The Oil Drum

12 comments on Kenneth Heebner on Ghawar (and other topics...)

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ziggy on September 30, 2007 - 4:04am

One of the interesting comments in the interview was Heebner noting that the CEO Baker Hughes believes Ghawar is declining four to five percent annually. Have any of you out here seen the CEO make/write that statement? I'll make an effort to see if it's in the public record somewhere if indeed someone here also remembers a comment like that. There are not too many executives at top oil or oil service companies that speak in such blunt terms about Ghawar.

As a side comment about Heebner: He's been around for a long time, and has a reputation for being a deep thinking contrarian and in taking big bets, swinging from sector to sector based on his view of where fundamentals are strongest. He's generally viewed with respect, and is generally very well known.

I'm in the finance industry and I can say without a doubt that there's a growing tide of big players that are taking the concept of peak oil seriously, although most have yet to come to terms with the full scope of challenges ahead.

-ziggy

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mcgowanmc on September 30, 2007 - 9:02am

I was wondering the same.

A Baker Hughes link anyone?

Arkansaw of Samuel L Clemens

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GreyZone on September 30, 2007 - 1:08pm

I would expect a CEO of Baker Hughes to not make this sort of error but now I am left wondering if he meant that Ghawar was being depleted at a rate of 4-5% per year? That is a much more reasonable interpretation, as Ace has documented elsewhere that about 5% depletion of the remaining recoverable oil appears to be exactly what KSA has been attempting to do.

"The greatest shortcoming of the human race is our inability to understand the exponential function." -- Dr. Albert Bartlett
Into the Grey Zone

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Paradigm Shifter on September 30, 2007 - 9:07pm

Not really too many comments here on this thread. Unfortunate as Mr. Heebner is offering some good insights on how one can invest over the next several years. SLB is indeed an excellent vehicle to grow one's assets given their global footprint and what is increasingly appearing to be a continous constrained oil supply environment. Ziggy...Andrew Gould, CEO for SLB, delivered a presentation recently (on slb's website)that speaks to these issues in a candid manner. He has previously speculated that the overall decline rate is much higher (i.e. up to 8%).

Andrew Gould Speaks at Howard Weil Energy Conference
Schlumberger Chairman and CEO Andrew Gould addressed the oil and gas investment community at the 33rd Annual Howard Weil Energy Conference on April 4, 2005 in New Orleans, Louisiana, USA. Read the full text of his speech.

To download the complete presentation click here. (3.47 MB PDF)