[Tanada]

$this->bbcode_second_pass_quote('Plantagenet', 'D')on't forget the world is using 93 million bbls of oil each day with OPEC providing about 35 million bbls per day. All the oil OPEC provides is conventional, the vast majority of from legacy fields that have been producing for decades. Ghawer in Saudi Arabia alone produces about 6 million bbls per day.

Those fields are going to peak, one by one, and quickly decline.

Lets return to this topic after Ghawar peaks---which it is very close to doing. Peak Oil theory will seem a lot more viable then.

Cheers!

[Plantagenet]

$this->bbcode_second_pass_quote('Tanada', '')$this->bbcode_second_pass_quote('Plantagenet', 'D')on't forget the world is using 93 million bbls of oil each day with OPEC providing about 35 million bbls per day. All the oil OPEC provides is conventional, the vast majority of from legacy fields that have been producing for decades. Ghawer in Saudi Arabia alone produces about 6 million bbls per day.

Those fields are going to peak, one by one, and quickly decline.

Lets return to this topic after Ghawar peaks---which it is very close to doing. Peak Oil theory will seem a lot more viable then.

Cheers!

[rockdoc123]

$this->bbcode_second_pass_quote('', 'T')wilight is almost here

[Plantagenet]

$this->bbcode_second_pass_quote('rockdoc123', '
')Contrary to the uneducated view of Simmons ....there will not be a sudden cessation of production as water overwhelms the system.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'I')s it possible that Ghawar will behave like Cantarell, which had very high annual decline rates?

[ROCKMAN]

Ghawar isn't "dying". Oil fields like it don't die: they produce water free oil at its peak rate. And then the water cut kicks in and lifting increases to keep the net oil production at the max possible. And then water cut increases to the point when the max volume lift isn't sufficient to maintain the high oil volume. Based upon what various reports imply Ghawr is some where in this neighbor. As production continues the water increases and thus reduces the produced oil volume. This continues until the value of the produced oil is less then the cost to produce the wells. Based upon the size and geology of Ghawar it could easily hold that status for the next 40+ years...maybe a good bit longer. But somewhere along that path it will be producing just 20% of its currernt rate...and still remain commercial for a couple of more decades.

Oil fields don't die. Eventually they just produce continuously decreasing volumes of oil until they become noncommercial at which time they are abandoned. IMHO debates would be better served by sticking with the correct terminology applicable to the dynamic.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'F')lat line should come pretty soon. Ghawar is now a thin oily film of floating on a massive water reservoir. Saudi Aramco is essentially broke having spent 10's of $billions on extended-reach, multilateral horizontal on what are essentially pool skimmers.

[GHung]

When I examine KSA and its ability to maintain production, I don't consider past or current production as much as I consider their behavior. Seems they are planning for an eminent decline (in oil income) in a pretty big way. Would they be putting as much effort into "transforming the Saudi economy and society" if they knew they could maintain current production levels for five more years? Ten years? Twenty? Is it all about current prices? Their price expectations going forward? Do they think they can't compete with shale? Concerned about the climate? Why are they cutting social programs/subsidies and raising their domestic fuel prices if they can continue to produce flat out. One could speculate that they see demand destruction in the near future, but there's not a big case to be made for that yet from a BAU perspective.

What's on their minds?

[rockdoc123]

$this->bbcode_second_pass_quote('', 't')he oil is red, the water is blue. 10 years ago there was still some red oil on a sea of water. today it is an oily film. rock, do you know what the water-cut is today in Ghawar? I'll bet its around %99.99.

[ROCKMAN]

Ghung - By selling those shares they are simply monitizing a bit of their future revenue...at a discount. No diffent then any pubco selling bonds. You get some capex now to use for expansion now but you pay for it in the future...plus the cost of raising the money.

