[tmazanec1]

I have heard that Saudi Arabia has been suppressing American fracking by pumping out a lat of oil to depress thaw price.
For as long as I have been following PO I have heard "Ghawar is Dying". When will SA be unable to continue to do this?

[kublikhan]

It's not that the Saudi's are pumping more that people are complaining about. It's that they refused to cut production. The Saudis are pumping about the same amount of oil now as they were 3 years ago. The US on the other hand is pumping 50% more. It's the US that really opened up the taps in the last 3 years. The Saudis are under no obligation to cut their own production so US frackers can fill in the gap with their product. It's a dog eat dog world.

Oil production in mbpd - figures from April of year specified
country_____ 2012 2015
Saudi Arabia 9.9 9.9
US__________ 6.3 9.7

Saudi Arabia Crude Oil Production

U.S. Field Production of Crude Oil

[tmazanec1]

$this->bbcode_second_pass_quote('kublikhan', 'I')t's not that the Saudi's are pumping more that people are complaining about. It's that they refused to cut production. The Saudis are pumping about the same amount of oil now as they were 3 years ago. The US on the other hand is pumping 50% more. It's the US that really opened up the taps in the last 3 years. The Saudis are under no obligation to cut their own production so US frackers can fill in the gap with their product. It's a dog eat dog world.

Oil production in mbpd - figures from April of year specified
country_____ 2012 2015
Saudi Arabia 9.9 9.9
US__________ 6.3 9.7

Saudi Arabia Crude Oil Production

U.S. Field Production of Crude Oil

[StarvingLion]

The USA is hindering fracking.

Fracking costs $8 million to bring a single well into production. This is likely to dramatically increase with new EPA rules. The barrage of heavy trucks smashes the local roads that requires 10's of billions of dollars to rebuild.

The fact is Hydraulic Fracturing is extremely inefficient and error prone. The drill bit is not steered in real time to the sweet spots and constant refracs are required that often fail. There is no science of fracking. It is entirely an art. The retarded Anglo-Saxon banking con is not interested in technologies that require very expensive field experiments that have a high degree of uncertainty.

Therefore, fracking, like nuclear, will simply stop in the USA because refinement is too difficult and expensive. The USA is no longer interested in being an industrial power, the manufacturing capital of the world. The neoliberalism con is an extractive economy (eg. traders) that uses semiconductor derived technologies to basically rip everyone off with surtaxes.

[Outcast_Searcher]

Could this be a moot point? I saw, per the following link, that SA wasn't going to continue this as aggressively after summer.

http://www.marketwatch.com/story/saudi- ... 2015-07-29

Also, depending on market prices (which the current trend and lots of predictions say seems to be down) might do the job for them -- for awhile, anyway.

And, does it matter in the big picture? The oil will still be there, even if owned by stronger financial hands. When the price rises to a point that the demand is there and the risk is seen as acceptable, the oil will be recovered and burned.

Nothing is changing here except the timing of which oil gets burned.

[C8]

I would think some of the tech that has made US oil production so productive and lower in costs will be used by the Saudis too to extend their fields.

[Tanada]

My personal opinion? KSA will keep pumping as much as they can until about November 1, 2015. When the big banks do their re-evaluation of the fracking companies in October a lot of them will be crippled if not outright killed. KSA will see this as msiion accomplished and switch back to profit motive driving the prices back up to $75-$85/bbl. This will help themselves a great deal without doing much for their competitors like Iran.

[ROCKMAN]

". The drill bit is not steered in real time to the sweet spots and constant refracs are required that often fail". And once again we have vivid proof of another "expert" how understands nothing about the technology being deployed. Folks pick up a smattering of tech info and think they understand everything. It's akin to giving a child a load pistol and the wondering what went wrong. LOL.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('Tanada', 'M')y personal opinion? KSA will keep pumping as much as they can until about November 1, 2015. When the big banks do their re-evaluation of the fracking companies in October a lot of them will be crippled if not outright killed. KSA will see this as msiion accomplished and switch back to profit motive driving the prices back up to $75-$85/bbl. This will help themselves a great deal without doing much for their competitors like Iran.

[StarvingLion]

Rockman is full of nonsense again. First an overview of realtime logging and steering from the book, "Fundamentals of Sustainable Drilling Engineering", @2015 Wiley,

"The steerable drilling systems are particularly valuable where changes in the direction of the borehole are difficult to achieve, where directional control is difficult to maintain in the tangent sections of the well (such as in formations with dipping beds) or where frequent changes may be required. The steerable systems are used in conjunction with measurement while drilling (MWD) tools, which contain petrophysical and directional sensors. These types of MWD tools are oft en called logging whilst drilling (LWD) tools. The petrophysical sensors are used to detect changes in the properties of the formations (lithology, resistivity or porosity) whilst drilling and therefore determine if a change in direction is required. Effectively the assembly is being used to track
desirable formation properties and place the wellbore in the most desirable location from a reservoir engineering perspective. The term “Geosteering” is often used when the steerable system is used to drill a directional well in this way."

