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49 comments on Another look at the Kingdom of Saudi Arabia

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JoulesBurn on January 24, 2008 - 4:42pm Permalink | Subthread | Parent | Comments top

There is this document:

Saudi Arabia’s Strategic Energy Initiative:Safeguarding Against Supply Disruptions

by the Saudi National Security Assessment Project, a think-tank of some sort in Riyadh. It has these figures:

Expedited Production Schedule

  • Abu Safah & Qatif: Upgrade completed late 2004 at cost of $4 billion.
    • In January 2004: 300,000 b/d.
    • In March 2005: produced additional 500,000 b/d (for total of
    800,000 b/d).
  • Haradh: Expansion estimated to cost $1.5 billion.*
    • In January 2004: 170,000 b/d.
    • April 2006: 300,000 b/d came on stream.
  • Khursaniyah: $4 billion to June 2007.*
    • In January 2004: 100,000 b/d.
    • By June 2007 to reach 500,000 b/d.
  • Shaybah: Expansion estimated to cost $1.5 billion.*
    • In January 2004: 500,000 b/d.
    • By April 2008: 300,000 b/d will come on stream.
  • Nuayyim: $350 million expansion project has begun.*
    • In January 2004: not online.
    • By Feb 2009: will increase to 100,000 million b/d.
  • Khoreis: $6 billion expansion project has begun.*
    • In January 2004: 150,000 b/d.
    • By March 2009: expected to increase to 1.1 million b/d.

Now, I don't know what it means that Haradh was producing 170,000 BPD in 2004. I know that the HaradhIII area was not producing that. So, does that mean that Haradh I and II, despite having 600,000 BPD "capacity" were only churning out 170k? Or, perhaps Haradh III had a "capacity" of that, giving a whole new meaning to that term.

It's only numbers.

*According to one apocryphal tale, an American population expert went to Saudi Arabia to take a census. He called on King Abdul Aziz al Saud (Ibn Saud), who told him: "You're wasting your time. There are 7 million people here." With apologies, the American said there could not be more than 3 million. "You're wrong," said the King. "There are at least 6 million." Begging forgiveness for his audacity, the American insisted that surely there were no more than 4 million. At this point the King held out his hand and closed the deal, bazaar-style, saying: "All right, five and a half."

From Time Magazine, 1978

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Heading Out on January 24, 2008 - 4:58pm Permalink | Subthread | Parent | Comments top

Thanks for the list - though I would point out that it was given in 2006, and that the Khursaniyah development that was supposed to be on line last June is now projected for the end of next month, which with the slippage of the other projects, is moving away the potential for increased production. Their target, bear in mind, from that document, was that they would be able to develop a sustained production of 12 mbd this year. The slippage in production that we are now seeing suggests that they will not be able to come up to that number.

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JoulesBurn on January 24, 2008 - 5:15pm Permalink | Subthread | Parent | Comments top

My point is that we don't know what the numbers that they give out mean. So they project 1.2 MBD from Khurais. When they announced that number, they had not done a 3D Seismic survey. Will it ever produce that? Well, maybe not, but it has the "capacity". And capacity always comes in blocks of 100,000 barrels/day, never mind the geology.

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Euan Mearns on January 24, 2008 - 5:21pm Permalink | Subthread | Parent | Comments top


Hi Joules - that's a great find.

Nawaf Obaid is currently the Managing Director of the Saudi National Security Assessment Project, a government consultancy based in Riyadh. He is also the private Security & Energy Advisor to HRH Prince Turki Al Faisal, the Saudi Ambassador to the US.

I can live with this capacity forecast if projects come on time. He is using 7.3% decline of existing fields.

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JoulesBurn on January 24, 2008 - 7:35pm Permalink | Subthread | Parent | Comments top

He is also an author on this 2005 CSIS paper, which may be the one that HO was referring to at top:

http://www.mafhoum.com/press8/237E11.pdf

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ccpo on January 24, 2008 - 11:13pm Permalink | Subthread | Parent | Comments top

This begs a question: If KSA is seeing decline of 7.3, how can world decline be 4.5, a la CERA? Curiouser and curiouser...

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Euan Mearns on January 25, 2008 - 4:15am Permalink | Subthread | Parent | Comments top

CERA aggregate decline of 4.5% is made up of higher decline in mature assets combined with no decline / build up / plateau in new assets. So it is the average of everything and they point out that a large chunk of current global oil production actually comes from new assets - which have not yet started to decline

In KSA the producing assets are by in large pretty old. So in the absence of new projects, the decline rate is a bit higher.

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ccpo on January 25, 2008 - 5:56am Permalink | Subthread | Parent | Comments top

Thanks for that. But the whole issue is that we need new to counteract decline, so... shouldn't we be counting them separately so it's clear how much we really need?

Cheers

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garyp on January 24, 2008 - 5:44pm Permalink | Subthread | Parent | Comments top

Found it.

The 170,000 is gas condensate, not the Haradh I, II and III oil fields tranches. Still interesting numbers.

http://www.hydrocarbons-technology.com/projects/haradh/

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JoulesBurn on January 24, 2008 - 6:04pm Permalink | Subthread | Parent | Comments top

Phew! Thanks Gary.

It's amazing that the Haradh Gas Plant was operating exactly at capacity in 2004. I hope they stopped drilling gas wells.

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garyp on January 24, 2008 - 6:15pm Permalink | Subthread | Parent | Comments top

Yeeeesssss.
[strokes imaginary beard]

Somehow I doubt the field is producing exactly to the capacity of the plant. Seems more likely the one transposed to the other in someone's totalling up. Still this is gas produced from other reservoir layers of Ghawar, not the Arab-D with the oil which we all know and obsess over.

If Saudi reserves numbers are 'the most the fields ever held', are Saudi production numbers similarly 'the best we could do if everything worked right, all at the same time'? It would have a nice symmetry in approach and explain the extreme numbers quoted...

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JoulesBurn on January 24, 2008 - 7:10pm Permalink | Subthread | Parent | Comments top

Now you're getting it. Production equals Capacity. It's easy.

Now you're ready for the bonus round. Read the following document and try to reconcile all the contradictions. Good luck, and thanks for playing.

http://www.entrepreneur.com/tradejournals/article/169325389_1.html

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