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Saudi oil exports surge to 12-yr. high

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Saudi oil exports surge to 12-yr. high

Unread postby Graeme » Wed 19 Feb 2014, 18:09:28

Saudi oil exports surge to 12-yr. high

Saudi Arabia exported more crude oil in 2013 than in any year since at least 2002, according to official statistics posted on the website of the Joint Organizations Data Initiative (JODI).

The Kingdom, the world’s largest crude exporter, shipped 7.54 million barrels a day on average last year, up from 7.41 million barrels a day in 2012, it said. Saudi Arabia exported 5.49 million barrels a day in 2002, when the group began collecting oil data. Saudi monthly exports in 2013 peaked at 7.84 million barrels a day in August, the most since April and May of 2003.

Saudi average crude production declined in 2013 from the previous year even as the nation boosted exports, JODI data showed. The country pumped 9.63 million barrels a day on average last year to 9.76 million barrels a day in 2012, according to the initiative.

“This tells me that Saudi Arabia needed to sell more crude to meet an increase in fiscal spending,” said John Sfakianakis, chief investment strategist at Riyadh-based MASIC, an investment company. “With Brent oil prices now stable around the same levels for the past three years, the only way to increase the country’s revenues is by exporting more crude.”


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Re: Saudi oil exports surge to 12-yr. high

Unread postby dolanbaker » Wed 19 Feb 2014, 18:18:04

Isn't part of that rise down to substitution of gas for oil in some of the power stations, thus releasing more oil for export?
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Re: Saudi oil exports surge to 12-yr. high

Unread postby bobcousins » Wed 19 Feb 2014, 19:01:33

I thought Ghawar was about to collapse 5 years ago.
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Re: Saudi oil exports surge to 12-yr. high

Unread postby Graeme » Wed 19 Feb 2014, 19:50:12

Wow. Haven't heard from you for a while. Planning to contribute more?
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Re: Saudi oil exports surge to 12-yr. high

Unread postby calhoun » Thu 20 Feb 2014, 07:52:26

An alternative headline:

Saudi Arabia Takes 12 Years To Match Export Level

Remember that Manifa just came online last year providing a big jump in production, but Manifa is the last major untapped field. It's the last hurrah. At the same time, KSA is under intense pressure to fund programs at home to keep civil unrest under control.

http://www.bloomberg.com/news/2014-02-19/saudi-arabia-seen-needing-to-boost-oil-exports-as-spending-rises.html

Note this quotation from the article cited: "Saudi average crude production declined in 2013 from the previous year even as the nation boosted exports, JODI data showed."

So they are producing less but exporting more -- perhaps this partially explains the huge drawdown in global oil storage last year. Not exactly great news.
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Re: Saudi oil exports surge to 12-yr. high

Unread postby ROCKMAN » Thu 20 Feb 2014, 08:41:10

I think the important take away isn’t how much they produced or exported but how much they kept internally. In 2013 that was about 1.79 mm bopd. In 2002 KSA consumption was growing at a rate of 4.5%. The latest number from 2010 shows a GR of 9.7%.

But another factor will be kicking in over the next several years: refinery JV’s…especially with China. When the Red Sea refinery comes on line it will pull 600,000 bopd from the export total. That volume represents a reduction from current exports of almost 8% of that recent record volume.

So while the KSA is bringing on new production thanks to higher oil prices the decline of the heritage production continues. And no: Ghawar hasn’t “collapsed”…oil fields don’t collapse…they just silently deplete. The development of the refinery JV’s could be viewed as another effective depletion component…export depletion. And that 8% decline won’t happen over years but over just several months as the plant ramps up. I would expect to see a sharp reaction in the market place when it happens. And that’s just one example. There are numerous other refinery JV’s developed by China with other oil producers that will effectively reduce a significant volume of oil from the open market.
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Re: Saudi oil exports surge to 12-yr. high

Unread postby westexas » Thu 20 Feb 2014, 10:31:40

In my opinion, it seems likely that 2013 was the eighth year in a row that annual Saudi net oil exports were below their 2005 annual rate of 9.1 mbpd.

