Saudi Arabia Increases Crude Exports

38 Comments on "Saudi Arabia Increases Crude Exports"

Cloggie on Thu, 18th Aug 2016 10:06 am 



A slap in the face of Richard Heinberg and Colin Campbell.

Boat on Thu, 18th Aug 2016 10:18 am 



If the Saudi had any brains they would lead the world in solar and battery tech. That oil and gas their using should be revenue.

HARM on Thu, 18th Aug 2016 12:56 pm 



@Boat,

Nope. They’re too busy subsidizing part-time taxi drivers who pay their rent with welfare and have 9 children.

shortonoil on Thu, 18th Aug 2016 3:01 pm 



Ghawar, that has produced over half of Saudi Arabia’s oil, was assayed by some of the world’s best petrologists to be a 70 Gb field. It has already produced 85. Aramco reservoir engineers stated several years ago that the water cut at Ghawar was 50%. That means that the original oil seam of 350 feet is now down below 30. Aramco has been doing a huge amount of horizontal drilling in an effort to skim the last few feet of oil off the top of the field.

They know that the long term price of oil is down, and they are attempting to sell every barrel that their old, tired, worn out fields can produce before the price goes down even further.

http://www.thehillsgroup.org/depletion2_022.htm

The Saudis are saving nothing for tomorrow because they know that for them there isn’t any. When the water seam hits their horizontal producers it the end of the game. Saudi Arabia is a failed oil producing state, and the House of Saudi is filling the pockets of its 5000 princes before they make a bee line out of town. As Matt Simmons said, “as goes Ghawar, goes the world”.

http://www.thehillsgroup.org/

HARM on Thu, 18th Aug 2016 6:08 pm 



@shortonoil,

Oh, if only…
I just don’t trust any predictions of the KSA’s imminent demise anymore, as they’ve already had so many, the top profession over there should be undertaker. Every time the KSA (and Ghawar) is pronounced dead, the dusty old cadaver amazingly somehow increases production, erects a new record-breaking hotel/mosque and starts a new war with its unfortunate neighbors.

Survivalist on Thu, 18th Aug 2016 6:22 pm 



KSA crude production increases are made upon the back of a record rig count. That is called infill drilling. Infill drilling is just sticking more straws in the margarita. It brings future production forward to the present and the production curve will at the end of the day show less similarity to a bell curve and more similarity to a Seneca curve. There is no evidence that KSA production increases are coming from Ghawar. My guess is it’s from Manifa. Alternately I suppose KSA could be a magic porridge pot but instead of porridge its oil. But I doubt it.

Survivalist on Thu, 18th Aug 2016 6:24 pm 



I trust the secondary sources contained in OPEC MOMR. Self reporter numbers are highly suspect.

http://www.opec.org/opec_web/en/publications/338.htm

joe on Thu, 18th Aug 2016 11:08 pm 



Always trying to paint a rosy picture, Saudi Arabia is mired in poverty, war and terrorism. Its a police state governed by religious police and supports two pillars of economic insantity, a huge royal family and socialism. If ever anything goes wrong with either of these, the consequences will be felt all over the world.

Brent on Fri, 19th Aug 2016 3:14 am 



And then there is… http://www.euronews.com/2016/08/18/saudi-arabia-abandoned-migrant-workers-refuse-free-flights-home

shortonoil on Fri, 19th Aug 2016 6:05 am 



“There is no evidence that KSA production increases are coming from Ghawar. My guess is it’s from Manifa. “

There are no exports of crude coming from Manifa. Manifa is a vanadium laced mud hole that sat for 60 years because no one would buy the oil. To use it, KSA had to build a special refinery, at a cost of $38 billion, to process it. Apparently it was possible because it has not burned down, yet. The output of Manifa is limited to the output of that refinery. The only thing Manifia is used for is the production of finished fuels used internally by KSA.

Kenz300 on Fri, 19th Aug 2016 10:53 am 



Iran and Libya production will continue to grow……..

