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Graeme
Fission
Joined: Mar 04, 2005
Posts: 2638
Location: New Zealand
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 Posted: Fri Jun 20, 2008 6:58 pm Post subject: Saudi Arabia's Khurais Oilfield to Start Next Year |
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Saudi Arabia's Khurais Oilfield to Start Next Year
| Quote: | Saudi Arabia expects work to expand the Khurais oil field to be completed by mid-2009, boosting the country's production capacity by 1.2 million barrels a day, the state-run Saudi Press Agency reported.
Oil consumers and producers are due to meet June 22 in Jeddah, Saudi Arabia, to discuss how to stabilize soaring crude prices. The Saudi government will organize a trip to the Khurais field during the summit, the news service said, describing the project as ``one of the biggest'' for the global oil industry.
Khurais is part of Saudi Arabia's plan to expand total production capacity to 12.5 million barrels a day by end 2009, according to Riyadh-based SPA. The kingdom is the world's biggest crude exporter. |
bloomberg
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Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us. |
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Hogan
Light Sweet Crude
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Joined: Oct 25, 2004
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| Posted: Sat Jun 21, 2008 12:33 am Post subject: Re: Saudi Arabia's Khurais Oilfield to Start Next Year |
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And Ghawar, Saudi Arabia's largest and most important oil field, is in terminal decline:
link |
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Graeme
Fission
Joined: Mar 04, 2005
Posts: 2638
Location: New Zealand
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| Posted: Sat Jun 21, 2008 1:22 am Post subject: Re: Saudi Arabia's Khurais Oilfield to Start Next Year |
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What's Khurais got to do with Ghawar?
_________________
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us. |
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Peleg
Heavy Crude
Joined: May 20, 2008
Posts: 391
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| Posted: Sat Jun 21, 2008 1:43 am Post subject: Re: Saudi Arabia's Khurais Oilfield to Start Next Year |
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| Graeme wrote: | | What's Khurais got to do with Ghawar? |
The reason only the specs are jumping up and down is that thought the story may add some volatilty to the market which they can then extract as a dwindling pay day, every year we need the world to produce over 3 mbpd of new oil to account for what depletion is robbing from us already. That means in just four years we will need to come up with another Saudi Arabia? So now that the graph is clear ghawar is in decline to the tune of a million or so barrels per year, Khurais is already not a solution to the price pressures we have been seeing, and this is long before it ever comes on line. Yes, it is great news.
The even bigger news which is horrible to even think about is that we have peaked. We have yet to see the downturn in the world oil production graph but we know that the four year plateau should not exist in the face of rising demand. Prices have risen to the point where we know now that price alone is not going to bring enough new oil online. And if price won't do it, or can't because costs are rising along with it, we have hit effective peak.
I've watched this issue for almost four years now, that makes me a newb to be sure, but I have never seen it clearer or closer than it is today. Hirsch and Bartlett are trying to get offshore and ANWAR because they are hoping to blunt the liquid fuels shortage that has to develop within the next five years. That is my opinion but I do not see why else they would risk losing their integrity on the issue to advocate for a massive investment in Coal to Liquids, offshore, biofuels, and even tar sands. They know the EROEI of all those things, they know the market impact of biofuels. They must be certain that the utility of liquid fuels during this time frame outweighs all of those other considerations. They must be expecting a complete meltdown of the US economy within no more than 5 to ten years.
By that I mean the engine stops running. Global depression. And with the financial markets sort of leading us down the slope we could see major consequences front loaded so that within two years all of the forces that have been buffering against high oil prices are lost. No more fat 401k's to dip into for that road trip on your anniversary, no more sexy hedge funds to speculate on the direction fo the dollar. The speculation loses because the dollar has to go down like a rock in the next 24 months.
Bernanke can't possibly raise interest rates now and risk tanking the entire house of cards built on mortgages. I am going to go out on the limb and say that either the Fed stays put on interest rates or it lowers them a half a point soon. If they tighten up credit it's all over on the financial side. The problem is there has to be an assumption of growth to inspire loans. If the market sees peak oil now, there is not guarantee of growth not before a very deep recession.
