Re: Saudi fields

From: Rich Blinne <e-lists@blinne.org>
Date: Wed Apr 14 2004 - 15:34:34 EDT

On Mon, 12 Apr 2004 21:56:08 -0500, "Glenn Morton"
<glennmorton@entouch.net> said:
> An analysis in this week's Oil and Gas Journal of te Saudi fields, has
> some interesting things to say about the claims of the Saudi oil
> minister. He said that they could raise their production by 50% and keep
> it there for 50 years. The article I just read is Manouchehr Takin,
> "Sustainable Supply from saudi Arabia, Iraq: Oil Reserves or Politics?"
> Oil and Gas Journal, April 12, 2004, p. 20-22
>
> Takin believes that the Saudi's do have 261 billion barrels of reserves,
> which by my calculations would mean they should peak around 2010 or so.
> He outlined planned development projects of 1.75 million barrels per
> day. These projects are going on now. Will they add to Saudi production
> capacity (believed to be 10 million bbl/d now)? Takin says it is
> unlikely. He says that the 1.75 million new barrels per day of
> production which will be put online over the next 3 years will merely
> counteract the decline the Saudi's are seeing in their fields. That
> means that they would stand still in their production ability. Takin
> believes that at most 1-1.5 million barrels of higher production is all
> they could do. It gives one pause to think that demand for oil will be
> 50% higher in 16 years.
>
> One quote
>
> "Will Saudi Arabia choose to undertake the ...costly megascale
> development projects of its oil fields in anticipation of another
> opportunity (as in 1990-1991) to increase its market share, or will the
> kingdom tread a more cautious path? Let us remember that Saudi Aramco
> has borrowed in the international capital market, the Saudi government
> has a domestic debt comparable to the size of the country's GDP, and the
> kingdom has decided not to open the oil sector to outside investment.
> These trends suggest that the cautious approach is more probable.
> Manouchehr Takin, "Sustainable Supply from saudi Arabia, Iraq: Oil
> Reserves or Politics?" Oil and Gas Journal, April 12, 2004, p. 22
>
> If the Saudi's don't increase their capacity, we can't likely meet the
> goals.
>
> "The rate of discovery of worldwide oil reserves, after declining for 40
> years, has slowed to a trickle. In 2000, there were 16 large discoveries
> of oil, eight in 2001, three in 2002, and none last year, notes James
> Meyer, director of the Oil Depletion Analysis Centre in London."
> http://www.csmonitor.com/2004/0129/p14s01-wogi.html
>
> And that is our problem. Here are some stats from the Wall Street
> Journal
>
> Oil found by exploration drill bit
> 1997 4.5 billion
> 1998 5.8 billion
> 1999 9.5 billion
> 2000 13.05 billion bbl
> 2001 4.02 billion bbl
> 2002 3.34
> Chip Cummins, "Data Cast Doubt on Oil Discoveries," Wall Street Journal,
> January 23, 2004, p. A2
>
> In each of the above years, we pumped more than 26 billion barrels out
> of the ground. The math of a balance sheet doesn't look good.
>
Hmm. This just came out over the Reuters wire. Is EIA whistling past the
graveyard?
 
By Tom Doggett

WASHINGTON (Reuters) - Saudi Arabia's oil production is far from peaking,
and the kingdom's output will likely more than double over the next two
decades, the head of the U.S. Energy Information Administration said on
Wednesday.

Some oil industry analysts believe Saudi Arabia's oil fields are near
their peak production and won't be able to supply the crude the world
will need in the future.

Guy Caruso, who heads the Energy Department's analytical arm, said Saudi
Arabia's current oil production capacity of 10.5 million barrels per day
(bpd) will likely increase to 22 million bpd by the year 2025.

Speaking to reporters on the release of the EIA's long-term international
energy forecast, Caruso said Saudi Arabia will be able to reach the 22
million bpd production level based on its current proven oil reserves of
264 billion barrels -- one-fourth of the world's total.

"The existing (Saudi) resource base, crude reserves...are sufficient to
get to this production capacity," Caruso said.

Saudi officials have said their country's oil production will not decline
any time soon, and that they expect the kingdom's recoverable oil
reserves to actually increase over the next two decades.

Caruso would not speculate on whether the Saudis would need to open their
oil sector to foreign oil companies in order to produce 22 million bpd.

However, he pointed out the kingdom is already able to produce 10.5
million bpd "without outside investment."

Separately, Caruso said the EIA's long-term forecast has Iraq's oil
production rising from 2.5 million bpd this year to 6.6 million bpd in
2025.

Many analysts believe Iraq's oil output could go even higher, because so
many parts of the country have not been explored for oil.

The additional barrels from Iraq and Saudi Arabia will help boost OPEC's
total oil production to 56 million bpd in 2025, more than double the
cartel's expected average output of 27 million bpd this year, according
to the EIA's forecast.

World oil demand is expected to rise from 81 million bpd in 2004 to 121
million bpd over the next two decades, EIA said.
Received on Wed Apr 14 15:38:35 2004

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