Barrel Fever

Does anyone know how much oil there is in the world?

…Here’s how arcane the oil guessing game can get. Saudi’s Ghawar oil field is the world’s largest; it’s been pumping out oil since 1951 and holds 7 percent of the world’s proven reserves. Overall Saudi production has been falling since 2005, yet the number of rigs in use has tripled since 2004. Why is that? Some analysts believe the increased rigs are intended to compensate for declining production from Gwahar. Others argue that the Saudis are operating strategically, shutting their most productive wells as prices rose and opening smaller wells to better manage supply.


Experts have tried to come up with more independent and definitive answers. The Saudis use water injection to increase oil recovery. Some analyses of the water content from the northern part of Ghawar conclude that the water content has risen from 20 percent in the 1940s to 50 percent now, supposedly a sign that yields are about to fall dramatically.

Seeking to resolve this debate, investment research firm Sanford Bernstein performed a satellite analysis of the oil field, reviewing high-resolution images dating back to 2001. The water-injection methods used by the Saudis produce surface depressions when oil reservoirs become depleted. Bernstein found no signs of surface collapse. Instead, it found some areas slightly elevated, which might indicate use of high-pressure recovery, an advanced extraction technique. They concluded that only one of the oldest sections was in decline. That report was dismissed as “junk science” by industry analyst and peak-oil theorist Matthew Simmons.

Slate