What will they do? I pray for 'they' to have some compassion on the little people and tell everyone the truth. Give people a chance to make some informed decisions about their future. The greed thing was sort of cute when we all guzzled light sweet crude for breakfast. Now it is plain and simply wrong. Come clean Ben, Abdullah, David? it's time to come clean. Tell Exxon that the commmerical with the overconfident actress talkin' 60 million cars and 120 million homes for 60 years is not fooling anyone. We have 120 million vehicles and probably 220 million homes, so that cuts us back down to 30 years-ish. Then consider that the costs of all that energy are rising dramatically and we have to know that we probably cannot afford to get all of that homegrown energy to market at the scale that is needed. I guess if we nuke Colorado maybe a river of glowing oil will erupt out of the Rockies.
It's time to come clean folks. The game is over, it's time to do what is right. |
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Hogan
Light Sweet Crude
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Joined: Oct 25, 2004
Posts: 1298
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| Posted: Sat Jun 21, 2008 2:55 am Post subject: Re: Saudi Arabia's Khurais Oilfield to Start Next Year |
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| Graeme wrote: | | What's Khurais got to do with Ghawar? |
I'm just trying to put everything into perspective. Trying to tell the whole story. We wouldn't want anyone to get the wrong idea that total Saudi oil production output is always increasing. It's too easy to forget about all the declining oil fields. |
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Graeme
Fission
Joined: Mar 04, 2005
Posts: 2638
Location: New Zealand
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| Posted: Sat Jun 21, 2008 4:00 am Post subject: Re: Saudi Arabia's Khurais Oilfield to Start Next Year |
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Just a quick reply to you both.
Drifter, I was hoping to keep the discussion restricted to Kurais. But since you've raised Ghawar, other members should be able to confirm for us that the total production target of 12.5 mbpd that the Saudis are aiming for is achievable. This has been (and still is!) a highly contentious issue.
Peleg, I thank you also for your post. I see that you've seen the CNBC interview of Dr Hirsch, which has greatly affected you. Although Dr Hirsch is a highly respected energy analyst, I think his justifiable warning is just a little alarmist and perhaps frightening to some. He is correct of course when he says that peak oil will occur but he like many others is really not sure when this will occur, and he is just guessing when he predicts that oil will be $500 in 3 to 5 years! My present understanding of the timing of peak oil is based partly on this report and this one - both predict a peak during the next decade. What is also highly debatable are the reserves in Iraq, which are discussed in this thread. They also (like production from SA) may have a bearing on the timing of peak oil. I suspect that these large reserves will have to be confirmed by drilling as others have pointed out. What I'm trying to say is that you should not panic in thinking that our lifestyle will change dramatically. Hirsch said himself that:
| Quote: | | Economic upheaval is not inevitable (“given enough lead-time, the problems are soluble with existing technologies.”) |
Actually this has been my message all along. Khurais is part of this message.
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Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us. |
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seldom_seen
Light Sweet Crude
Joined: Apr 12, 2005
Posts: 1971
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| Posted: Sat Jun 21, 2008 4:17 am Post subject: Re: Saudi Arabia's Khurais Oilfield to Start Next Year |
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| Graeme wrote: | | Although Dr Hirsch is a highly respected energy analyst, I think his justifiable warning is just a little alarmist and perhaps frightening to some. He is correct of course when he says that peak oil will occur but he like many others is really not sure when this will occur, and he is just guessing when he predicts that oil will be $500 in 3 to 5 years! |
Just to put things in perspective. 3 to 5 years ago, oil hitting near 140/barrel by 2008 was basically not fathomable by most people. It would sound outlandish. Here we are. The moonshot to 140 even caught some peak oil aware people by surprise.
We are now moving from oil being basically free, to oil being very expensive and the transition has just started. |
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Hogan
Light Sweet Crude
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Joined: Oct 25, 2004
Posts: 1298
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| Posted: Sat Jun 21, 2008 5:33 am Post subject: Re: Saudi Arabia's Khurais Oilfield to Start Next Year |
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Graeme, I wasn't trying to hijack your thread. Any new oil production is at least a little bit important. If SA would be more transparent in their oil production and reserve figures, I suppose it wouldn't be so controversial. My guess is that they have got something to hide.
