The Oil Drum

Megaproject contribution from 2005 to 2013, the decline rate is 4%/year with a linear transition period of 6 years starting in 2005. Historical crude oil + condensate production from the EIA.

Khurais. It is the best of fields. It is the worst of fields. It is another chip off the old block, destined to prolong Saudi Arabia's dominance as an oil producer. It is a chink in the armor of the Saudi Oil Miracle, a symbol of a lesser future. Do tell, which is it? Amidst a lot of speculation, there are a few knowns. The Khurais Megaproject is the largest integrated development project in Saudi Aramco history. Slated for completion at the end of 2009, it includes the expansion of oil production in the Khurais, Abu Jifan, and Mazalij fields. These fields lie approximately midway between Riyadh and the Ghawar oil field, and sea water for injection will be piped in from the Arabian Gulf near Dharahan. The completed project is stated to have a capacity of 1.2 million barrels of oil per day. This article will present an early look at the Khurais development using satellite images and a review the scant data available for Khurais in an attempt to assess its prospects in light of much skepticism.

New liquids capacity with first oil in each year as estimated from Petroleum Review megaproject reports (last available estimate in each case), and interim estimates from Wikipedia table as of December 10th, 2007. Error bars on Petroleum Review figures are as documented in Is the Decline of Base Production Accelerating.

New liquids capacity with first oil in 2003 as estimated from Petroleum Review MegaProject report in Jan 2004, and estimate from Wikipedia table as of November 25th, 2007.

Oil production is highly pyramidal and almost half of the world production is coming from less than 3% of the total number of oilfields. Therefore, tracking large oil projects seems like a good approach and it is generally easy to gather good information about a few hundreds of important projects. The most notorious studies are from Chris Skrebowski (ODAC) that has tracked megaprojects since 2004 (see references at the bottom of this post). Initially, only projects that could produce 100 kbpd and more were included. In 2007, the last update included also 40,000 bpd and more. However, forecasted increases in new production capacity have been overly optimistic. So what went wrong? They are many possible causes: demand destruction due to high prices, significant project delays, withheld capacity, larger decline of the resource base, etc..  Having a good estimate of the decline rate of the resource base (Most estimates are ranging between 2 and 6%/year) is fundamental for the precision of supply forecasts derived from megaproject database (see Rembrandt's recent post). Stuart is also looking at this problem here.

Average percentage change annually in global base production (prior to new capacity enumerated in Skrebowski megaproject lists). See text for details. Graph is not zero-scaled. Click to enlarge.

This is a guest post by the ace.

Being an oil and gas investor, I have a keen interest in forecast world oil production and its impact on oil prices and the global economy. After reading Khebab's story about many different production forecasts, I decided to build my own model using Chris Skrebowski's megaprojects (each project > 50,000 bpd) database and some decline rate assumptions. The annual decline rates vary from 4% for new fields, 6% for mature field workovers, 7% for mature fields to 14% (for specific field decline rates eg Cantarell). The model has 95 new megaprojects/workovers and 120 existing fields.

In recent posts I have talked about the major oilfield in Saudi Arabia that is closest to exhaustion. Perhaps it is now time to move to their oilfield of the future. Khurais. As we look to where the oil is going to come from tomorrow, there have been only very few places where production levels above 1 mbd have been projected. In fact a quick skim through Chris Skrebowski's Megaproject list (pdf file) shows that production of this level is going to get rather scarce. Counting only production above quarter of a million bd, in 2006 he has Haradh coming on line at 300,000 bd (it is), and the Azeri-Chirag-Gunashli (ACG) Phase 2 coming on stream in Azerbaijan at 300,000 bd. In 2007 there will be the Abu Hadriyah, Khursaniyah. Fadhili complex in KSA at 500,000 bd; The Khursaniyah NGL's at 300,000 bd; and another 300,000 bd from the ACG project. In 2008 there will be the Hawiyah NGL's at 370,000 bd; the Shaybah phase 2 at 300,000 bd or more; and Kashagan at 450,000 bd from Kazakhstan. In 2009 there will be Khurais at 1,200,000 bd. In 2010 there will be the Al-Shaheen expansion in Qatar at 300,000 bd; the combined Kushk-Hosseineh field in Iran at 300,000 bd; the Kuwaiti expansion at 450,000 bd; and the Kashagan Phase 2 at 450,000 bd. Looking further out there is Kashagan Phase 3 (300,000 bd), and Manifa (700,000 bd in total).

In terms of major developments Khurais stands out as being considerably bigger than the rest.

After yesterday's discussion of on-stream production growth (or the lack thereof), it would seem apropos that we follow that up with a discussion of the existing largest fields and their decline rates.

Greyzone and others worked a while back to assemble as much data as they could about the largest producing oil fields, their peak year, and whether or not they were in decline, and if so, the decline rate.

I thought I'd repost this as a discussion point, but also to accomplish two other goals: 1) can we expand this to the top 50 fields easily? is that a worthwhile exercise? and 2) is there any more data out there that can fill in the blanks (note that most of the missing data is from SA) that are present?

Here's a link to the data, and here's a link to the original thread that started this all.