Could the Robert Heinberg rumour be true?

"At the ASPO conference a well-connected industry insider who wishes not to be directly quoted told me that his own sources inside Saudi Arabia insist that production from Ghawar is now down to less than three million barrels per day, and that the Saudis are maintaining total production at only slowly dwindling levels by producing other fields at maximum rates. This, if true, would be a bombshell: most estimates give production from Ghawar at 5.5 Mb/d."

http://www.rense.com/general73/to9p.htm

http://www.evworld.com/article.cfm?storyid=1080

Hmmm...good time to repost these two reports. It's getting harder and harder to brush them off as "incorrect" isn't it?

(Sorry Dragonfly for cutting in).

Cid - It's 'Richard' Heinberg, not Robert.

Opps! I know that! Silly me.

A CEO of an Australian listed oil/gas company recently claimed to me that his friend within the Saudi oil industry have told him Saudi Arabia is producing "flat out".

A bit third hand I know.

Heinberg's piece in todays drumbeat if true could have an even bigger impact than Ghawar's decline:

A soon-to-be-released study by the Energy Watch Group in Germany on the future of global coal supplies has implications so surprising and far-reaching that energy policymakers may take years to digest it. ... The report’s central conclusion is that mineable global coal reserves are much smaller than is commonly thought, and that a peak in world coal production is likely within only ten to fifteen years.

Link to projected coal production:
http://www.richardheinberg.com/files/possiblecoalproduction.gif

If this is accurate global warming will soon be a non-issue.

Heinberg's article struck me as crucially important as well. If we are in fact going to be facing an across-the-board fossil fuel crisis in the near future, we'd best be ready to make some hard decisions on adaptation, curtailment and substitution. We probably won't but it would be nice if we had good data just in case someone decided to do something sensible.

On that note, if all FF's start to decline, the pressure on biofuels is going to become enormous. Just for shits and grins, the other day I did a calculation: if we took all the world's vegetable food crops and turned them into fuel, how much oil equivalent would we end up with? Here's the quote from the biofuels article on my web site:

How much oil-equivalent biofuel could we actually make if we turned all the world's major grain and oilseed crops into automobile fuel, leaving none whatever for food? In other words, what are humanity's relative energy requirements for food and transportation? Would their scales of use allow us to easily and effectively substitute a portion of our food energy use for transportation fuel?

To answer this question I considered ethanol from corn, wheat, rice, sugar cane and sugar beets, and biodiesel from soybeans and rapeseed (canola), plus palm&sunflower oils. In each case I converted the entire world crop into fuel, discounted the ethanol by 1/3 for its lower energy content, and converted the annual production in litres to the oil-industry standard measure of millions of barrels of oil equivalent per day. Here are the results:

Ethanol

Corn:
World crop (Million tonnes): 700
Litres per tonne: 400
MBOE/day: 3.2

Wheat:
World crop (Million tonnes): 600
Litres per tonne: 370
MBOE/day: 2.5

Rice:
World crop (Million tonnes): 600
Litres per tonne: 400
MBOE/day: 2.7

Sugar Cane:
World crop (Million tonnes): 1324
Litres per tonne: 100
MBOE/day: 2.5

Sugar Beets:
World crop (Million tonnes): 250
Litres per tonne: 108
MBOE/day: 0.3

Biodiesel

Soybeans:
World crop (Million tonnes): 270
Litres per tonne: 140
MBOE/day: 0.5

Rapeseed (Canola):
World crop (Million tonnes): 55
Litres per tonne: 400
MBOE/day: 0.4

Palm&Sunflower oils:
World crop (Million tonnes): 42
Litres per tonne: 900
MBOE/day: 0.7

The total from turning virtually all of our food into fuel is 12.8 MBOE/day - only 15% of the current world oil consumption of 84 million barrels per day. To make matters worse, it takes a lot more energy to make biofuels than it does to simply pump oil from the ground and refine it. A rough estimate is that it takes at least twice as much. Accounting for this necessary energy outlay reduces the available net energy of our biofuels to less than 8% of the world's oil consumption.

