Saudia Arabia has 68 Years of Production at 2004 Levels ??

LadyRuby

Can someone help me understand how this chart from the economist, which shows that Saudia Arabia has 68 years of oil reserves at current production, and several others have over 70 years of production at current rates, compares to the work of peak oiler modelers who say peak world production is near? I mean, I understand that the demand will increase over time rather than staying at 2004 levels, but 68, 100+ etc. years of production at current levels? This seems so far off from what some others are saying it's very difficult to make sense of.

http://www.economist.com/markets/displayStory.cfm?story_id=4106257

turmoil · Posted: Thu Jun 23, 2005 8:23 pm Post subject:

three things off the top:

1. they are assuming no growth..which never works
2. they are assuming that we'll get every drop, and maintain current levels of production, which doesn't happen due to pressure loss and water cut
3. they are economists

turmoil · Posted: Thu Jun 23, 2005 8:43 pm Post subject:

oh and..
4. we have to believe their 'proven' reserve 'estimates'

personally, i don't see how an estimate is also proven.

it's sorta like saying, “well mr. president, the Apollo 13 mission is estimated and proven to last 10 days. We launch in t – 10 seconds.”

but hey, whatever keeps those investors happy... Rolling Eyes

rockdoc123 · Light Sweet Crude Joined: May 16, 2005 Posts: 1707

turmoil · Posted: Thu Jun 23, 2005 9:15 pm Post subject:

also the Economist published this

take from that what you want. Laughing

you can get to it by taking their 'green quiz'

Sparaxis · Posted: Thu Jun 23, 2005 11:26 pm Post subject:

The problem with the reserve/production ratio as shown in the chart is that it is a static snapshot in time and doesn't reflect the changing dynamics of growth in demand, degree of depletion or anything else. It means that if all those reserves existed and were exploitable, you could produce them for that many years at current rates of production, and in years+1 there wouldn't be a single drop left.

Geology doesn't work that way.

Remember, peak oil is only the half way point. Saudi, Kuwait, Iraq, Iran will continue to produce oil for many, many years (perhaps not as long as shown here, but certainly many many years). But what matters is the global total. If we only have 30 mmbd of Middle East oil producing in 20 years when demand today is 86 mmbd, then you can see the problem. There's lots of oil left--a trillion or more barrels, but it's not as cheap, not as easy to extract, doesn't have as high energy profit, and IN AGGREGATE, won't be produced in volume higher than what the peak is. And when it stops growing, our paradigm crumbles.

Antimatter · Posted: Thu Jun 23, 2005 11:58 pm Post subject:

Yes but the R/P ratio gives an indication of how fast reserves are being produced. Given that most OPEC countries have R/P above 50 years and non-opec has R/P around 15 I have a hard time seeing how OPEC can be at peak as many here claim. OPEC was ramping up rapidly before the 70's oil shocks after which a lot of production was shut in.

Unless of course the reserves figures are complete crap.

0mar · Posted: Fri Jun 24, 2005 12:12 am Post subject:

venky · Intermediate Crude Joined: Mar 13, 2005 Posts: 839

Here's how i see it. Saudi Arabia reports reserves at 262 billion barrels. However they themselves admit that only 130 billion of these are proved while the rest are just probable.

Another constantly brought up argument is than in the 1980's most OPEC countries raised their reserves suddenly by large amounts, some like Saudi Arabia and Kuwait almost doubled their reserves overnight. This data is ther at the ASPO website. Since OPEC quota's are determined by size of reserves, many experts believe that these reserves were spurious ones to gain additional export shares. Another point is that there has been little change in OPEC reserve estimates since the 1980's. For example the Saudi's have reported around 250 billion barrels since 1985 or so although in the meantime hundreds of billions of barrels have been pumped out of the ground throughout the middle east. This essentially is the argument of the critics of Saudi Arabia.

Matt Simmons brings up the issue that 90% of Saudi Arabia's oil production is from 5 mature fields all discovered in the 40's or 50's. His main argument is that the Saudi's may have overworked these fields (water injection and other methods) and these fields may face a sudden collapse and a rapid decline. These issues are complex and considering the secrecy with which the Saudi's guard their reserve data it is difficult to decide where the truth lies.

If the Saudi's are telling the truth it might be possible theoretically for them to sustain their current production for 50 years, but there are reasons to be extremely worried.

LadyRuby · Posted: Fri Jun 24, 2005 6:33 am Post subject:

As far as production, actual annual production, are these good numbers? Who provides data on actual production? Is it possible that some of the actual production numbers could be off? For instance, after it was determined a couple of years ago that Saudi Arabia's annual production had declined a bit (then jumped up again) is there any way that they or someone could have artificially inflated production numbers? Anyone know?

shakespear1 · Light Sweet Crude Joined: May 13, 2005 Posts: 1567

Read the following which may clearify a few things.

http://www.energybulletin.net/333.html

If consumption continues to grow then it will not be possible to satisfy it by the supply. We did not go into Iraq for Democratic reasons.

If Saudi could deliver all that we need we would not be in Iraq.
_________________
Men argue, nature acts !
Voltaire

"...In the absence of the gold standard, there is no way to protect savings from confiscation through inflation."

Alan Greenspan

shakespear1 · Light Sweet Crude Joined: May 13, 2005 Posts: 1567

This one also

Published on 12 Apr 2005 by Aljazeera. Archived on 13 Apr 2005.
Bank says Saudi's top field in decline

by Adam Porter for Aljazeera

http://www.energybulletin.net/5292.html

I am impressed that this is coming from Aljazeera. Wink

_________________
Men argue, nature acts !
Voltaire

"...In the absence of the gold standard, there is no way to protect savings from confiscation through inflation."

Alan Greenspan

khebab · Moderator Joined: Sep 27, 2004 Posts: 935 Location: Canada