<Why UK Natural Gas Prices Will Move North of 100p/Therm This Winter The Oil Drum DrumBeat: June 25, 2008>

129 comments on Nigeria – The Significance of the Bonga Offshore Oil Platform Attack

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memmel on June 24, 2008 - 9:10pm Permalink | Subthread | Parent | Comments top

To put this in perspective the GDP of the state of Calififornia is 1.7 Trillion.

http://en.wikipedia.org/wiki/Economy_of_California

Per capita personal income was $38,956

Population of California is 36 million.

http://quickfacts.census.gov/qfd/states/06000.html

Total Saudi GDP is 1.1 trillion.
http://en.wikipedia.org/wiki/Economy_of_Saudi_Arabia

Per Capita oil usage for California is 18 barrels a year or 1.7 mbpd.

http://www.statemaster.com/graph/ene_pet_con_percap-energy-oil-consumpti...

If I was doing the economic planning for the Kingdom I would want the oil prices to at least double or triple over the current prices. And if I was also aware of the mature nature of the oil fields and rising consumption I would be shooting for a final price 5-10 times the current price with a diversified petrochemical industry using the majority of the remaining oil and NG as feedstocks with fertilizer and plastics being major exports. The assumption is that production from Ghawar and the other old fields will pretty much collapse over the coming few years leaving Saudi with long term production levels between 6-3 mbpd and internal consumption around 3-4 mbd and a population between 40-60 million.

Outside of the price projection I'm using to figure out how much money Saudi needs to inject in its economy to bootstrap a more general one based on value add finished products and probably light manufacturing the Saudi's are actually taking all the right steps to reach the goal of a oil centric but diversified economy. My expectation for production may be pessimistic but they have to even with the current production estimates see oil at least double in price to transform their economy. Triple is quite reasonable. 5-10 times is needed if Ghawar is potentially on the verge of collapse in production because of water problems with horizontal wells.

Also one would think the goal is a much higher per capita income approaching 100k with a large slave work force. Take your pick on projections but its a safe bet that KSA will never increase production to encourage a lower world oil price.

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karlof1 on June 25, 2008 - 3:25am Permalink | Subthread | Parent | Comments top

I agree with your assessment, Memmel. As shown by my post, just trying to get basic figures to inform others isn't easy. The news bit by al-Jazerra posted at Juan Cole's blog linked above I found very interesting, which I tried to set forth in my comment at his site. Too many people are ignorant of the very complex challenges Saudis face, internally and externally, with the very rapid population growth being #1, IMO. Their whole oil and gas biz should be manned and managed indigenously, and its armed forces should be the equivalent of Israel, but Saudi fails on both accounts. Include food security, and the Saudis have a very steep hill to climb. Then as you mention, there's the need to produce value-added petrochmeical products, and to prepare for the day when the feedstocks slow to a drip. Ideally, there'd be a dynamic allowing the Middle Eastern countries to solve their shared problems in a cooperative manner. The Gulf Cooperation Council is the nascent vehicle providing that dynamic, and it now includes Iran, but they have a long road ahead and need to start by eliminating the Imperial presence and its divisive influence ASAP. Just that sort of alliance is the US and UK's worst scenario. The GCC should bury the Carter Doctrine in a very explicit fashion. Abdullah is probably the most independent Saudi King to date. Time will tell how erudite he is.

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129 comments on Nigeria – The Significance of the Bonga Offshore Oil Platform Attack

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