This is one of the reasons why using crop-sourced biofuels for transportation is such a horrifically bad idea. We strip mine our top soil, we deplete our water tables, we starve everyone and we still have only an 8% solution. We all - individuals, countries and our whole civilization - need to be very, very cautious in promoting the use of biofuels, lest our thirst for transportation fuel overrun our common sense. And we must always remember to crunch the numbers.

Wow.

Interesting piece of work, Glider.

Once we get the tree huggers and duck lovers out of the way, we should be able to increase that total to 10%.

Mmmm.

Fill'er up, please..
I'll have the Fois Gras with Maple Syrup glaze..

"Music to drown by. Now I know I'm in First Class"
- Tommy .. Titanic

Well done!  Amazing what nonsense can be dispelled with some scribbling on the back of an envelope.

Now the job is to get that news out there, so the propagandists get sneers and jeers when they try to push these lies onto the public.  The sooner we can eliminate the credibility of the non-options, the sooner we can get policy aligned with the things we have to do.

I suspect the enthusiam for biofuels has more to do with the fortunes which could be made than the potential for a solution. It may only end up being 1% of our fuel supply - but wouldn't you like to get your hands on the revenue from that one percent?
You could say the same about CTL - it may not sense from a global perspective, but a million barrels a day multiplied by $50 a barrel is nothing to sneeze at. Who will be the first CTL billionaire?

You could probably make a lot more money from building the energy systems to make biofuels into viable replacements instead of niche products with petroleum, but the visionaries behind these seem to be keeping quiet.  I probably would too, in their position; the less attention you attract, the further you can get before the people whose interests would be threatened start to attack you.

Though not in any sense a disagreement, I would like to point out that rapeseed oil can be poured directly into a diesel motor, at least when it is warm enough outside. This isn't exactly happening where I live in Germany (yet), but a lot of the small tractors here which are decades old won't have any problem, at least in the summer. And yes, there are a number of places which can press the oil locally. As a matter of fact, there is a dealer on the B3 parallel to the A5 Autobahn who can sell you a thousand liters to store at home, since such 'refined' oil is safe to handle - he uses the same plastic/metal enclosed containers that are common for wine or milk. (If we buy a diesel, I have thought about buying one or two to keep around the house in the garage.)

In other words, at least in terms diesel substitutes on farms, it is possible to imagine a fairly simple system, thus increasing the amount of energy available within a somewhat closed system.

I realize that this point doesn't apply to an agricultural production system which is no longer local, as in the U.S., but there is reason to believe that efficiency can be improved by removing the 'refining' step of biodiesel (at least for rapeseed) - especially when you look at some of the interesting work being done to modify a diesel's fuel system to allow it to burn straight plant oil efficiently, even in winter.

Obviously, this only replaces oil in a limited context, but considering the amount of energy currently used to get refined oil products to a farm, this is likely not a trivial gain. Equally obviously, this scenario only allows for farming to continue using mechanical means - it doesn't help with food distribution much, unless you have a decent electricified rail/barge network in place to move bulk amounts of grains.

Heinberg's article definitely sounds like it could be big news. I was curious about the role of Illinois coal. So I googled "Illinois Coal Production" and found this enlightening article from Southern Illinois University - Carbondale,

http://www.siu.edu/~perspect/05_sp/coal1.html.

Its subheadline is this:

"Illinois coal is well suited to new, cleaner energy systems on the horizon. Reducing global warming and developing a hydrogen economy may depend on these technologies, which are being researched intensively at SIUC."

Apparently Illinois coal production fell by 50% becasue it is higher in sulphur than Wyoming coal and difficult to scrub. The hope is that with coal gasification and IGCC, this will not be a problem and will in fact lead to industrial sulphur production. The whole article is a fascinating look at carbon dioxide sequestration, coal bed methane, efficient coal recovery, and other issues related to 21st century coal use.

I think this deserves a closer look, and frankly, it disturbs me a little bit that someone as high profile in our community as Heinberg would just accept the 50% decline in Illinois coal as a sign of a limited supply without apparently doing much checking into it.

