Yet Another Forecast for Saudi Oil Production

Predicting the future of Saudi Arabian oil production is a rather daunting endeavor, given the limited amount of information available upon which to base a prediction. Presented here is an appraisal for Saudi production through 2015 based on an informed analysis of past production data and a simple extrapolation into the future. It is found that the oil production trend from the early 1990s through the present is driven more by the addition of new producing areas than by “peak and decline” in the Hubbertian sense. This trend will likely continue for the next few years leading to a new “peak”, although more rapid decline in mature areas of Ghawar will eventually overwhelm both mitigation efforts therein and added production elsewhere.


Rethinking the Peak

Has oil crude production in Saudi Arabia peaked? Some claim that it did as of 2006, although the slate of new production — including the redevelopment of Khurais and Manifa — would suggest that 2006 levels will be exceeded in the next few years. The problem here is not with the concept of peak oil, since all individual producing areas will certainly exhibit this behavior, but rather with the idea that the nature of the peak and decline of an arbitrary entity is immutable to changes in the definition of said entity. Such changes can include large new discoveries which eventually increases the amount of oil available, new technologies which do the same, or political decisions about which fields to produce and when. The latter two of these certainly apply to present day Saudi Arabia.

Is it really critical when Saudi production peaks? Yes, given that this certainly means that, with no spare capacity, Saudi Arabia can no longer serve as the swing producer. The rapid price increase during 2008, while not proof of a Saudi peak, is nevertheless indicative of the impact on the world economy from a limited supply buffer.

The Oil Drum