Saudi net oil exports 2002 to 2012, total petroleum liquids + other liquids, EIA, mbpd:

2002: 7.1
2003: 8.3
2004: 8.6
2005: 9.1
2006: 8.6
2007: 8.1
2008: 8.8
2009: 7.6
2010: 8.1
2011: 8.3
2012: 8.7

2013: 8.7 to 8.9 (Estimated)

The Saudi ECI Ratio (Export Capacity Index, the ratio of production to consumption) fell from 5.7 in 2005 to 4.0 in 2012. Based on a mathematical model, and based on empirical data*, ECI declines like this are associated with very high rates of depletion in the remaining volume of CNE (Cumulative Net Exports). Of course, when a net oil exporting country hits an ECI ratio of 1.0 (production = consumption), net exports are zero.

Saudi ECI Ratio for 2002 to 2012 (extrapolation based on 2005 to 2012 rate of decline):

Image

Based on the 2005 to 2012 rate of decline in the Saudi ECI Ratio, I estimate that Saudi post-2005 CNE are about 56 Gb (billion barrels). They shipped about 21 Gb from 2006 to 2012 inclusive, suggesting that they may have already shipped about 38% of their post-2005 CNE, an estimated post-2005 CNE depletion rate of about 7%/year, as production increased at about 0.5%/year from 2005 to 2012.

*Insofar as I know, there were six major net oil exporters (countries with 100,000 bpd or more of net exports) that hit or approached zero net oil exports from 1980 to 2010, excluding China. They are: Indonesia, UK, Egypt, Vietnam, Argentina and Malaysia. Their combined production virtually stopped increasing in 1995, rising only 3% from 1995 to 1998, and as annual net exports fell by 3%. In this three year period from 1995 to 1998, they shipped 40% of their combined post-1995 CNE. So, a 1%/year rate of increase in production corresponded to a 17%/year rate of depletion in post-1995 CNE. Following is a graph showing the normalized Six Country production, ECI ratio, net exports and remaining post-1995 CNE, by year, for 1995 to 2002 (with 1995 values = 100%):

Image

The Six Country ECI ratio fell from 1.7 in 1995 to 1.4 in 2002, and this ECI decline corresponded to an 84% decline in the remaining volume of post-1995 CNE. Note that an extrapolation of the seven year 1995 to 2002 rate of decline in the Six Country ECI ratio suggested that Six Country post-1995 CNE would be about 9 Gb. The actual value was 7.3 Gb.

As noted above, the Saudi ECI Ratio fell from 5.7 in 2005 to 4.0 in 2012, and an extrapolation of the seven year 2005 to 2012 rate of decline in the Saudi ECI ratio suggests that their post-2005 CNE will be about 56 Gb, with 21 Gb having been shipped from 2006 to 2012 inclusive, which suggests that Saudi Arabia may have shipped about 38% of post-2005 CNE in the past seven years.

If we look at the Top 33 net oil exporters in 2005, their combined ECI ratio fell from 3.8 in 2005 to 3.3 in 2012, and an extrapolation of the seven year 2005 to 2012 rate of decline in the Top 33 ECI ratio suggests that their post-2005 CNE will be about 530 Gb, with 112 Gb having been shipped from 2006 to 2012 inclusive, which suggests that the (2005) Top 33 net exporters may have shipped about 21% of post-2005 CNE in the past seven years.
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Re: Saudi oil exports surge to 12-yr. high

Unread postby ROCKMAN » Thu 20 Feb 2014, 11:35:44

wt – First, a correction: the capacity of the Aramco Red Sea refinery will be 400,000 bopd and not 600k bopd. Still scheduled to start in 2014. Would you think injecting a step change in your plot to take into account this decrease in export capability be appropriate? The capability would still be there, of course, but clearly the KSA isn’t going to let a $20 billion investment sit idle for a lack of feedstock. The net effect should look like an instantaneous decrease of 400,000 bopd capacity when the plant comes on line in a year and a half or so.