Jeff,

I think you are right. Coal production in the US had a false peak. It began dropping in the US in the late 90's bc/ of regulations favoring the use of NG and discouraging coal enacted in the 80's. The vast majority of electricity plants built in the last couple decades burn NG. The NG frenzy peaked a few years ago. In 2000, 95% of all new electric plants were NG burning. This changed demand dynamics and thus a false peak in coal.

In my backyard, Appalachian Ohio coal "peaked" a while back bc/ of strict regulations on sulfur. Now that coal has increased in value, old mines that had been boarded up for 25 years are reopening and Ohio has increased coal production by over 10% in the last 3 years. It is now economic to mine the dirty coal, and just spend more on scrubbing.

http://www.redorbit.com/news/entertainment/472879/mining_rebounds_in_ohi...

Heinberg says: "all nations with significant coal resources (excepting India and Australia) that have made the effort to update their reserves estimates have reported substantial downward resource revisions."

And then lists several countries that have had to downgrade coal reserves substantially. Note, however, none of those are the top 6 countries that possess 90% of the world's coal reserves.

Heinberg claims that US coal production peaked in 1998. This is already old data. There was indeed a peak in 1998, but US coal production surpassed the '98 peak in 2005, and then 2006 topped 2005.

http://www.commodities-now.com/content/market-news/market-news-200701094...

I think we'll have to read the Energy Watch Group's report closely. I hope it doesn't give us a false impression of coal- at least for the US. It is proabably inevitable that we will use coal to help the transition during the backside of the PO slope but this is enormously problematic due to environmental impacts of mining and CO2 production, even if we do scrub out the sulfur and heavy metals.

Hallelujah!!

Thank you the oil drum.

It is a shame it has come to this but Aramco is a secretive bunch.

Here is the cross section from the Ain Dar SPE paper- note the dimensional arrows. Below is the Ain Dar structure from Greg Croft.com. Note the Water oil contact data.

Where are these cross sections on the Northern Anticline??

According to the SPE paper, these graphs show "simulation results on water evolution at the eastern and western flank of Ain Dar".

The first paragraph of the paper states "this paper presents a study on a six-year water management strategy in North Ain Dar". I guesss we can narrow those graphs down to the east and west flanks of the northern part of Ain Dar.

If you look at Figures 3,4 and 5 in the report, the shape of the reservoir and the progress of the flood front topography strongly suggest that we are looking at the top half of the Ain Dar structure you have shown above, which I believe is also known as Fazran.

If everyone is really serious about this...

We need an advanced imaged analyst to look at the thickness of the reservoir through the various hatched vertical lines... compare that to the average thickness recorded (the top of the structure appears to be the thickest to me)... than with some estimate of thickness we can relate that to the distance above the original WOC. Which puts us into position on this structure and tells us how much reservoir remains above us.

Roughly I get about 2.3 ratio of height above oil water contact to reservoir thickness on the West Side.

http://www.gregcroft.com/ghawar.ivnu

This link shows the original OWC for all Ain Dar to be 6430 to 6665 feet subsea. Average net thickness of reservoir is 204 feet. Unfortunately, that is the average for the entire AD structure, not the northern part, so probably not really of much use...

I don't understand your conclusion.

I'm guessing that it basically means the reservoir is 2 parts oil and 3 parts water or 60% depleted ?
a.) Is this correct ?
b.) How does it compare to other fields ?
c.) This would be a 60% depleted based on something like OIP so the real depletion (URR) would be higher say 70% ?

Your going right over my head with half your posts I've very interested in what you have to say but I don't have the expertise to understand your comments much less the data.

If your willing to give a little bit of a tutorial if just in your comments it would be invaluable.

I am sorry but it is hard to understand sometimes what is so hard to understand about stuff you've been doing for 25 years.

The frustrating thing is like with "Twilight" you see misdirected efforts and a lot of time gets wasted and the right questions never get asked.

The SPE has been way too silent on this issue since that is where the expertise lies in forecasting future world production and reserves.

The above cross sections are "slices" across a structure. Aramco says nothing about "where" these slices are on this structure. I provided a picture of this structure.

Now it is interesting that Aramco doesn't tell you where they are- that is so guys like me cannot reverse engineer it.