Last edited by Hogan on Sat Jun 21, 2008 5:34 am; edited 1 time in total |
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Graeme
Fission
Joined: Mar 04, 2005
Posts: 2638
Location: New Zealand
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| Posted: Sat Jun 21, 2008 5:34 am Post subject: Re: Saudi Arabia's Khurais Oilfield to Start Next Year |
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s_s, You can't be absolutely sure that the price of oil will be $500 in 3 years time. I know it fits in with peak oil theory - once we have reached peak, price will steadily rise, etc.
Firstly, I don't accept that we have reached peak. Secondly, the oil price is unlikely to steadily rise before peak. Thirdly, it is unscientific and illogical to accept without question that the price of oil will steadily increase according to peak oil theory. Fourth, oil price is affected by other factors besides supply/demand - declining dollar, regional variations in consumption, demand destruction, power shortages, political instability, natural disasters, technical difficulties and advances to name a few. So to predict a price of $500 in 3 years is ludricrous.
Can I get this discussion back to Kharias?
_________________
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us. |
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Graeme
Fission
Joined: Mar 04, 2005
Posts: 2638
Location: New Zealand
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| Posted: Sat Jun 21, 2008 5:46 am Post subject: Re: Saudi Arabia's Khurais Oilfield to Start Next Year |
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| Drifter wrote: | | Graeme, I wasn't trying to hijack your thread. Any new oil production is at least a little bit important. If SA would be more transparent in their oil production and reserve figures, I suppose it wouldn't be so controversial. My guess is that they have got something to hide. |
You have every right to say what you like in a society which allows freedom of expression on a PO message board (within COC) and that includes questioning Saudi reserves! So I don't mind and you're not highjacking this thread. That scrutiny will help ensure our collective survival. Do you believe that the Saudis will increase their production? I know that Rocdoc has confidence that they will.
_________________
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us. |
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Hagakure_Leofman
Heavy Crude
Joined: Jan 02, 2008
Posts: 403
Location: out dispatching ronan...
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| Posted: Sat Jun 21, 2008 5:52 am Post subject: Re: Saudi Arabia's Khurais Oilfield to Start Next Year |
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thanks for your post Peleg. Informed and sensible.  |
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Hogan
Light Sweet Crude
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Joined: Oct 25, 2004
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| Posted: Sat Jun 21, 2008 6:06 am Post subject: Re: Saudi Arabia's Khurais Oilfield to Start Next Year |
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| Graeme wrote: | | Do you believe that the Saudis will increase their production? |
Honestly, I have no idea. It appears that recently they are having a hard time just increasing production by 300,000 bpd. |
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rockdoc123
Light Sweet Crude
Joined: May 16, 2005
Posts: 1676
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| Posted: Sat Jun 21, 2008 8:38 am Post subject: Re: Saudi Arabia's Khurais Oilfield to Start Next Year |
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| Quote: | | So now that the graph is clear ghawar is in decline to the tune of a million or so barrels per year, Khurais is already not a solution to the price pressures we have been seeing, and this is long before it ever comes on line. Yes, it is great news. |
that's a pretty bold statement based on 1 years worth of production.
| Code: | | But since you've raised Ghawar, other members should be able to confirm for us that the total production target of 12.5 mbpd that the Saudis are aiming for is achievable. This has been (and still is!) a highly contentious issue. |
we've had that discussion a number of times. If I were better at searching I could find it, but somewhere I show a plot that I made which incorporates a 2% decline (after maintenance and infills) and layers in the projects that Saudi announced a couple of years ago. It puts them almost exactly at 12 MMBPD which I don't think is coincidental. |
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Hogan
Light Sweet Crude
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Joined: Oct 25, 2004
Posts: 1298
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| Posted: Sat Jun 21, 2008 9:26 am Post subject: Re: Saudi Arabia's Khurais Oilfield to Start Next Year |
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| rockdoc123 wrote: | | Quote: | | So now that the graph is clear ghawar is in decline to the tune of a million or so barrels per year, Khurais is already not a solution to the price pressures we have been seeing, and this is long before it ever comes on line. Yes, it is great news. |
that's a pretty bold statement based on 1 years worth of production. |
Are you claiming that Ghawar, overall, is not in decline? |
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Hogan
Light Sweet Crude
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Joined: Oct 25, 2004
Posts: 1298
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| Posted: Sat Jun 21, 2008 9:47 am Post subject: Re: Saudi Arabia's Khurais Oilfield to Start Next Year |
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I would say that total Saudi oil production has been flat since spring of 2004:
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