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westexas on July 10, 2006 - 1:11pm

The WSJ article mentioned that there are no large scale steam injection programs in carbonates, and the energy reporter on CNBC noted that a lot of experts are skeptical.

I have previously described my "Iron Triangle" thesis, to-wit, that most housing/auto/finance companies; most media companies and most oil exporters/major oil companies/energy analysts have a vested interest in persuading energy consumers that all is well--just keep buying and financing large homes and autos.

The oil exporters/major oil companies/energy analysts provide the intellectual ammunition for the media to spread the word that Peak Oil is bogus. Note that the second paragraph of the WSJ article had the following: "It would also be a blow to so-called peak-oil theorists who have forecast that world oil production is on the brink of peaking."

There is a little bit of unintentional irony in the article, when the authors note that conventional recovery factors are typically about 35%--which is about where Ghawar, the largest producing oil field in the world, is at. Do you think that there might be a connection between this PR release by the Saudis, on the front page of the WSJ, and collapsing production in the Ghawar Field?

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earldaily on July 10, 2006 - 2:11pm

wt
have you ever read this book
http://www.prwatch.org/books/tsigfy.html
it's a real eye opener
and here's an interesting page that starts to show how hard aramco et. al. will work to sell the status quo
http://www.prwatch.org/search/node/arabia

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