Because if I knew where they were I can see the water depth on the x-section and I could figure out how much water free reservoir exists above the slice shown. Then I could planimeter that area to get the acreage. Then I could calculate the remaining reserves of that area and compare it to the 13.9 billion barrels claimed by Saleri at this point in time at the 2005 CSIS presentation.

If we accept the original water oil contact is what the greg croft website shows, we see that water oil contact on the 1940 cross section. If we have some relative vertical scale to determine the height of the reservoir above that level, we can place the cross section on the structure. The only relative vertical scale we have is the reservoir thickness, which averages 204'.

Now, let's say that the height above the oil water contact is 2.3 times the thickness at the crest, and let's say the thickness at the crest is 240' (i have a decent reason for this). Then the top of that structure on that Western xsection is 2.3*240= 550' above the original WOC. The original WOC on the West Side is -6430' subsea . So the top of that Western cross section is -5880' ss.

The last contour (the closed tight little one) is -5750' ss. The one beyond it is -6000' ss. So you can get an idea of how much relative area is left uninvaded by water from this.

On second thought maybe I don't want to know.
Ouch ...
The fact that critical information you need is missing is interesting in and of itself. Generally this happens when its not good news. Or is this common in the industry ?

We can only hope they have a lot of bypassed oil they can hit.
But with the way they did the water drive I doubt it.

So I really am puzzled how they are able to keep production rates up now ?

All I can guess is that they really used to have a lot of spare capacity thats been brought online recently. Otherwise I'd say production should have started declining overall two years ago. I don't quite understand how they have produced what they have to date much less more except that they did have close to 2mbpd of spare capacity in 2002-2004.

Agreed. A cursory reading suggests this is important stuff.

I wonder if HO would explain/ elaborate on this material in laymen terms?

I have a question too. Can you (Fractional_Flow) or anyone else offer insight on what the variable being plotted is in this picture of 'Ain Dar and Shedgum:

Click to get it bigger. This is from Figure 12 of Hussein et al. International Petroleum Technology Conference Paper #10395, November 2005.

The variable appears to go from 0 (blue) to 1500.0 (red), so it's hard to see how it can be water saturation. The paper itself doesn't say (making only a casual passing reference to this figure being a visualization of a full field model of 'Ain Dar and Shedgum).

I think the label might be "PermK MD", suggesting this is a visualization of the permeability in millidarcies. Presumably, this is permeability at the top of the reservoir and the red (and black) areas are the famous SuperK channels? Greg Croft says average K of 619 MD for 'Ain Dar, and 639 MD for Shedgum, so the greenish color would be about right for most of it. Can anyone confirm this interpretation?

After staring at the bumps for a while, here's where I think those cross sections are (roughly, no way to be exact):

It seems to me the implication is that there was only a thin (1-2 simulation layers) layer of moderately dry (w_c ~ 0.2) oil left throughout the crest of North Ain Dar as of simulated year 2004. Given that in 1990, there were still 9-11 layers under most of the crest, it seems like the flood (green) moves up a layer about every 1.5 years. If we assume that "2004" is "2004.0", this implies that there being no red left would have occurred over the mid 2005 - end 2006 timeframe.

Which would be interesting timing:

North 'Ain Dar is not big enough (about 500kbpd in 2003) for even a large change of production to explain this. If one could make the case that the same thing was happening in the same general timeframe across all of 'Ain Dar/Shedgum, however, it would get even more interesting.

Thanks stuart.

Interesting graphic.

Looks like Perm MD on the label to me as well.

Could be any layer in the model.

Euan posted this graph yesterday:

It is from Energy Files, and is supposedly based on the Saudis' own projections. If I'm reading it correctly...even the Saudis think Ghawar is at peak.

And look at how they predict they can increase production. "Other," "Yet to find," etc. Unless the yet to find includes another Ghawar, it ain't looking good.

Great graphic man. Thanks to you and Euan I missed it.

OK so Abqaiq and Ghawar together start at 5.5 MMBOPD in 2010 and end up at 1 mmBOPD in 2050.

