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179 comments on And how is Saudi Arabia getting on? (or more evidence of a deteriorating situation...)

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westexas on January 4, 2007 - 10:36am Permalink | Subthread | Parent | Comments top

So if in fact they are still at 35%, then that's a very good sign for them and indicates that no precipitous decline is in the works.

Which is exactly what Shell thought, as they were expanding their surface production facilities to handle an expected flood of new oil from the Yibal Field, when instead they got an unexpected flood of new water. Yibal, like Ghawar, was redeveloped with horizontal wells. Why? Because the vertical wells in both fields watered out.

Nope, nothing to worry about here. Go about your business. Go ahead and buy a new SUV to drive to and from your McMansion. I need still need to pay for this year's European vacation.

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nth on January 8, 2007 - 6:03pm Permalink | Subthread | Parent | Comments top

You make it sound like Shell invested millions of dollars in production capacity that never turn into fruition. This sure did not happen.

Shell's investments in the Yibal field did yield increase oil production, but as you pointed out, 90% water cut started showing up in some wells and Shell had to shelve any new investment to increase production capacity. They instead got stuck with ever higher production costs due to high levels of water.

The lesson here is that Shell's investment in enhanced recovery technology did not increase total ultimate recoverable oil, but instead speed up oil production for a short period before dropping. Yibal is a great example where new technology failed, but is not a good example of showing oil companies not meeting their short term projection as they sure did meet their short term capacity projections.

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