It is time to transition away from fossil fuels and move to the future………….

Clean energy production with wind and solar………..

Clean energy consumption with electric vehicles……..

No more wars for oil………..

Scotland blows away the competition – 106% of electricity needs from wind – joins select club

https://electrek.co/2016/08/14/scotland-electricity-needs-from-wind/

The Netherlands’ ban on gas-powered cars ‘likely to become law’, all new cars electric by 2025

https://electrek.co/2016/08/14/netherlands-ban-gas-powered-cars-likely-law-all-new-cars-electric-2025/

rockman on Fri, 19th Aug 2016 12:09 pm 



“Every time the KSA (and Ghawar) is pronounced dead…” Oil fields, giant or tiny, don’t “die”. They all eventually DEPLETE to a non-commercial production rate. And any prediction that Ghawar Field will deplete will be proven true…eventually. Only an egotistic fool would try to predict the hard date for any field to deplete. Let alone Ghawar Field given the lack of details provided the public.

rockman on Fri, 19th Aug 2016 3:17 pm 



At least such news should finally silences all the folks that claimed the KSA, by not decreasing production, was trying to shut down the US shale players. Now that those companies are crippled to a fair degree why would they increase production now? Just as easy to answer today as it was back prices began their slide: follow the f*cking money! LOL. The KSA reasons for producing more oil is the same now as it was earlier: given they can’t control the oil price they only way to max revenue is to increase their production volume.

It really isn’t rocket science. LOL.

shortonoil on Fri, 19th Aug 2016 5:27 pm 



If Ghawar has a water cut of 50%, as reported by Aramco reservoir engineers, its oil seam is 30 feet or less of the original 350 feet. The field has produced 85 Gb to date, which leaves, at best, 7.29 Gb. At 5 mb/d the field will have become completely exhausted in about 4 years.

The House of Saudi controls the Kingdom’s oil fields. Without the production from Ghawar the Kingdom collapses in short order, and the Royals had better had found other employment before then. The House of Saudi has nothing to lose by over pumping their fields. They are in the same position as the entire petroleum industry.

http://www.zerohedge.com/news/2016-08-19/corporate-defaults-surpassing-last-years-total-even-citi-cant-believe-what-going

http://www.ijens.org/Vol%2011%20I%2001/1110201-4343%20IJET-IJENS.pdf

The price now is now in a long term decline trend:

http://www.thehillsgroup.org/depletion2_022.htm

The faster they can pump their fields the more total revenue they will generate. With 5000 princes to feed and cloth, every barrel as soon as possible, is needed to insure their long term princely existence. This is just one example of of the end game that many will be playing.

http://www.thehillsgroup.org/

PeterEV on Fri, 19th Aug 2016 7:00 pm 



Back in 2004, the Saudi Aramco laid out their overall scenario. If they produced their fields like we in the US produce our fields, they would peak in 2025. Instead, they are “farming” their fields, “row by row”. They started at one end of Ghawar and are proceeding down the line. **They are also developing other fields and areas***. The idea is that if they limit their production to 10 million barrels a day, Their decline won’t begin until 2042(?). If they increase their production to 12 million barrels of oil per day, their decline won’t begin until 2034(?).

In an “emergency”, they said they supply 16 million barrels a day. They did not define what constitutes an “emergency” nor did they say how long they could pump at that rate.

Matt Simmons disputed their numbers and so did Samsam Bakhtiari who thought the Saudis had 157 billion barrels of reserves versus the Saudis 275 billion barrels.

Those were the “facts” back then. The fact today is that there is less total oil available due to consumption. The lower the price of oil, the less incentive there is to drill. The higher the price, the more incentive there is to drill.

Wake me up if this changes…

shortonoil on Sat, 20th Aug 2016 6:27 am 



“The fact today is that there is less total oil available due to consumption.”