So

D= -1/t ln(qi/qf)= -1/40 * ln (5.5/1)= -4.3%/year (note this is half the rate we have heard)

(exponential decline rate).

and
Np= (qi-qf)*365/D

Np= (5.5-1.0)*365 (1e06)/.043

Np= 38 Bbbls (cumulative prod to 2050).

Saleri said Ghawar was 48% depleted at 55 billion barrels (1/1/04) ... leaving 60 Bbbls for Ghawar alone (not including Abqaiq.

That graphic also shows Safaniya, the world's largest offshore field, in substantial decline. This is as significant as Cantarell.

Yeah. That's pretty interesting in light of the fact that in 2004, it was only 26% depleted:

Oh, what a tangled web we weave...

That must be why they still think they can raise production from Safaniya....

Does any one else notice that the difference between Other Ghawar and the top of Shedgum is close to 4 MMBOPD???

I thought Haradh was 900,000 BOPD and the rest is Uthmaniyah????

I direct your attention to

SPE 98847 Water Production Management Strategy in North Uthmaniyah Area, Saudi Arabia.

Link to SPE 98847 is http://www.spe.org/elibinfo/eLibrary_Papers/spe/2006/06EURO/SPE-98847-MS... but needs to paid for.

Intersting points from the summary:

- North Uthmaniyah water cut averaged 46% over the 5 years 2001-2006

Water Management Practices to minimise water production included:
- Cyclic Production Modes (guessing this means "resting" wells
- Rigless water shut-offs (same thing was practised at Ain Dar)
- Horizontal side-tracks (same as Ain Dar)
- Partial Penetrated wells (no idea what this means)

In SPE 93439 (http://freeoil.1111mb.com/spe/spe93439.pdf) relating to northern Ain Dar, Figure 1 shows water cut for what I asume to be the entire Ain Dar field at 42%. Figure 2 shows huge water cut of 80% in the northern part of the Ain Dar field.

So we have two SPE papers (northern Ain Dar and northern Uthmaniyah) showing water cuts at an average 44%. Shedgum lies between these two areas, would it not be reasonable to assume a similar water cut level there?

On page 18 of Saleri's 2005 paper a water cut of 36% is claimed for the Ain Dar / Shedgum area - this implies a water cut of only 28% at Shedgum. Shedgum shares almost exactly the same reservoir properties as Ain Dar, and has been in production for the same amount of time, it therefore seems reasonable to assume that water cut would be at about the same level....

SPE 98847
http://freeoil.1111mb.com/spe/spe93439.pdf

F_F, For AD/S at 2MMBOPD, in your best judgement how long until all wells breakthrough? Does this coorelate with massive water separation projects to come online?

I think partial penetration means they did not fully penetrate the completion with the common charge. Its say half.

My understanding is that completion is done generally with and explosive charge that blows "stuff" into the end cap on the well opening it up. So partial would mean you a putting less holes than normal in the completion. So its a way to choke the well at the source. Later I assume when you know the water situation you can go back and re-complete the best producers.

I want to just add this does not sound like a longterm approach but it would be used until they collect enough data to decide which wells to fully complete. After a point you are better off using standard choking approaches.

It would be a partial explanation for fields coming online then reaching full production several months later since its not brought to full production until after they collect data using the partially completed wells. I'd guess the big thing they are looking for is water flow through fractures which is probably tough if not impossible to model.

Anyway sounds like a sensible approach.

Hi Memmel,

Partial Penetration simply means not drilling all the way through the reservoir (because the water is at the bottom). The other process you mention is "perforation", which goes through the sides, not the end. This is illustrated here...

http://www.glossary.oilfield.slb.com/Display.cfm?Term=perforation

http://www.glossary.oilfield.slb.com/DisplayImage.cfm?ID=510

The total reserves under this curve are interesting.

2012-2020 14 Million a day for 8 years 41 Bbbls

2020-2050 14 declined to 5 over 30 96 Bbbls

Total 2012 to 2050 137 Bblbs

Hey FF, email me at the eds box if you can...
PG

Sorry I can't join in, cos I get out of prison tomorrow and got to pack my things.

