Saudi oil field declines.

From: Glenn Morton <>
Date: Wed Apr 28 2004 - 23:02:01 EDT

This week's Oil and Gas Journal has an article on a world oil production
capacity model (Wocap). The author of the article is Samsam Bakhtiari,
who is with the Iranian National Oil co. in Tehran. The model predicts
that world oil production will peak around 2006-2007 at 81 million
barrels per day give or take a million b/d or so. They say a couple of
things that scare me.

        "Under no scenario (even the most exotic ones) could the Wocap
model be simulated to peak after 2008-a date that really seems to be the
ultimate terminus ad quem." A. M. Samsam Bakhtiari, "World Oil
Production Capacity Model Suggests Output Peak by 2006-2007," Oil and
Gas Journal, April 26, 2004, p. 18

While lots of models have indicated different dates for peak oil, most
are concentrated in this decade. There is even an outside possibility
that the world could peak this year.

But the most scarey thing was the last paragraph below. The decline
rates of the Saudi fields. The background of this passage is that Matt
Simmons, a major oil industry investment banker, gave a paper in
February about the sorry state of Saudi fields. More and more experts
are coming to the conclusion that Simmons is correct. Bakhtiari is one
of them:

        "As for Saudi Aramco's defense of its future oil potential, it
simply cannot be taken seriously, as it is now highly doubtful that
their oil fields can hold their own during the present decade. Some
Saudi Aramco officers, such as Mahmoud Abdul-Baqi, vice president,
exploration, and Nansen Saleri, manager, reservoir management, are still
sanguine about future potential, as the latter declared: 'Saudi Arabia
could easily achieve and sustain a production of 10 million b/d through
to 2054.'"
        "If Saleri is correct, then Simmon's thesis and the Wocap
scenarios are good for history's dustbin; there is an unbridgeable gap
between his half a century and a mere decade (at best). But,
fortunately, some Saudi officers are much more prudent than their
above-mentioned colleagues.
        "One of them is Saudi Aramco's senior vice-president for
exploration, Abdullah Al-Seif, who reportedly told an interviewer in
December 2003: 'There is a need for 800,000 b/d [of] new capacity to
maintain [the] current level of 10 million b/d...[as]the decline in
[Saudi] oil fields ranges between 5% and 12%." ." A. M. Samsam
Bakhtiari, "World Oil Production Capacity Model Suggests Output Peak by
2006-2007," Oil and Gas Journal, April 26, 2004, p. 19-20

A 12% decline rate means that in 5 years a field is producing half of
what it produces today. A 5% decline will, in five year's time, result
in a field producing only 77% of what it produces today.

This information is consistent with what I heard personally from
reservoir engineers who have worked the Saudi fields and which I posted
here earlier.
Received on Wed Apr 28 23:02:27 2004

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