The fact today is that the oil industry has taken the best that could be found for the last 150 years. What is left isn’t worth very much. It is called depletion, and it goes on and on.

http://www.thehillsgroup.org/

PeterEV on Sat, 20th Aug 2016 10:25 am 



Hi Short,

and they will still be pumping oil from Ghawar for another 100 years. Don’t think so? There is a well in Pennsylvania near Colonel Drake’s first well drilled in 1859 that they are still pumping oil from. What will matter is what we as human beings will do with the remaining oil.

As my moniker suggests, I’m leaning toward an electric world where oil plays a diminishing part and solar, wind, and other renewables play an increasing part.

I think we will witness a “dance” between oil and other energy sources. As a for instance. Perovskite cells have a solar to electricity of 31% and are made at 150 degree C temperatures. There was a recent discovery where the crystalline structure doing the 31% conversion was identified. The low heat compared to the heat needed for silicon solar cells is a real plus. Also the 31% conversion rate is 50% more than your typical PV array cell. It is discoveries such as this that give me hope that we can transition over the next couple of centuries from Petroman to Solarman, etc. There are still a number of technical problems to overcome but I think we recognize the problems ahead and are working to address them.

Northwest Resident on Sat, 20th Aug 2016 10:36 am 



“The Saudis are saving nothing for tomorrow because they know that for them there isn’t any.”

It is a worldwide phenomenon. As the Saudis pump and sell every barrel they can as fast as they can in a race to the “finish line”, the FED and central banks in all major economies keep piling on the debt, dragging whatever future consumption they can into the present, to hell with the future because they ALL know there isn’t any.

PeterEV, there are so many informed and well-research articles that have been posted on this site and others that clearly show why solar power is a non-factor in the world’s future. Reason why: solar is totally dependent on fossil fuel energy. There will be niches and small scale applications for solar energy, no doubt, but nothing on a large enough scale to replace fossil fuels for powering transportation and the world’s economies.

rockman on Sat, 20th Aug 2016 11:06 am 



Peter – “They started at one end of Ghawar and are proceeding down the line.” Actually Ghawad Field was essentially drilled up end to end decades ago. Their old maps prove that. But I suspect the “row by row” analogy refers to their more recent infield drilling program. The distribution of porosity (and thus productivity) is more complex in carbonate reservoirs then that in most sandstone reservoirs. As production advances those “rows” that would benefit from additional drilling become more obvious.

Every reservoir has a “MER”…Maximum Efficiency Rate. At the MER a field will ultimaterly recover the maximum amount of oil or NG. Producing above the MER will reduce that recovery. The MER is especially critical in a carbonate reservoir like Ghawar Field. The MER is very difficult to estimate during the initial production phase but can become more clear in time. But if produced too much above the MER much oil might be “stranded” (left behind) as the water front passes thru that portion of the reservoir.

Given the lack of transparency it’s difficult to prove but many suspect the KSA produced Ghawar Fld well beyond its MER in the early days and stranded a lot of oil. That’s bad and good news: many believe those stranded oil reserves have been the primary target of the recent drilling programs.

But, again, all we can do is speculate since such data remains a state secret. And yes: they might still be producing oil from Ghawar Fld in 2116. But it will be an insignificant amount. And probably will have been for a number of previous decades.

Davy on Sat, 20th Aug 2016 11:45 am 



Peter, your world will be a short one but exciting one. Good luck! I am doing the same thing with solar and Ev. I am unlike you not buying into the fantasy of s shiny renewable world. I know that vision is comforting and easy to relate to but it is nothing more than a false narrative with hopium and fantasy as its basis.

shortonoil on Sat, 20th Aug 2016 12:24 pm 



“Hi Short,
and they will still be pumping oil from Ghawar for another 100 years.”

Oil had some value in 1859, and it still has some value today. But, using old Colonel Drake’s well, that is maybe producing 3 barrels a day, hardly qualifies as proof that it will have value 100 years from now. That argument is called an ad hominem, appealing to one’s self interest rather than reason.

