<DrumBeat: December 11, 2006 The Oil Drum Where Should We Try Congestion Pricing First?>

428 comments on A Debate on the Substance and Timing of the Peak of Oil Production and Consumption, Part II

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westexas on December 11, 2006 - 10:57am Permalink | Subthread | Comments top
In my opinion, the question of whether or not Saudi Arabia's decline in oil production this year is voluntary is the key question.

http://www.energybulletin.net/16459.html

Published on 24 May 2006 by GraphOilogy. Archived on 25 May 2006.
Texas and US Lower 48 oil production as a model for Saudi Arabia and the world

by Jeffrey J. Brown & "Khebab"

These comments are based on the graphs, prepared by Khebab, in the captioned article.

At the end of 1972, Texas had produced about 35 Gb of crude + condensate (C+C).  Khebab's plot showed that Texas had remaining estimated recoverable reserves of about 27 Gb at the end of 1972, with an annual production rate of about 1.25 Gb/year, resulting in a reserve to production ratio of about 22 years at the end of 1972.  This implies that production had to fall, and since peaking at 57% of Qt in 1972, Texas has shown a long term decline rate of about 4% per year.

At the end of 2005, Saudi Arabia (KSA) had produced about 108 Gb (I believe C+C).  Khebab's plot showed that KSA had remaining recoverable reserves of about 78 Gb at the end of 2005, with an annual production rate of about 3.5 Gb/year, resulting in a reserve to production ratio of about 22 years at the end of 2005.   This implies that production had to fall, and since since (IMO) peaking at 58% of Qt in 2005, KSA has shown an estimated 4% decline so far this year (and about a 7% decline from 12/05 to 12/06).  

I estimate that Saudi Arabia, in calendar year 2006, will have burned through about 4% of their remaining conventional crude + condensate reserves.  

Unless someone has a question for me, I probably won't post any more comments.

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oilmanbob on December 11, 2006 - 11:23am Permalink | Subthread | Parent | Comments top
Jeffrey, do you think the allocations by Saudi in east Asia support your net export decline theory, or is it just to damn early to tell?
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westexas on December 11, 2006 - 12:10pm Permalink | Subthread | Parent | Comments top
"Jeffrey, do you think the allocations by Saudi in east Asia support your net export decline theory, or is it just to damn early to tell?"

I think that the reduced exports are not voluntary.  Based on the 2004 to 2005 increase in consumption (about 22% for KSA) and assuming that we see something similar for 2006, and based on the reported production decline, I estimate that KSA's net exports fell by about 13% from 12/05 to 12/06.  

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ET on December 11, 2006 - 1:13pm Permalink | Subthread | Parent | Comments top
The main question I have about comparing KSA and Texas is the fact that KSA has so many oilfields, most of which apparently have been either totally untapped or almost totally untapped.

I understand that the overwhelming bulk (> 90%) of their production has come from the 5 largest fields and perhaps a dozen or so smaller fields over the past 50 years. This still leaves 80 or 90 oilfields that are supposedly capable of producing oil. The 'rest' of the oilfields in KSA, as I understand and as Matt Simmons outlines in 'Twilight', are not only smaller than the super-giants and giants, but are potentially more problematic in terms of geology and the ability to produce at a high volume.

Nevertheless, if KSA has 80 untapped oil fields, and though 'small' by KSA standards, some are large by oil field standards in the rest of the world, it would seem that there remains potential in KSA that does not exist in Texas. How does one get large production from a slew of slow producing fields? By drilling many wells (look at Russia's 1,000,000+ wells), and, guess what? KSA is apparently in the process of drilling many new wells.

I know that the conventional wisdom is that these leased rigs are being used to upgrade and workover the existing producing fields, but to what extent do we really know this?

It may be true, if KSA's super-giants are in decline, that there is no way to reverse the production curve and that drilling several thousand more wells, whether in new formations or old, will only slow the decline. But, in reading 'Twilight' one keeps seeing the maps with these dozens of untapped fields which are barely even mentioned. Unless they are totally fabrications, they still represent a significant amount of reserves, however slowly their contents may be produced.

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jkissing on December 11, 2006 - 3:48pm Permalink | Subthread | Parent | Comments top
The only evidence that we have is that the number or rigs drilling for oil is up 3x over two years, and production is down. It is not enough to say that, in theory, with enough rigs, SA could increase production to a new peak.  The world has a limited number of rigs, all of which are drilling for either oil or gas somewhere; as it is, ksa has poached rigs from our gulf to drill in theirs, presumably resulting in less production in our gulf even as their production also declines; all rig manufacturers are fabricating rigs as fast as they can; and demand for rigs everywhere continues to climb because, nearly everywhere, each new well produces less, and for less time, than old wells used to.
Hubbert's curves work because, when a region peaks, it becomes much more expensive to even maintain production, much less expand it, and not because a region has run out of oil.  If ksa has in fact produced 58% of urr, we will never again see 9Mb/d, much less 10, 12, or 15.
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428 comments on A Debate on the Substance and Timing of the Peak of Oil Production and Consumption, Part II

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