Heading Out

Seeking the winds that help to sail on Shakespeare's tide.

Sunday, January 16, 2005

Saudi Oil production

I have this odd problem (as does Matthew Simmons) with working out the actual state of Saudi Oil production. Today, for example, the Aramco President said:

"We are now engaged with the Haradh (oilfield) increment, which will add 300,000 barrels per day of capacity; by 2007 we will have completed the Abu Hadriyah-Al Fadhili-Khursaniyah field development programme which will bring online another 500,000 barrels per day; and by the end of the decade, the giant Khurais will be on stream with in excess of one million barrels per day of capacity,"
.They are currently producing about 9 million barrels a day (mbd) which comes from the following fields, as various articles have indicated:

Abqaiq 400 kbd; Abu Sa'fah 200 kbd; Berri 300 kbd;
Ghawar 4.5 mbd; Hawtah 200 kbd; Hout 300 kbd;
Khurais 300 kbd; Marjan 270 k; Qatif 800 kbd;
Safaniya 700 kbd; Shaybah 600 kbd; and Zuluf 500 kbd.
This adds up methinks to 9.07 mbd.

But Abqaiq is in serious decline and so is Ghawar apparently so that the 800,000 bd from Qatif has been brought on line to match these declines. The current surplus
"We are committed to maintaining the surplus production capacity at 1.5-2 million barrels per day level to meet emergencies," he said
seems to be in heavy crude that is not easily refined by todays refineries, if I remember a quote from Aramco from earlier this year.

The thing is that if Khurais is already producing 300 kbd then the increase will be only 700 kbd, and when you add this to 300 kbd and 500 kbd then you only get 1.5 mbd and that by the end of the decade. And this will not match the declines in Abqaiq and Ghawar (which appear to be about 360 kbd/year).
Sorry I should have also included the quote from the top of the story to explain why I am perhaps the teeniest bit incredulous. The article opened with:
"World's largest oil firm Saudi Aramco today said it plans to boost production capacity to 12 million barrels per day next year and to 15 million barrels per day in the near future."
This means they have to add 3 mbd next year apparently (though if they are doing 9 and have 1.5 in reserve then they only have to add 1.5 mbd), assuming that there are no more production declines. Since there will be, then they have to add say about 2 mbd next year and another 3 to 4.5 mbd by the end of the decade. It is in light of those numbers, and the clear lack of any indication where they might get the oil, that causes this minor Huh! to erupt. Not saying that they don't have it, just that where they are currently saying that it will come from does not add up.


Post a Comment

<< Home

Weblog Commenting and Trackback by HaloScan.com