Oil is a commodity that is used to power modern economies. The Roman’s had oil, and they used it to treat medical aliments, and scare Carthaginian war elephants. Out side of that it wasn’t of much use to their civilization. The Romans never figured out how to get energy from oil.

Oil’s use in today’s modern civilization is because this civilization has figured out how to get energy from oil. Unfortunately, not all oil qualifies to be used for that purpose. Only about 40% of the world’s liquid hydrocarbon resource does, and almost 90% of that 40% has already been pumped.

When the last 10% is gone, so also will be the civilization that can use it. After that they will be using oil if there is any war elephants around that need scaring!

http://www.thehillsgroup.org/

marmico on Sat, 20th Aug 2016 1:59 pm 



the FED and central banks in all major economies keep piling on

Well the FED hasn’t been piling on anything for almost 2 years. Your shtick is long in the tooth just like the peak oiler fuctards.

https://fred.stlouisfed.org/series/WALCL

Northwest Resident on Sat, 20th Aug 2016 2:52 pm 



“Well the FED hasn’t been piling on anything for almost 2 years.”

But up until then they had piled on a lot, and just because the other central banks have picked up the slack doesn’t invalidate my point in the slightest. We are still living in a global economy that is kept alive by massive infusions of debt. And of course, what the FED is officially doing “on the record” is very unlikely to be the whole story.

What “shtick”? Only a died in the wool full retard fuctard such as yourself would interpret truthful statements as being “shtick”.

But of course, it is what you do best. Keep up the idiot comments, marmtard, they entertain if nothing else.

ghung on Sat, 20th Aug 2016 3:05 pm 



Right, Marmi, I guess the Fed pretty much maxed out after buying about $2 trillion in treasuries over the last 6-7 years. Meanwhile they don’t seem so hot on the idea of raising interest rates. I suppose, though, that being about the least worst economy on the planet doesn’t hurt, at least for a while, unless you’re an exporter.

Anyway, with other central banks dumping treasuries, we’ll see how long this little party lasts. Seems the private mega-banks could be the buyers of last resort, until they aren’t. Beats negative interest rates I guess, and after all, it’s only money.

Northwest Resident on Sat, 20th Aug 2016 4:49 pm 



“The European Central Bank is manufacturing more than $1 trillion worth of euros a year. (And now the UK is piling on billion$ of pounds). The U.S. Federal Reserve has created over $3 trillion dollars of new money in the last decade (after taking nearly a century to create the first trillion). No one knows exactly what is going on inside China’s central bank, but we can be certain that it involves massive liquidity creation. ($1 trillion Q1 2016 for starters). In a world filled with monetary looseness, the Bank of Japan is printing the most money of any major economy relative to the size of its economy.”

And ghung makes an excellent point. Keeping interest rates artificially zero-bound is the ONLY thing that enables the rest of the big economy central banks to print with abandon, and ALL that enables the FED and corporate America to carry massive debt loads. The FED is stuck at zero-bound (unless they, too, go negative). The FED can’t even raise rates by a quarter point without setting off Armageddon.

A logical analysis of the facts strongly indicates that this over-indebted and hollowed out global economy is moving fast on a one-way trip into market meltdown and economic collapse.

I hope they’ve got a plan!

http://www.pbs.org/newshour/making-sense/column-the-monetary-bubble-to-end-all-bubbles-is-coming/

onlooker on Sat, 20th Aug 2016 5:03 pm 



Or North, we are stuck with debt paying off debt by ever increasing debt. Sounds like a vicious cycle to me.

