Playing detective with Saudi production numbers
Posted by Heading Out on December 15, 2005 - 11:42pm
Topic: Supply/Production
Tags: crude oil, production, rig, saudi arabia [list all tags]
Let me point you in the direction of where some of the numbers can be found since this is one of those detective games that can get quite engrossing. I first ran into this topic reading Matt Simmons article on Giant Oilfields (It is a pdf given on Jan 9, 2002). He gave a table on the relative productivity of wells in different countries.

Unfortunately life now gets a bit complicated. For to determine the increase due to the new wells you have to make an assumption as to how much the existing wells have declined, and subtract that revised production from the new years production and divide by the number of wells, to reach the new number for individual oilwell production.
If we take the Saudi numbers, that a rig will drill a conventional well in 21 days, and a MRC well in 40-50 days (from the CSIS meeting) then one can project that a rig can drill somewhere between 6 and 12 wells a year. Matt Simmons said at the Denver meeting that he had thought they were doing about 10 until he went there and found that the number was about 5 wells per rig per year.
Well we can find how many are drilling by going to the Baker Hughes table (excel spreadsheet) where one finds that there were, in November, 37 onshore and 6 offshore rigs drilling. (The numbers are going up). Of these 33 are oil and 10 are drilling for gas).
So this is where we start trying to play a conjectures game. I had calculated, based on production data, that the average well in Saudi Arabia now produces around 4,000 bbd (rounding since I can't immediately find the spreadsheet). So we say that we have 33 rigs drilling for oil. Let us say that they average 7 wells each for the year. Then we have a total of new wells next year in Saudi Arabia of 231 oilwells. If they each produce 4,000 bd, then the total of new oil being produced is 4,000 x 205 (allowing for dry holes) or roughly 820,000 bd of new production.
The problem with this number, as I have posted before, is that this production is very close to the Saudi-reported current field declines (800 kbd the combined increase in production from Qatif and Abu Sa'fah), which makes it hard to see how they can, prior to a number of new rigs arriving, increase their production by the planned amount next year. But this is still based on a couple of assumptions, though not, I believe, unreasonable ones.
The critical numbers are the individual well production numbers, and these appear to be steadily decreasing as the fields that are being exploited get smaller or older.
Incidentally, while I have done this only for the Saudi data, the sites I have cited allow the same exercise for other countries.




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