In the chapter entitled "Horizontal and Directional Drilling"

"One of the greatest challenges in horizontal drilling is maintaining the drill bit within a thin reservoir or staying away from oil-water or oil-gas
contact."


"Since geologists and geophysicists cannot give the location of a reservoir (target) with 100% accuracy,...."

---------------------------------------------

There, I just destroyed the economic and environmental legitimacy of Hydraulic Fracturing in two sentences. Geosteering does not work reliably with unconventionals. The fact that the book contains the word, 'Sustainable', in its title is needed because Fracking and oil drilling in general is not economically nor environmentally sustainable. Its back to the deep seas because thats where the legitimate reservoirs are found. Here, the intense pressures and temperatures frys the electronics of making measurements ahead of the drill bit.

[davep]

SL, I think Rockman was referring to fracking rather than conventional wells whereas your quote appears to be for conventional wells. My Dad was involved in horizontal drilling in the eighties. It's not exactly new.

[Pops]

Couple things,
KSA is getting into refining
Drilling continues to increase

Just a WAG but looks like i: oil aint quite as easy, ii: the old guard is gone, iii: they gave up on being a US protectorate

[Synapsid]

Pops,

That KSA refining: Yanbu refinery JV came online in April, I believe, the second JV 400 000 barrels/day refinery in recent years. A third is due in 2017 giving 1.2 million barrels/day of refining capacity that wasn't there a few years ago. If the JV agreements are 50/50 then there'll be 600 000 barrels/day of spanking new capacity for Saudi Aramco.

Saudi Arabia should have begun doing this long ago, I think.

More surprising to me is that Saudi Aramco has been running recruiting ads in Rigzone specifying shale experience. They haven't learned from our experience, it seems.

[Tanada]

$this->bbcode_second_pass_quote('Synapsid', 'M')ore surprising to me is that Saudi Aramco has been running recruiting ads in Rigzone specifying shale experience. They haven't learned from our experience, it seems.

[Synapsid]

Tanada,

I don't know either. I suspect they're starting from zero as far as knowledge of shale resources in the country, though. High-level voices pooh-poohed shale when it began to take off here.

[Subjectivist]

$this->bbcode_second_pass_quote('Synapsid', 'T')anada,

I don't know either. I suspect they're starting from zero as far as knowledge of shale resources in the country, though. High-level voices pooh-poohed shale when it began to take off here.

[ROCKMAN]

Dave - No, I was referring to the kitty cat's statement:"The drill bit is not steered in real time to the sweet spots and constant refracs are required that often fail"." And the he responds with a great reference that explains why he's full of sh*t regarding his statement that geosteering is done in real time. So what: the steer the drill bit after the drill the well? I hope most folks caught the absurdity of that statement even if they know little about direction drilling. That claim is no different the saying the pilot of a landing plane doesn't control the plane in real time. Truly bizarre.

[Pops]

KSA rig count is still increasing,

http://peakoilbarrel.com/wp-content/upl ... -Count.jpg
EIA via POB

So if the Saudi's idea is that it's the US's turn to cut production and bring up the price, the fact remains, KSAs spare capacity, at least nameplate capacity, is relatively low by historical standards. Spare capacity is the amount that can be brought online in a month and be maintained for 3 months.

With no spare capacity, some weather or a jihad in Canada or somewhere could easily put a crimp in supply because frackers can't just turn a spigot, can they?

[sjn]

Isn't it a bit "tin-foil" to suggest the Saudis are conspiring to destroy US fracking? Isn't it more likely that oil prices are being suppressed for the same reason all other commodity prices are falling? Why should oil be special in this regard?

As to the underlying causation, that really isn't as simple as blaming it on the Saudi's or US frackers, they're both driven by the same dynamic. Whether or not you think there's any validity to shortonoil's ETP model, there can be little doubt now whether there has been a massive mis-allocation of capital in the insane financial bubbles that have been driving the global economy for the last few years. The result has been many non-economic or marginal activities have been financed that shouldn't have been, at a time when economic resource extraction is being hit hard by diminishing returns. Where cause ends and effect begins, isn't always determinable in a complex system with many feedbacks, the globalised financial economy is no exception. The Saudi's are just a cog in the machine.