The Oil Drum

28 comments on Timely delivery is a critical part of a useful fuel supply

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westexas on January 18, 2006 - 3:08pm

From the Newsweek article on SA:

"This state makes plausible the recent Saudi response to its accusers: Oil Minister Ali Al-Naimi said estimates of Saudi "original oil"--the broadest definition of reserves, including proven, probable and possible future reserves--could rise in coming decades to 900 billion barrels, up from 200 billion, due largely to improving recovery technology. And the U.S. Geological Survey's estimate of Saudi Arabia's unexplored reserves is higher than Riyadh's. If anything, the Saudis may be underestimating their reserves. But releasing more detailed numbers won't clarify the reality, or end the controversy."

Talk about a divergence of estimates. The P/Q versus Q method gives Saudi Arabia 80 Gb of remaining recoverable oil reserves. Let's see, 900 Gb is over 1,000% higher than the Hubbert/Deffeyes estimate.

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dissident on January 18, 2006 - 3:39pm

Assuming there are no secret giant oil fields in SA, Ghawar must be on the order of 500 billion barrels. This is just nonsense since Ghawar's size can be reasonably constrained by the initial assessments of the oil majors that developed it. These sorts of claims are an indicator that things are getting bad. Also, "could rise in the coming decades" is hardly proof of reserves or a plausible estimate of the undiscovered oil.

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Stuart Staniford on January 18, 2006 - 4:03pm

This quote from Maugari is very strange. Original oil has got to refer to "Original Oil in Place" - OOIP. The Saudi's have a graph in their "Response to Simmons" presentation showing it growing steadily and linearly since the Saudi takeover to about 700gb IIRC. Add on another 200gb of al-Naimi handwaving and you have 900gb of OOIP. But there is no way this could possibly be considered reserves - that implies 100% recovery rate. Even the most optimistic projections are not claiming more than 60%-70% recover from Saudi Arabia (which would be double the industry average). Is Maugari confused, or deliberately misleading?

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ericy on January 18, 2006 - 5:13pm

How could you possibly recover 100%? Dig shafts into Ghawar and mine the stuff?

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JD on January 18, 2006 - 9:44pm

Mike Lynch floated that idea once. Oil mines were common in the early days of oil. That was Colonel Drake's original plan too. He was going to mine the oil, but then he decided to drill for it instead.
http://www.sjgs.com/history.html

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Heading Out on January 19, 2006 - 1:51pm

There was a thought to do this with some of the shallow oil sands around Bakersfield. The problem comes from the volatiles that would escape and have a quite negative environmental impact.

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Gets IT on January 19, 2006 - 6:48pm

As I understand it, Saudi Arabian official reserves have always run about 2 times what they have numbers on at any given minute.

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AlanfromBigEasy on January 19, 2006 - 8:00am

The thesis of this post is "off the mark". Tinely delivery is NOT a big deal.

"Dipping into reserves" for natural gas in winter SHOULD be a normal part of business. The US transports NG all year long, stockpiling it during seasonal slack demand (spring & fall) for later use during periods of high demand. An entirely porper use of resources (why drill more wells than needed, build bigger pipelines than needed, when it is cheaper to build storage facilities).

I could imagine that Russia once had such a massibe supply/demand imbalance that they could supply dead of winter (a Russian winter at that !) demand with production straight from the well and avoid the cost of building storage facilities. But they have found new markets (at market prices) for that massive surplus and they need to enlarge their storage facilities.

BTW: I am pessimistic about medium & long term convential oil supplies, but much less so about natural gas. The use of NG for liquid transportation fuel will, however, soak up much of the worldwide NG production within a decade, IMO.

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Gets IT on January 19, 2006 - 7:03pm

Occasionally it could be more cost effective to build a larger diameter gas pipeline with a higher allowed operating pressure to gain some storage capacity (line pack) within the pipeline itself, but generally this storage capacity results only from the difference between the line pack of the pipeline at the flowrate needed to satisfy the current average demand vs. the line pack you could get if the pipeline was at maximum allowed pipeline pressure. Of course this type of storage volume is usually only able to supply enough to get you through a 1 week cold snap or so. A lot of gas storage is also done very economically by using previously depleted gas fields in the US NE areas, where the gas is transported in and injected into the depleted wells during summer and taken out during the winter.