And while your excellent plots give a great characterization of the KSA oil production/export future it doesn’t offer who will be benefitting from that capacity. Obviously the refinery JV’s that the KSA participates in will be one recipient. But there are also those long term supply contracts. Of course, neither the KSA nor the buyers (such as China) care to make those details public. But we do have some volumes to work with. The last stat I found was China importing a bit more than 1 million bbls of KSA oil in 2011. That compares to 839 million bopd in 2009. Or a 20% increase in just 2 years. From a practical standpoint none of the folks importing KSA oil today care how much capacity they have as they are concerned about competition from other buyers…like China.

I would be thrilled to see you put your butt on the line and make some wild ass projections subtracting ELM, refinery JV’s and export contracts to China to show what oil the KSA may be offering to the rest of the market place in the next few years. No easy task, for sure. For instance by China increasing imports from the KSA it isn’t buying that oil elsewhere. Or are they? Depends on whether China can maintain their increasing appetite for fossil fuels. That’s not a slam dunk certainty given chatter about their economy’s potential to slow up significantly or even crash. OTOH some are expecting their robust fossil fuel consumption to continue growing like an untreated cancer.

But hey…give it a shot. If you miss it will be OK. After all you’re just a geologist and folks have low expectations of us anyway. LOL.
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Re: Saudi oil exports surge to 12-yr. high

Unread postby westexas » Thu 20 Feb 2014, 11:48:49

Rock,

If you want some crazy sounding depletion rates, you can look at the estimated rate of depletion in post-2005 Available CNE. This would be the estimated rate of depletion in the cumulative volume of Global CNE available to importers other than China & India.

Some definitions:

Global Net Exports (GNE) = Combined net exports from (2005) Top 33 net exporters (EIA, total petroleum liquids + other liquids)
Chindia's Net Imports (CNI) = Combined net imports into China & India
Available Net Exports (ANE) = GNE less CNI

ANE fell from 40 mbpd in 2005 to 35 mbpd in 2012.

GNE/CNI Ratio (analogous to ECI Ratio plot) for 2002 to 2012 (post-2012 extrapolation based on 2005 to 2012 rate of decline):

Image

The 2005 to 2012 rate of decline in the GNE/CNI ratio was 9.3%/year, which suggests that ANE would theoretically approach zero net oil exports around the year 2030. As they say, something's gotta give, because this extrapolation suggests that Available post-2005 CNE, i.e., the total estimated remaining volume of Global Cumulative Net Exports of oil available to importers other than China & India, has already fallen by more than half in only seven years (through 2012).
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Re: Saudi oil exports surge to 12-yr. high

Unread postby TheAntiDoomer » Thu 20 Feb 2014, 13:04:12

Personal attack deleted. Play nice. You know the rules.
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Re: Saudi oil exports surge to 12-yr. high

Unread postby westexas » Thu 20 Feb 2014, 13:28:07

Re: Antidoomer

Specifics?

In any case, when I posted my first article in early 2006 on net oil exports (focusing on Saudi Arabia, Russia and Norway), Saudi net oil exports had increased from 7.1 mbpd in 2002 to 9.1 mbpd in 2005, an 8.2%/year rate of increase. As noted above, annual Saudi net oil exports have been below their 2005 rate for seven straight years (through 2012), a pattern which probably continued in 2013.