Would just point out that 137 billion is high - but not outrageous. Especially if spun out over a longer period. (and I'm aware there is the 2007-2012 bit to add)

KSA had produced 116 billion to end of 2005.

NGL is a natural part of any petroleum system - valuable liquids - with production growing rapidly world wide.

I think this projection is over-optimistic and I believe Michael Smith does too. But I also think it provides a counterbalance to the notion that Saudi production peaked in 2005 and is "crashing".

A couple of layman observations:

It appears they have no new major fields except Khurais and are counting on NGL(from the graph) to maintain a production(capacity) plateau starting around 2010.

By this graph they have *capacity* of around 11mmbpd today, and will ramp to ~13mmbpd by 2009 an then plateau at ~14mmbpd PEAK...ramping off starting at around 2018 into permanent relentless decline.

But with there admitted depletion at around 4% - they lose around 880,000 bpd/yr (starting at stated capacity of 11mmbpd) Which means they need to bring online 1.76mmbpd (flat 880mbpd/y for simplicity) to offset declines by 2009 and an addtional 2mmbpd to increase production.

That is is 3.76mmbpd in less than 2 years, but I can't any reference that suggests they can come even close to this.

I found: (from April 2006 Petroleum review Admittedly maybe this isn't the best source, I don't know)

In 2007
Abu Hadriyak 500mbpd
Khurianiyah NGLs 300mbpd

In 2008
Shaybah onshore 300mbpd
Nuayyln super light onshore 100mbpd
Hawlyah NGLs onshore 370mbpd

In 2009:
Khurais 1.2mmbpd

This gives a total of 2.77mmbpd. I don't think I missed any(in this report), but if I did obviously it would change the outcome.

So with a modest 4% depletion of existing fields, they still come up 1 mmbpd short of their target. I included 2009 production, but not 2009 depletion, if I do that, they are almost 2mmbpd short at the end of 2009.

And I am sure I shouldn't have used 4% since they claimed that was the compensated depletion rate (which means to the layman that they are drilling like mad in the older fields to keep production too fast). But I guess if you are even more optimistic you could use say 2%, but which put new oil needs at ~2.66mmbpd at the end of 2009, which is pretty much break even.

So no matter how I cut it, with the assumption that they can really produce what is on the graph at this moment (~11mbpd), I can't see them increasing...until after 2009, but then by the graph even then are saying they enter peak/plateau before decline.

Anyways, I am no expert. But from my point of view and analysis, it looks as if based on projects and projections, they are at peak NOW and can do no better without a 4mmbpd field opening in 2010 (which maybe there is for all I know). I just know this looks ugly.

Be gentle...with this little bit of digging and calculations I can see how easy it is to possibly miss something important when the major contributors do their magic, so kudos to them for sticking with it.

I guess the input I would like is - am I far off - doesn't this appear to be what the data suggests?

You can't use LNG as a replacement for Light Sweet Crude.(You can as a revenue source, but that doesn't do the US any good.) Also, there appears to be a lot of 'Hope To Find', gobs and gobs of optimistic outlook and anticipation of something the size of Canterell hiding out there. I guess that's why they refer to this place as the "magical kingdom".

Exc Point Cid-

We need validation of this graphic--- The world needs to know the original source.

Here's what Euan said about it:

This chart from Michael Smith at Energy Files is based on Saudi prognosis of their own capacity (not a production forecast).

Energy Files is here:

http://www.energyfiles.com/index.html

I think you have to pay to access their data, but they do offer a freebie graph that looks like the one Euan posted, only without the source breakdown.

Michael Smith apparently reads TOD, so maybe he'll weigh in.

Leanan, or anyone else who might remember,

Do you remember an article/report in the last couple weeks from one of the major petroleum trackers (EIA/IEA, I think), where they show demand/supply for 2007. The KEY point I was trying to find, was it showed a shortage in 4Q2007.

I have tried searching, but I must be using the wrong terms or I key points I remember must be wrong.

If I am not hallucinating, I would appreciate a pointer. Trying to put together a summary for some local politicians.

