<The Universal Mining MachineThe Oil DrumThis Week in Petroleum 1-24-08>

49 comments on Another look at the Kingdom of Saudi Arabia

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Euan Mearns on January 24, 2008 - 1:55pm Permalink | Subthread | Parent | Comments top

HO - its important to remember that Saudi still has undrilled areas on the existing supergiants that can be drilled to maintain production that are not recorded in new projects and that at any point in time they might have a number of wells lying fallow - representing reserve capacity.


The latest from the IEA shows that KSA is reversing declines from 2006 - rather effortlessly - without new mega-projects coming on. But the general point you make about delays feeding through to erode future capacity is a valid one.


Forecast numbers are production capacity. Actual production may be lower depending upon demand. Click all charts to enlarge

Here's my forecast from last year. The effect of delaying projects on this will be to lower peak and push peak back - in essence to put Saudi on an undulating extended plateau - an outcome that will suit them very well I believe.

For those who are interested, the presentations given by myself and Stuart at ASPO USA conference in Houston can be downloaded from the ASPO USA web site (chunky pdfs):
Euan
Stuart

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Heading Out on January 24, 2008 - 4:47pm Permalink | Subthread | Parent | Comments top

Thanks, Euan:
In regard to the issue of letting wells lie fallow, as I recall there was some issue earlier last year as to whether they had stopped production from Abqaiq, since it wasn't on one of the production lists. It is a very valid point. And for some of the older fields I would also accept the point about still having undrilled areas to go after, but on the other hand I would bring up the 50 rig number, since the last time that I checked it had been stable for a while, for oil, and the increase in rig count had been put into the natural gas side of the house. So while I concur that they can increase production some, I have increasing doubts that they can make 11 mbd, let alone the higher numbers that they were promising earlier.

I noticed that Leanan had a story at the top of Drumbeat today about the delays in bringing on-line the refineries to take the Manifa oil (and thus that million bd of production) so that they are now not likely going to be available until 2013. That will surely extend the plateau, and removes short-term capability to respond to the market.

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DelusionaL on January 24, 2008 - 10:33pm Permalink | Subthread | Parent | Comments top

"HO-its important to remember that Saudi still has undrilled areas on the existing supergiants that can be drilled to maintain production that are not recorded in new projects and that at any point in time they might have a number of wells lying fallow - representing reserve capacity."

"maintain"

Such a simple word with such important implications.

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elwoodelmore on January 24, 2008 - 10:46pm Permalink | Subthread | Parent | Comments top

dont the saudi's claim they are producing at gravity stable rates ? it would seem that leaving wells sit fallow is necessary to maintain this gravity stable rate. also drilling additional wells would allow an increase in rate, but at a cost of leaving oil in the ground (exceeding their gravity stable rate).

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ccpo on January 25, 2008 - 12:00am Permalink | Subthread | Parent | Comments top

I think an important point to bear in mind is what al Huseini said last October: KSA can maintain 12.5 indefinitely, but going above that will eat into stability of the fields.

I believe him. This is an example of "data" that really is nothing more than belief or trust, but I can think of no reason for Huseini to be lying or blowing smoke. For the reasons stated in above posts, I think they have fields being held backa nd they have areas of existing fields to exploit yet. I expect steady production from the KSA well past 2020. I don't expect any more than 12.5 at any time, except under duress, which may well happen.

Cheers

EDIT: Caveat from further down the thread: http://www.theoildrum.com/node/3534#comment-294844

al Huseini was perhaps no longer at ARAMCO when the info on the increased water was learned. However, given he still has contacts, this may not change his prediction at all.

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elwoodelmore on January 25, 2008 - 7:49am Permalink | Subthread | Parent | Comments top

maybe al huseini was refering to total production, oil and water.

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