Fredrik Robelius on Saudi Arabia
Fredrik Robelius – Giant Oil Fields
Friday, April 6, 2007
Many publications with forecasts of future oil production has a gap between future production and demand. A common solution to fill the gap is production from Saudi Arabia. There seem to have been a general consensus among forecasters on a more or less unlimited production capacity from Saudi Arabia, with production levels up to 20Mbpd (EIA, 2005, 2006; IEA, 2005).
Peculiar enough, this consensus has developed despite no such information fromneither Saudi Aramco nor Saudi Arabian officials. Permanent increases in production rates together with ever increasing reserves have simply been taken for granted. Indeed, the reserves of Saudi Arabia are large, the largest in the world. However, to refer to the discussion in chapter 5, the official Saudi Arabian proven reserve number is listed at around 260Gb and have been more or less unchanged the latest 16 years. This is despite a total production of 48Gb during the last 16 years. Moreover, new field discoveries during the same time amount to less than 10Gb (OFN,GF). Thus, a simple calculation reveal a proven reserve of around 220Gb. This number includes the debated increase from 170Gb to 258Gb in 1990. A look at the URR for the giant fields of Saudi Arabia reveals a number between 230 and 361Gb (GF). A majority of this difference can be found in the URR estimates of the largest fields: Ghawar, Safaniya, Berri, Shaybah, Abqaiq and Zuluf. Cumulative Saudi Arabian production excluding the neutral zone is some 103Gb. This leaves a volume between 127 and 258Gb left of the original URR. By assuming the URR to the 2P reserves, the higher number is consistent with the official number. The only difference being the official number is proven reserves instead of 2P.Moreover, assuming the top 25 per cent is probable reserves leaves the high end estimate of Saudi Arabia proven reserves at 194Gb and the low end at 95Gb. Still, the lower value is a very large reserve but undeniable much less than the official value of 260Gb. Unfortunately, as Simmons (2005) has argued, neither Saudi Aramco nor the official Saudi Arabian oil ministry has released any detailed field by field data to prove either the reserve estimate of 260Gb or 95Gb right.
As a response to Simmons work, two representatives from Saudi Aramco presented their view on the criticism on the Saudi reserve at a meeting inWashington D.C. The presentation by Baqi and Saleri (2004) showed for the first time since the early 1980s details on production from single fields. Furthermore, the presentation includes a forecast on future production from Saudi Arabia. The forecast shows two views, one of sustained production at a 10Mbpd level and the other at 12 Mbpd. Thus, far away from other forecasts of 20 Mbpd. Moreover, Dr S. I. Al-Husseini, retired executive from Saudi Aramco E & P, called the expectations of 20Mbpd production from Saudi Arabia unrealistic, instead he referred to future plateau levels of 10 and 12Mbpd (Mortished and Duncan, 2004; Al-Husseini, 2004).
pages 106-107 Fredrik Robelius – Giant Oil Fields