And here is the "Gap Chart" for the (2005) Top 33 net exporters:

Image
Last edited by westexas on Thu 20 Feb 2014, 13:57:02, edited 4 times in total.
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Re: Saudi oil exports surge to 12-yr. high

Unread postby ROCKMAN » Thu 20 Feb 2014, 13:36:12

wt - Facts? We don't need no stinking facts!
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Re: Saudi oil exports surge to 12-yr. high

Unread postby westexas » Thu 20 Feb 2014, 13:53:27

Rock,

I call it CPS Syndrome (Cornucopian Primal Scream Syndrome):

http://www.bearhandsart.com/wp-content/ ... scream.jpg
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Re: Saudi oil exports surge to 12-yr. high

Unread postby bobcousins » Thu 20 Feb 2014, 14:40:54

Graeme wrote:Wow. Haven't heard from you for a while. Planning to contribute more?


Hi Graeme :)

Thought I would check in on the Cult of Doom, prompted by the current freaky weather. About 5 years ago, I had discussions at work about Peak Oil and Climate Change, and my boss was rather dismissive of PO, but felt Climate Change was a big threat. It seems for various reason that he was right.

Anyway, theoildrum.com is mothballed, peakoildebunked has tumble weeds, (nothing left to debunk), so I came here, which seems to be the last bastion of PO doomery. Nothing much seems to have changed on that front, and I don't think there is any more to be said.

Meanwhile, I stopped worrying and bought a gas guzzling sports car. Oops! :o
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Re: Saudi oil exports surge to 12-yr. high

Unread postby Graeme » Thu 20 Feb 2014, 17:24:19

BC, Great to have you back! Yes climate change has got worse since you last posted here, and PO hasn't gone away. We're still in the PO era. I expect it to get more interesting over the next decade or so as oil supply continues to dry up.

WT, Based on your analysis, do you expect KSA to be exporting during the 2020's? If not, can Iraq/Iran take up the slack? Who else is there? Russia?
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Re: Saudi oil exports surge to 12-yr. high

Unread postby westexas » Thu 20 Feb 2014, 23:10:53

Graeme,

I think that Saudi Arabia will be a net exporter until around 2035 to 2040 or so, but as pointed out above, the biggest volumetric depletion tends to be early in the net export decline phase. I estimate that Saudi Arabia may have shipped about half of their post-2005 Cumulative Net Exports (CNE) by the end of 2017.

A rough but consistent rule of thumb is that about half of post peak CNE are shipped one-third of the way into the decline period. The Six Country net export peak was 1995, and they hit zero net exports in 2007, 12 years later. By the end of 1999 (one third of the way into the decline period), they had shipped 54% of post-1995 CNE, even though production in 1999 was 2% higher than 1995.
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Re: Saudi oil exports surge to 12-yr. high

Unread postby Keith_McClary » Thu 20 Feb 2014, 23:28:05

ROCKMAN wrote:But another factor will be kicking in over the next several years: refinery JV’s…especially with China. When the Red Sea refinery comes on line it will pull 600,000 bopd from the export total. That volume represents a reduction from current exports of almost 8% of that recent record volume.
It's not really "a reduction from current exports", the only difference is where it is refined. Just old-fashioned economic nationalism: "We should not export raw materials, we should only allow export of finished products, so we get the jobs and industrial tax base". Isn't that what the US does - oil exports restricted, but refined products OK?
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Re: Saudi oil exports surge to 12-yr. high

Unread postby Keith_McClary » Fri 21 Feb 2014, 00:07:23

bobcousins wrote:Thought I would check in on the Cult of Doom, prompted by the current freaky weather. About 5 years ago, I had discussions at work about Peak Oil and Climate Change, and my boss was rather dismissive of PO, but felt Climate Change was a big threat. It seems for various reason that he was right.

Anyway, theoildrum.com is mothballed, peakoildebunked has tumble weeds, (nothing left to debunk), so I came here, which seems to be the last bastion of PO doomery. Nothing much seems to have changed on that front, and I don't think there is any more to be said.
Yeah, prices have quadrupled and they are desperately exploring the ends of the Earth and the depths of the Oceans just to keep on the "plateau", regardless of safety, health or environmental concerns.

But no "DOOM", so far.
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