Northwest Resident on Sat, 20th Aug 2016 5:18 pm 



onlooker — Vicious cycle, definitely. And one that can’t go on forever, or even much longer. Vicious cycles tend to grow ever more vicious until they self-destruct. What absolutely must not be allowed is for the markets to self-correct. The markets must not be allowed to reflect reality, because that reality is devastating. TPTB can’t afford to expose their children to such ugly truths. Massive infusions of new “money” into the economy and financial engineering on historically unprecedented scales is all that prevents the market from self-correcting. That, and circuit breakers. And lots and lots of propaganda.

shortonoil on Sat, 20th Aug 2016 5:27 pm 



“I hope they’ve got a plan! “

The prevailing Interest rate is by definition the time value of money. When the world wide defacto interest rate has become zero that is stating that no growth is occurring. Without growth the world is literally in default; there is no way to service the debt that already exists. There can be no plan for this situation – only the waiting. Waiting, as the vast technological engine that humans have built, comes chugging to a halt.

onlooker on Sat, 20th Aug 2016 5:29 pm 



Great analysis North. Basically, one huge Ponzi Scheme and Balloon being inflated. At some point those at the top will make a killing and everyone and everything else will end up losers. To be expected as we are pressing against ever more non negotiable limits and have a system fundamentally predicated on growth especially with regards to debt.

onlooker on Sat, 20th Aug 2016 5:49 pm 



So Short can I ask you specifically does this mean lending will come to an abrupt halt sometime soon?

Northwest Resident on Sat, 20th Aug 2016 6:59 pm 



“sometime soon?”

“…new loans to large borrowers fell by 47% during the peak period of the financial crisis (fourth quarter of 2008) relative to the prior quarter and by 79% relative to the peak of the credit boom (second quarter of 2007).”

The only thing that prevented the downward spiral — one that would see an even greater (and ultimately total) reluctance to lending was DEBT. And lots of it. QE and bank bailouts in the billion$, just to start.

But as we all know, the total collapse that 2008 threatened was not prevented, merely stalled — with debt (QE, central bank bond and then stock purchases, monetary easing into the trillion$).

This time, whatever triggers the next big fall, another trillion$ or two in quick “easing” probably won’t have the same mojo as last time, simply because the global economy is already swimming in an ocean of debt.

https://www.moodys.com/microsites/crc2010/papers/ivashina_jfe_paper.pdf

shortonoil on Sat, 20th Aug 2016 7:16 pm 



“So Short can I ask you specifically does this mean lending will come to an abrupt halt sometime soon? “

It’s getting late here in Virginia; got to still go find the dog. He’s a beagle, so sometimes that works and sometimes it doesn’t. I’ll honestly have to think about that. The impact of negative interest rates on lending? Banks are going to be paying you to borrow money??? Wait until that backfires through the $900 trillion dollar derivatives market. By the time they figure out who owes who, most people will be spending most of their time admiring the south end of a north bound mule!

If they are one of the lucky ones!

onlooker on Sat, 20th Aug 2016 7:27 pm 



haha, didn’t Warren Buffet say “Derivatives are weapons of mass destruction”

JuanP on Sat, 20th Aug 2016 8:35 pm 



Peter “It is discoveries such as this that give me hope that we can transition over the next couple of centuries from Petroman to Solarman, etc.”

I seriously doubt that we have a couple of centuries to make that transition. The way GW & CC are going exponential it looks like we are a few decades late already to make that transition in time. If we had started reducing population, consumption, and pollution half a century ago then we would have had the time and resources, but now it is simply too late. Humans will keep breeding, consuming, and polluting unsustainably until the planet becomes completely uninhabitable because that is our nature. Our extinction will be our transition! LOL!

JuanP on Sat, 20th Aug 2016 8:43 pm 



Onlooker, I have always thought that a debt jubilee is absolutely inevitable in our lifetimes. Today’s debts can’t be paid back and will not, therefore, be paid back. But since the people owed are the rich the process will necessarily be a mess because it won’t be voluntary. The global financial system has to crash sooner or later; it is absolutely inevitable because it depends on continuous growth and continuous growth is not possible on a planet with finite resources. The only questions are when will it happen and how will it play out.

onlooker on Sat, 20th Aug 2016 9:30 pm 



You said it Juan, it will not be voluntarily. Then powers that be want to keep us in that straight jacket of debt for as long as possible.