TIA

hey peak TO.. the iea has a demand graph forward to Q4 2007:


...however their supply graph only covers until Q4 2006.

My high level pond model predicts a new price peak fall of 2007. And it predicted the recent increase that no one else did. The summer peak is of course constant from before peak oil.

Its pretty high level it simply says if we are at peak oil we will see three price peaks each year. This will last until storage cannot be filled while we pump at maximum capacity year around. Note even now we are not pumping flat out 24/7 and we won't until all buyers cannot fill their storage. You still get price peaks and valleys but what happens is the winners get to fill storage first and when they slack off and price drops a bit the losers get a chance. Sort of a round robin effect. From here you see prices go to almost a plateau till someone drops out completely and the three peaks reform again a higher base until the remaining players can no longer fill storage.

Needless to say the chances we will fill the SPR this summer is nil. I think KSA is trying to get into this stable but high price region but I can't see how the market will oblige since its in hoarding mode. We should see a lot more private tank storage constructed over the next few years once the market catches on. The real winner will be companies with foresight to build out enough storage to buy at the valleys.

The Presentations and Articles on the Energy files site are free also, and one of the presentations contains this field-by-field breakdown (although it looks like this version has been updated with more recent data).

This is really one of the best presentations I have seen on Peak Oil, in fact...
Filling the Oil Supply Gap

CW
Global peak: 2007 - 2010
Global decline rate, Post peak: 2%
Economic response: Severe global recession, ~5 years, then slow recovery

Sorry, did not see all this until today. The chart for Saudi production is not based on anything Saudi Aramco has said or admits to except its growth plans for the next 5 or so years. It is based on historic output, the projects they have announced (assuming they will go ahead and roughly on time), and my general perception of the all fields (inlcuding all liquids) and future potential taking into account the geology of the region. It is just as likely to be wrong as everyone else - it is a best guess. Also I think over the next two or three years projects will slip (i.e. investment will not be at a maximum and production will be restricted) so perhaps in truth the top of the curve will be slightly lower and shifted a year or two into the future.

I was also wondering how they price NGLS?

i am begining to think that the saudi's believe they are somehow "endowed" with unlimited reserves. not unlike some of our fellow amerikuns who seem to think that we have a "right" to cheap energy. i think they call it providence.

Also consider from previous posts they seem to like to count oil behind the water front and reserves. Not that this is wrong per-se but the production rate will be much lower for this oil.

Next as far as I know universally the use of horizontal wells of all kinds has lead to steeper decline rates than fields correctly produced with verticals. I've seen posts where fields drilled with vertical wells where damaged or horizontals where needed to produce the field. But the production profiles I've seen for horizontal wells all have steeper decline rates. What they do is give a much higher peak production so even if they recover more oil its offset by being able to producer faster with steeper declines.
The overall result is to generally sharpen the curve its not clear to me you get higher URR's.

In any case the relationship is not a simple.

The counter argument that seems to be the strongest is both Russia and I think China are primarily vertical wells with high water cuts and they seem to have the most stable production with gentle decline rates. This gives you a lot more time to work on remediation to offset decline.
In fact I think the best way to produce a field is to use vertical wells until they no longer work and redevelop with advanced wells once the field is closer to being depleted.
This gives you the best placement of the horizontal wells since you can use all the knowledge gained from the verticals. In a sense this is how Ghawar seems to have been produced it does however give you in a way a false period of high production and greater declines.

Which brings you back full circle the advanced wells take a lot longer to drill it seems and your limited by above ground factors on how fast you can compensate for fairly large changes in production rate once a advanced well waters out.

This is why I think a lot of people believe its a above ground problem but in a sense the problem is already in set once you go with advanced extraction. Your running the treadmill a lot faster and the speed at which you can deploy technology is limited by complexity problems.

Finally I think the results presented in this thread are at least slightly optimistic since problems with individual advanced wells have a greater impact. And KSA is not quite right to compare there water cut with others the technology is different and the effects are different. Even a 30% water cut is bad news for advanced wells since decline will go a lot faster soon.

This does explain in a way why they cut the one production graph after thirty years at a 20% water cut. You don't want to see the second half.