Peak Oil, Saudi Arabia (Interview with Matthew Simmons)

SPK: There has been a lot of talk about Saudi Arabia’s spare capacity, just how much do they have. Do you believe they have spare capacity and if so, what do you think it is?

MRS: If they have any spare capacity left it would have to be in Safaniya, which is the big offshore field. That’s 28 gravity oil which is heavy oil, and there really isn’t any spare refinery capacity left in the world for heavy oil. And if Safaniya actually could crank up by 1.5 mbds and at peak Safaniya could produce 1.2mbd, maybe 1.5mbd 20 years ago, so the whole definition, if you define spare capacity by the amount of readily available oil that is useable then I think the answer is categorically no, they have no spare capacity.

SPK: The criticism that you just laid out I have heard that from a friend who runs a hedge fund. Nice to hear it seconded.
Note: This interview is in 2 parts – part 2 is hyperlinked at the top of the webpage.

The Agonist