Davy on Sun, 21st Aug 2016 7:19 am 



My collapse focus has been on economy, climate, and oil. Climate has been bumped up in urgency. Oil has remained stable in my view of collapse. We have gone over the dynamics of decay with oil which appear to be decadal. The one area I can’t get a firm handle on is the economy. I feel the concept of duration is going to eventually expose the consequences of the economic repression and easing of the last 8 years but when and how?

We are seeing consequences now but they are minor and manageable with the usual extend and pretend. We are seeing the pension industry as one example in dysfunction. Defaults are increasing across industries but in an environment of extend and pretend they can be managed. In a world of disregard for fundamentals of law and standards along with bottomless “thin air liquidity” it appears the economy can be managed for considerable time. The consequences unfortunately are a snowballing of dysfunction and malinvestment.

We have a dualistic markets today. One is the digital and the other physical. They of course are not dualistic but we are operating as if they are. We can do so much with the digital but the physical still lives in the world of law and standards. You cannot make something out of thin air. It must be created with actual physical substance with actual processes. These conditions follow physical laws. This process can be manipulated by the digital but only to the extent of pretending a return. We can make products but will they actually be good investments at the macro and systematic level? We fail to realize in the end we must consume a physical substance to live. We cannot consume a digital widget and live. In the end we are physical not digital. Unfortunately our social narrative is increasingly digital and this will end badly.

We are seeing the results of duration of a dysfunctional dualistic markets. This is physical decay that cannot be extended and pretended indefinitely. We cannot fix years of the decay caused by extend and pretend. The damage is done. We can only extend and pretend more. This is a vicious circle of decay and dysfunction. This is obvious but that still does not answer the question of how long can this go on. I suspect this can go on for some time.

We care an interconnected global world especially at the level of economy that no entity can avoid. All must surrender in extend and pretend. We are now stuck globally in a system that is overextended in extend and pretend. We are to the point of macro systematic malinvestment of all parts. All nations are tied to this and subject to this. This means there are no alternatives and nowhere to run to. There are no safe havens now because systematic risk has been dispersed to all sectors. Malignancy is total and complete.

It appears it will take an outside of the economy shock to destroy and ever weakening Ponzi we call the global economy. These shocks could be war related. They could be oil or climate related. It appears climate is changing abruptly but we have yet to see too much disruption with climate. Oil is in a death spiral of demand and supply destruction but it appears this could go on for years especially if the physical economy continues to shrink. We are building up the biggest shock and awe ever devised by man. We are building up tectonic forces of decay and dysfunction that are going to rip apart a system that every single one of the small little locals we live in rely on but the million dollar question is when?

Duration is the big unknown. We can agree on this we are through a door without return. We have severed the traditional tools of fixing a broken economy. Since the economy is broken without agents of repair we are riding a gradient down of decay and dysfunction. This is occurring in an environment of overshoot, resource depletion, and ecological destruction. These are physical realities that cannot be extended and pretended away. These physical decay realities require a healthy economy to survive. That is something we no longer have so I suspect the problems from these macro physical realities are going to accelerate and at some point provide the match to the gasoline that is our global economy.

Davy on Sun, 21st Aug 2016 7:19 am 



“Seven Signs Of A Deeply Dysfunctional Market” – Why Citi Is Also Warning Of “Surprising, Sudden, Intense” Tail Risk”
http://www.zerohedge.com/news/2016-08-20/seven-signs-deeply-dysfunctional-market-why-citi-also-warning-surprising-sudden-inte

“A properly functioning market is a heterogeneous one: one where some investors are top-down, yet others are bottom-up; some invest long-term, others invest short-term; some look at fundamentals, others look at technical. That’s what makes for a two-way, continuous market. A market where all investors are forced to look at the same factor will inevitably be dysfunctional – grinding tighter today, yet prone to sudden reversals tomorrow when the inflows dry up. And yet anyone trying to hedge against such an eventuality inevitably underperforms.”