The Saudis say they can ramp up production to 12.5 million barrels a day. But a field-by-field breakdown obtained by BusinessWeek shows that's not likely
It claims Ghawar will peak in 2009:
Quote:
One dramatic part of the data concerns a site called Ghawar, which has been the kingdom's workhorse field for decades. It shows the field producing 5.4 million barrels a day next year, but the volume then falling off rapidly, to 4.475 million daily barrels in 2013. "That's why Khurais is so important—to make up for that decrease," said the oil industry executive who released the data.
_________________ "The problems of today will not be solved by the same thinking that produced the problems in the first place." - Albert Einstein
Posted: Thu Jul 10, 2008 12:37 pm Post subject: Re: Saudi Oil: A Crude Awakening on Supply?
Quote:
Saudi Arabia's ability to calm panicky oil markets has been waning for years. With oil prices doubling since last summer, to more than $140 a barrel, Saudi King Abdullah on June 22 convened an extraordinary meeting (BusinessWeek.com, 6/22/0 of OPEC members, international oil industry CEOs, and foreign leaders in an effort to calm the markets. The kingdom's message was clear: Saudi fields can pump oil to market quickly, if demand warrants.
However, it appears that for at least the next five years, and possibly longer, the Saudis are likely to produce less crude than promised, according to fresh data on the kingdom's oil fields obtained July 9 by BusinessWeek. Saudi officials have said they would increase production to 12.5 million barrels a day next year, from the current 9.5 million barrels a day, and could even ramp up to as much as 15 million barrels a day if the market demanded it. As proof to a skeptical audience, the normally highly secretive Saudis were a bit more more open, escorting journalists on a visit to their new Al Khurais field (BusinessWeek.com, 6/23/0, east of Riyadh, and disclosing some field data.
Oil companies want in
But the detailed document, obtained from a person with access to Saudi oil officials, suggests that Saudi Aramco will be limited to sustained production of just 12 million barrels a day in 2010, and will be able to maintain that volume only for short, temporary periods such as emergencies. Then it will scale back to a sustainable production level of about 10.4 million barrels a day, according to the data. BusinessWeek obtained a field-by-field breakdown of estimated Saudi oil production from 2009 through 2013. It was provided by an oil industry executive who said he had confirmed it with a ranking Saudi energy official who has access to the field data. The executive, who has proven reliable over several years of reporting interaction, provided the data on condition of anonymity to protect his access to the kingdom and the identity of the inside contact who confirmed the information.
Joined: Sep 16, 2004 Posts: 4279 Location: Southwest WI
Posted: Fri Jul 11, 2008 7:08 pm Post subject: Re: Saudi Oil: A Crude Awakening on Supply?
This is major news, right? I mean most of us thought Ghawar had already peak or was peaking now or close, but to read it Business Week... I'm pumped now. The farking wheels are coming off this bus. _________________ "Oil is going up because we use too much oil, and the capacity to replace reserves is dwindling"
-President Bush 11/07/07
Joined: Apr 06, 2006 Posts: 2956 Location: 3 miles NW of Champoeg, Republic of Cascadia
Posted: Fri Jul 11, 2008 7:14 pm Post subject: Re: Saudi Oil: A Crude Awakening on Supply?
Maybe Simmons is the insider referred to in the story?
Agreed, amazing to see this in BW. Wonder how it will play out on the Beltway etc. _________________ Cogito, ergo non satis bibivi
I'm just gonna find a cash machine.
As we see, it's not hard to find cases of manipulation in the futures market, whether it is for oil, propane, or natural gas. Still, my position is that it is simply the enormous amount of money going into the markets that is distorting the price structure against natural supply and demand. Here I will correct a mistake in my last column. It was a big one, though not entirely mine.
I mentioned that because oil prices are so high, we were witnessing demand destruction of around 525,000 barrels of oil a day in this country. That figure came from the Energy Information Administration. It was wrong; in revising that figure, the EIA now reports U.S. demand for oil has dropped 863,000 barrels per day since April.
Now we can start to get a handle on how oil prices are already drastically reducing demand. We started this year with oil around $100 a barrel and witnessed demand destruction of 2.5%, or approximately 525,000 barrels a day. But, as oil moved past $110 a barrel, demand destruction jumped 60%, to 863,000 barrels per day. This is important; everyone loves to argue that even if our demand is down, China's and India's insatiable quest for ever more oil equals or outstrips our demand reduction, but that's not so. The Oil Daily published an article on July 7, headlined "Data Shows Oil Supply Outrunning Demand." Included in that article is the Asian oil demand charts, which show that from China and India to Bangladesh and Vietnam, this year's entire increase in total Asian oil demand will amount to 582,000 more barrels of oil a day—far less than we've cut our energy consumption. It should also be noted that not all of Asia's oil is imported; much of China's is homegrown. This is why, when OPEC says they would pump more oil if any of their customers demanded it, it's a believable position.
One dramatic part of the data concerns a site called Ghawar, which has been the kingdom's workhorse field for decades. It shows the field producing 5.4 million barrels a day next year, but the volume then falling off rapidly, to 4.475 million daily barrels in 2013. "That's why Khurais is so important—to make up for that decrease," said the oil industry executive who released the data.
Ok this is stretching the reach of my meager math skills so someone come up with more accurate data when they can.
2009: 5.4 million
2013: 4.475 million
a decrease of 925,000 barrels per day or an overall drop of 17.1% over the course of 4 years (2010-2013). That would be a year over year decrease of how much?
Something like 4%...? sounds like an optimistic estimate to me.
Joined: Apr 06, 2006 Posts: 2956 Location: 3 miles NW of Champoeg, Republic of Cascadia
Posted: Sat Jul 12, 2008 6:16 am Post subject: Re: Saudi Oil: A Crude Awakening on Supply?
virgincrude wrote:
From the same source:
High Oil Prices: Hype's Impact
That was a response to another nicely done piece, In Praise of Oil Speculation. _________________ Cogito, ergo non satis bibivi
I'm just gonna find a cash machine.
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of OPEC members, international oil industry CEOs, and foreign leaders in an effort to calm the markets. The kingdom's message was clear: Saudi fields can pump oil to market quickly, if demand warrants.