[Tanada]

$this->bbcode_second_pass_quote('rockdoc123', 'W')ell in 2004 water cut was at 30% and remained flat until the last publication I saw which was in 2010.....ooops still somewhere between 30% and 40%. This of course due to the MRC wells and SMART completions. Water production that is not coned is largely no big deal. I've been involved in a few fields that had 90% water cut and produced a fair bit of oil and gas. One of those started out its production life at 90% water cut due to high vertical permeability. All you need is an economic means of dealing with the water. In Saudi Arabia that would pose zero problem.

Again recovery in Ghawar will be 70 - 73% according to Aramco which means there is still about 25 Gbbls left....I know of a lot of companies who would like to get their hands on an "oily film" of that size.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'l')ook at the seismic.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'T')hus the key question, when do production declines for Ghawar set in? What rate do they set in at, 3%, 6%, 9% per year? If they are over 50% depleted now and are ultimately going to reach 70-73% in 20 to 30 more years of production how soon will we know they are on the declining output slope?

[Plantagenet]

Rocdoc---Ghawer isn't the only giant conventional oil field that is aging badly. Virtually all of the world largest oil fields have been in production for decades, and are well past their prime (I mean the oil fields, of course, not rockdoc----).

the-long-decline-of-the-worlds-largest-oil-fields

Clearly all the giant conventional oil fields will eventually decline and then stop producing, some of them sooner then later. This will mean the loss of tens of millions of barrels of oil production each day. This loss will inevitably put downward pressure on total global oil production and upward pressure on oil prices.

Thats when we'll see if peak oil is really dead. Can tight oil shale replace Burgan? Or Ghawar? Or those two and 10 other giant oil fields all declining at once?

Cheers!

[Plantagenet]

KSA starts injecting CO2 to increase oil recovery from Ghawar.

saudi-aramco-testing-c02-to-get-more-oil-from-giant-ghawar-field

That should give it a few more years. But when that last bit of oil is gone Ghawar will be toast and the world will have to find another 6 million bbls of oil each day.

Cheers!


The end is in sight at Ghawar

[Rod_Cloutier]

John Michael Greer of the Archdruid report made a prediction at the beginning of 2016 that the Saudi Arabia House of Saud would be gone by the end of this year:

$this->bbcode_second_pass_quote('', ' ')The Kingdom of Saudi Arabia is a fine example of a phemomenon all too familiar to students of history: a crumbling, clueless despotism which never got the memo warning that it couldn’t get away any longer with acting like a major power. The steady decline in the price of oil has left the kingdom in ghastly financial condition, forced to borrow money on international credit markets to pay its bills, while slashing the lavish subsidies that keep its citizens compliant. A prudent ruling class in that position would avoid foreign adventures and cultivate the kind of good relationships with neighboring powers that would give it room to maneuver in a crisis. As so often happens in such cases, though, the rulers of Saudi Arabia are anything but prudent, and they’ve plunged openly into a shooting war just over its southern borders in Yemen, and covertly but massively into the ongoing mess in Syria and Iraq.

The war in Yemen is not going well—Yemeni forces have crossed the Saudi border repeatedly in raids on southern military bases—and the war in Syria and Iraq is turning out even worse. At this point, the kingdom can’t effectively withdraw from either struggle, nor can it win either one; its internal affairs are becoming more and more troubled, and the treasury is running low. It’s a familiar recipe, and one that has an even more familiar outcome: the abrupt collapse of the monarchy, followed by prolonged chaos until one or more new governments consolidate their power. (Those of my readers who know about the collapse of the Russian, Austro-Hungarian, and Ottoman Empires at the end of the First World War have a heads-up on tomorrow’s news.) When that happens—and at this point, it’s a matter of when rather than if—the impact on the world’s petroleum markets, investment markets, and politics will be jarring and profound, and almost impossible to predict in detail in advance.

The timing of political collapse is not much easier to predict, but here again, I’m going to plop for a date and say that the Saudi regime will be gone by the end of 2016. That’s specific prediction #4.

[AdamB]

$this->bbcode_second_pass_quote('Rod_Cloutier', 'J')ohn Michael Greer of the Archdruid report made a prediction at the beginning of 2016 that the Saudi Arabia House of Saud would be gone by the end of this year: