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THE Saudi Arabia Thread pt 6

A forum for discussion of regional topics including oil depletion but also government, society, and the future.

Re: Saudis Fear US Shale Oil Boom

Unread postby rockdoc123 » Tue 10 Sep 2013, 09:52:47

A provisio on what is being said here. Yes large parts of some of the shales aren't "commercial" but one has to remember that the nature of this play type (extreme low permeability) means that the technically recoverable hydrocarbons are largely gas. Currently due to low gas prices most if not all of the dry gas plays are uneconomic meaning that the current "sweet spots" are where there is high liquid content. At some point gas prices will rise again and then much of that currently "non-commercial" acreage will be the new sweet spot. Why is that...simply becuase the dry gas portions of the shale plays are invariably over pressured which results in high delivery rates, at $6/Mcf they are quite attractive economically.

Rockman something that you are confusing people with is talking about the Austin Chalk as if it was similar to the Eagleford or other shales. It isn't. The shale plays all are their own source and reservoir whereas the Austin Chalk has the underlying Eagleford shale as it's source rock.

As to the Mexico portion of the Eagleford Pemex has started to drill a few wells in there (mostly vertical) with some success. Of course they are limited in what they can do mainly as a result of experience and counting on Schlumberger or Halliburton to tell them how to complete the wells (neither big blue or big red will care if it is economic as they get paid in any event). The big challenge here is a lot of the activity is around Cuidad Juarez which is a pretty nasty place these days.
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Re: Saudis Fear US Shale Oil Boom

Unread postby ROCKMAN » Tue 10 Sep 2013, 10:52:19

doc - true doc. But I didn't say the AC was a source rock. I said it was a very low perm fractured reservoir. Which makes it very similar to the shales. So they shouldn't be too confused since the AC and the shales have similar production profiles which is the critical aspect.

So true about the NG potential of the shales. Some of the best drilling shows I've seen have come from deep high pressured shales. All we need is $10/mcf again and they'll boom again.
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Re: Saudis Fear US Shale Oil Boom

Unread postby westexas » Fri 13 Sep 2013, 09:09:18

Why is Saudi Arabia not a threat to fracking?

http://peakoil.com/production/why-is-sa ... fracking-2
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Re: Saudis Fear US Shale Oil Boom

Unread postby misterno » Sun 22 Sep 2013, 20:24:27

ROCKMAN wrote:Sure…the Saudis are curled up in a fetal position fearing our shales. LOL. Why not just stick with facts instead of opinions from some folks.

In 2002 the Saudis took in about $60 billion by selling 7.25 million bopd. In 2011 they took in $260 billion selling 7 million bopd. In 2012 their income jumped another $51 billion to $311 billion according to the EIA. Estimate for 2013 are running as high as $350 billion….5X as much as they made just 11 years ago.

Yep…our shale production is really hurting them. LOL. First, we don’t buy much KSA oil. Second, we may be importing less oil now but the US is still the leading oil importer on the planet. It’s estimated that for 2013 the US will spend $400 billion on imported oil. And this is with the aid of those “huge” gains from the shale we are currently enjoying.

Do any of those facts smell like “energy independence “ to you? Are you overwhelmed with an unbridled sense of optimism? LOL. Folks are free to predict whatever they want. But they can’t change the current facts. And now you have them.


US is not the number 1 oil importer, it is the 2nd

http://finance.yahoo.com/news/china-set ... 34535.html
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Re: Saudis Fear US Shale Oil Boom

Unread postby ROCKMAN » Sun 22 Sep 2013, 20:58:56

M - you should read your own link a little closer. It highlights your error:

"According to a report released this week by Wood Mackenzie, the world's second-largest economy will be the globe's largest importer of oil by volume by 2017. The shift is driven by more Chinese consumption, and a prodigious shale boom that is lessening U.S. reliance on imports."

Last time I looked at a calendar it was 2013. LOL.

"As the U.S. produces its own oil and gas, U.S. oil import volumes have declined to 4 million barrels per day (bpd). Meanwhile, China's have gone in the other direction, up from about a million bpd in 2004 to more than 3 million last year. " And last time I checked 4 million is more than 3 million. OTOH both number are BS. The US consumes about 18 million bopd, imports 10 million bopd and produces 8 million bopd.

I would also humbly suggest you find a better source of info than yahoo. Like this one: http://www.indexmundi.com/g/r.aspx?v=93

Yahoo is full of crap. Multiple sources besides the one I offered. Maybe some day China will be importing more oil than the US but according to Mundi the US is importing twice as much as China. The US imports as much or more oil per day than either of the two largest exporters ship. About 40 million bopd is being exported by all countries. Thus the US, according to the EIA the US alone imports about 25% of all the oil exported on the planet.

We are oil pigs. And proud of it. LOL. But back to the subject of the thread. Since the oil shale boom began in the US the Saudi revenue from oil exports has increased from $60 billion/year to over $300 billion/year today. Yep...they must be sh*ting on themselves in fear. LOL. US oil production and Saudi revenue have increased for the same reason: $100/bbl oil.
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Re: Saudis Fear US Shale Oil Boom

Unread postby ROCKMAN » Thu 07 Nov 2013, 18:05:00

Notice that the KSA is talking about losing market share and doesn’t hint that they’ll cut prices to keep market share. As mentioned earlier if the KSA cuts their production to 9 million bopd their gross income would be around $300 billion/yr compared to $110 billion/yr they would have been making 10 years ago if they were producing 10 million bopd. IOW they could lose 50% of their current market share but if that kept prices where they are now the KSA income would still be 50% higher than it was not that long ago. And the oil they didn’t produce today would leave them that much more to produce later as the reserves of the other exporters are depleted.

From Rig Zone: Reuters - OPEC could lose almost 8 percent of its oil market share in the next five years as the shale energy boom and other competing sources boost rival supply, offering the exporter group little benefit from rising world demand. The Organization of the Petroleum Exporting Countries has been slower than some to acknowledge the impact that hydraulic fracturing, or fracking, is having on supply. Earlier this year, it decided to carry out its own research into shale oil. In its annual World Oil Outlook, OPEC said it expected global demand for its crude oil to average 29.2 million barrels per day (bpd) in 2018, down 1.1 million bpd from 2013, because of increasing supply outside the 12-member group. Under another, upside supply scenario, OPEC sees an even larger drop in demand for OPEC crude to 28 million bpd in 2018 - 7.6 percent less than this year and 2 million bpd below what it is currently producing. "There is no shortage of oil and resources are plentiful," OPEC Secretary General Abdullah al-Badri said in the foreword to the report. "Increasing global oil demand is supported by an expanding diversity of supply sources."

OPEC, which holds 80 percent of the world's conventional oil reserves, wants prices to be around $100 a barrel, which in nominal terms is almost four times their level a decade ago. Higher prices have helped to make a wider range of supply commercially viable, including fracking, oil extraction from tar sands and conventional oil wells in more remote locations and in harder-to-tap reservoirs like ultra deep waters.
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OPEC Sees Less Demand for its Oil to 2018 Amid Shale Boom

Unread postby Graeme » Thu 07 Nov 2013, 18:09:08

OPEC Sees Less Demand for its Oil to 2018 Amid Shale Boom

OPEC acknowledged it underestimated the significance of the North American energy boom as it tripled estimates for shale oil produced there and predicted a decline in demand for its own crude through to 2018.

The need for crude from the Organization of Petroleum Exporting Countries, which produces about 40 percent of the world’s oil, will fall by 1.1 million barrels a day to 29.2 million barrels a day between 2013 and 2018, the Vienna-based group said today in its annual World Oil Outlook. Oil production from shale formations in the U.S. and Canada is seen climbing to 4.9 million barrels a day in 2018, compared with an estimate of 1.7 million barrels a day in last year’s report.

“The big picture is obviously surging shale production,” Mike Wittner, head of oil market research at Societe Generale SA, said in a telephone interview from New York before the release of the report.

OPEC’s analysis shows how growing oil output in North Dakota and Texas will prevent the 53-year-old group of 12 oil producers, mostly situated in the Middle East, from capitalizing on the 4.8 million barrel-a-day increase in oil demand it expects over the next five years.

The supply surge has also contributed to a decline this year in the price of oil grades on the U.S. Gulf Coast that influence the price of exports from Saudi Arabia, Kuwait and Iraq. The Gulf crude Mars Blend has fallen 12 percent this year to $93.05 a barrel yesterday, according to data compiled by Bloomberg.


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Re: OPEC Sees Less Demand for its Oil to 2018 Amid Shale Boo

Unread postby Graeme » Thu 07 Nov 2013, 18:17:09

Mods, Please move this thread to " Saudis Fear US Shale Oil Boom" thread, and delete this post. Ta
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Re: OPEC Sees Less Demand for its Oil to 2018 Amid Shale Boo

Unread postby John_A » Thu 07 Nov 2013, 18:18:46

Graeme wrote:OPEC Sees Less Demand for its Oil to 2018 Amid Shale Boom

OPEC acknowledged it underestimated the significance of the North American energy boom as it tripled estimates for shale oil produced there and predicted a decline in demand for its own crude through to 2018.


Amazing. The Saudi's admit that they have not been cornie enough. The corniest of the cornies....brought low by their underestimates.

So the question is, if the corniest of cornies so severely underestimated the production from these kinds of formations, how much MORE oil can they continue to produce? Can all of these 345 BILLION barrels be turned on as quickly, swamping the world in oil?

http://www.eia.gov/analysis/studies/worldshalegas/
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Re: Saudis Fear US Shale Oil Boom

Unread postby John_A » Thu 07 Nov 2013, 18:37:30

ROCKMAN wrote:Sure…the Saudis are curled up in a fetal position fearing our shales. LOL. Why not just stick with facts instead of opinions from some folks.


You are almost prophetic Rock....but perhaps not in the direction you'd like.

Darn right the Saudi's might be worried....if those shales keep affecting price...they have this little problem...called poor people....

Saudi Arabia...NOT CORNIE ENOUGH!!!

http://www.bloomberg.com/news/2013-11-0 ... -boom.html
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Re: Saudis Fear US Shale Oil Boom

Unread postby John_A » Thu 07 Nov 2013, 18:39:33

ROCKMAN wrote:OPEC, which holds 80 percent of the world's conventional oil reserves, wants prices to be around $100 a barrel, which in nominal terms is almost four times their level a decade ago. Higher prices have helped to make a wider range of supply commercially viable, including fracking, oil extraction from tar sands and conventional oil wells in more remote locations and in harder-to-tap reservoirs like ultra deep waters.


So the REAL question becomes...round and round the price goes...where it stops, nobody knows....but the price will be set by...THE MARGINAL BARREL!!!

Anyone want to take a guess at who and what the marginal barrel might be? :!:
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Re: Saudis Fear US Shale Oil Boom

Unread postby ROCKMAN » Fri 08 Nov 2013, 10:41:06

Speaking of the KSA’s ability to cut production to support high prices and still make gobs of revenue:

Reuters – Saudi Arabia has cut back oil output that had held at record rates of around 10 million barrels a day for three months running to help offset a plunge in output from fellow OPEC member Libya. The world's top oil exporter turned down the taps to 9.75 million barrels per day (bpd) in October - versus 10.1 million bpd the previous month. It was typical for there to be a reduction in the amount of crude oil burned for power generation at this time of year. Riyadh lifted output to 10.05 million bpd in August, the highest since records begin in 1980, according to figures from the U.S. Energy Information Administration. It pumped around that record rate during the third quarter before slowing down in October. If production sinks to 9 million, then it would probably be based on a decision to soak up excess oil in the market." The Organization of the Petroleum Exporting Countries meets on Dec. 4 to chart production policy for 2014. Output from the 12 member group fell below its official 30 million bpd target for the first time in two years last month. And demand for the group's crude in 2014 is forecast to sink to 29 million bpd, according to the International Energy Agency, while the cartel's own economists see the call on OPEC oil at around 29.6 million bpd.
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Re: Saudis Fear US Shale Oil Boom

Unread postby JV153 » Sat 23 Nov 2013, 14:56:09

Show talk. SA can export any excess to China.
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Re: Saudis Fear US Shale Oil Boom

Unread postby ROCKMAN » Sat 23 Nov 2013, 17:34:16

"excess"... what's that? BTW: In 2009, Saudi exports to China exceeded those to the U.S. for the first time. That comes as U.S. oil imports are expected to fall overall, thanks to its own domestic energy boom. Chinese investments in Saudi Arabia are on the rise too: China has spent massively on oil refineries in Saudi Arabia and even signed a nuclear cooperation agreement with the desert kingdom.

I suspect what some might view as excess production China views as their oil reserves.
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Re: Saudis Fear US Shale Oil Boom

Unread postby evilgenius » Tue 26 Nov 2013, 14:13:02

How effective is conservation in comparison to the shale boom in terms of its threat to the Saudi marketing position? The US vs the world import position regarding Saudi oil aside, conservation (and possibly serious renewable adoption) used to be more feared. Is this alarm over fracking a red herring? Are the Saudis more alarmed by the support for renewables and the efforts to improve energy efficiency and what they mean for their marketing position in ten years or twenty years time?

The Export Land Model threatens to consume the Saudis over coming generations. The West, especially Europe, is tiring of the flood of economic refugees that the Middle East and the larger environ has foisted upon it due to their refusal to address the ELM.Their elite maintain a firm handshake with stable Western realms in order to protect themselves from sudden social disruption, but what are they doing to protect themselves over the long-term? They seem very interested in what is going on in Syria. Their interest may have something to do with their long-term plan, or not. But is that interest indicative of a 'more of the same' response, seeking a religious fundamentalist or culturally fundamentalist answer over a plan that would create an explosion of jobs?

And what about the actual position of the West? Are the various Western Countries really willing to watch the Saudis and others use more of their own oil in order to promote industry within their own systems that might employ the teeming masses? They've avoided that, by hook or by crook, this long, why shouldn't we expect them to try and continue avoiding it into the crisis moments coming with a further trip along the plateau, or down an actually steeper peak?

Also, I don't know what the Saudis really think about what the US is doing with its fracking advantage vis a vis the tussle they are having with Russia, and their Iranian proxy, in the region. SA has been firmly in the US camp since the Reagan years, but if they want to continue using fundamentalism to control their people, over using a wider net, higher suffrage, prosperity, that back pocket relationship may come to an end. They could change sides.
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Re: Saudis Fear US Shale Oil Boom

Unread postby ROCKMAN » Tue 26 Nov 2013, 19:02:25

Evil : A few of my opinions. First: "Is this alarm over fracking a red herring?" What ''alarm"? Maybe I missed it but I haven't seen any alarm from the KSA...just from various media sources. I'll let you decide how distressed the Saudis are today: KSA oil revenue pre US shale boom = $60 billion. KSA oil revenue post US shale = $300 billion. You can start shedding a tear for our Arab cousins now. LOL.

"Are the various Western Countries really willing to watch the Saudis and others use more of their own oil". And if not exactly what are our options? Take the oil away from them? And risk a military confrontation with China that has tens of $billions tied up in KSA infrastructure? My goes would be: hell no. LOL.

"SA has been firmly in the US camp ". IMHO the KSA has always, and will always, migrated to the camp that benefits them most at that time. At one time that have been the US camp. In the future I suspect that camp will have a more oriental motif. The future of KSA oil production may not hinge as much on their flow rate and internal consumption but on who has the preferential rights to buy that oil they do export. The KSA, even taking into amount ELM may be exporting a significant amount of oil in ten years but that doesn't mean countries importing that oil today will have the same opportunity at that future time.
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Re: Saudis Fear US Shale Oil Boom

Unread postby Tanada » Sun 15 Dec 2013, 17:35:22

If KSA is fearful of fracking in the USA they sure are doing a good job of hiding that fear.
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Re: Saudis Fear US Shale Oil Boom

Unread postby ROCKMAN » Mon 16 Dec 2013, 11:37:52

T - The KSA is actually sitting in the corner trembling if fear. Well, actually they've hired a bunch of foreign worked they pay $10/day to tremble for them. The royal family doesn't have time to do it themselves. They're too busy counting that 500% increase in revenue they've suffered since the US shale revolution began. LOL.
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Re: Saudis Fear US Shale Oil Boom

Unread postby ROCKMAN » Mon 16 Dec 2013, 17:21:02

pstarr - "SA used to be the go-to-Kingdom...". Perhaps my memory is fading: when was the last time the KSA manipulated oil prices for the benefit of the US? LOL.
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