What does advanced recovery techniques have to do with facility upgrades??....besides nothing?

Woodmac points out that all of the announced upgrades and new projects coming onstream will allow for around 12. In order to get up to 15 they will have to invest further which is all I said.

What does advanced recovery techniques have to do with facility upgrades??....besides nothing?

Advanced or EOR techniques do play a significant role here. By removing bottle necks in production or separation of PW and oil one can now increase flow rates due to other efficiencies.

Case in point:

http://www.skec.com/news/NewsView.asp?iSeq=66

KOC has signed a deal with SK Eng for upgrading thier gathering centers. Why do they need to upgrade? ...To increase the flow rates and bring in better OWS techology.
Oilcan

Oh come now - was that too personal?

I saw an easy shot so I took it

Please feel free to say my name and correct something I may have erroneously posted or "attack" as you call it.

Then we can debate, argue or "engage in verbal combat" if you like and I will call you my lil squishee

Maybe my net-etiquette is not up to standards or perhaps I feel there is little time for net-manners now

Perhaps it is the norse blood that flows within my veins just waiting for chaos to rule over the earth once again!! muahahahahah

If Rockdoc was unaware that Al Naimi stated "12-15 mbpd for 20 to 50 years!" then I believe he has his head to close to the desk/moniter and needs to take a break ..... heh heh
Turn the lights on, open some windows and get some fresh air in here!

Believe it or not I am watching AND considering every word that comes from Rockdoc, Bobbyboy et al.. keyboard.

Rockdoc makes the best charts - don't he!

When a rook like me knows more about SA's PR campaign then the guy who makes it his life/hobby/pastime etc to know more about SA then the rest of us - well frankly......... it fucking worries me!!!!

At this point in the game there is nothing more important then what SA does and says.

RD knows what they do but doesnt listen to what they say?? seems odd dont it??

I gaurantee Matt simmons has read that article!!!
Honest I could not help myself with that one heh heh

OK lets play a game.
Its called "lets believe that everything SA has ever said were true".
Change all the numbers to reflect SA's new 400 billion barrel reserve.
OK Rockdoc goes first...........
Rockdoc???
With 400 bbpr when does SA peak? (jeopardy music)

Because everyone now knows that - sing along - "when SA peaks - the world peaks" (audience applauds)

Now you are telling me that the addition of Water and gas storage tanks is not directly related to advanced recovery technology? (audience boo's)

Advanced recovery IS water and gas injection - water and gas tanks??? no correlation?? ok whatever. (audience sighs)

Guess I may have stretched the definition to suit my "agenda" (audience laughs)

Ok guys - all I am saying is......at the same time these people had the gonads to stand up and say their reserves were now 400 bb like it was the good ole' days - they also had the intestinal fortitude to state that they could produce 12-15 mbpd for 50 years. (audience is silent)

I think that kind of statement and all those of SA oil history should be taken into consideration and a revised REAL WORLD reserve estimate established

Please RD............Make us some charts that show SA with a 100 BB reserve to offset the possibility of what is probably one of the most important "lies" of the oil age namely SA reserve numbers.

It seems that we have mother nature to thank for delaying the inevitable conclusion of this fascinating real life drama just a little bit longer before the complete unfolding.
Thanks mom but the suspense is killing us!!!

Seahorse....
You think this guy RD can defend himself maybe?;-)

on the "can SA goto 15?" question.... yeah we are pretty much all in agreeance that for this to happen SA would have to invest alot and that they could not do this now which directly contradicts one of their BIGGEST talking heads and his statement made in 04'.

If a 1.5 mbpd demand increase is realized as estimated by the EIA then we will test the 11 mbpd mark this year and next year we will test the 12.5 to 13 mbpd mark....that is....as long as the ancient demon named DEMAND does not return to full power......

I am sure that when these events occur RD will be here explaining it and I will be here nagging him via sat link from an undisclosed bunker complex.............who's paranoid!?!??!?

I hope everyone has as much fun reading this as I did writing it.
Good night and good luck

notwithstanding the rest of your rather obtuse blather this is undoubtedly the least informed statement I have seen regarding oil and gas extraction.

What exactly do you think we have been doing with produced water and gas over the past several decades? Gas separation, water knockout, sulphur removal etc. are not "advanced technology" they have been used in every pool that has natural water drive, gas cap, high GOR or later if they are put on water injection for a number of decades. Adding additional separation capacity has zilch to do with "advanced technology". In fact the separation units and technology used today is quite similar to those used 15 or more years ago....little tweaks here and there...some changes in overall setup of number of separation units and how they are linked but basically not new technology. It is standard.



And as I asked before what is your proof that they are lying? As I've said the numbers put out by Aramco make sense when you consider what is proven producing, proven non-producing, probable and possible. The wild card that comes into play with the 400 billion barrel number is what is left to be found (this number is the one the USGS uses so you can't blame the Saudis). The Saudis have done virtually no oil exploration in the past 10 years.....what wells they did drill resulted in a string of discoveries of super light oil SW of Ghawar on the fringe of the Rub Al Khali. The Rub itself is relatively undrilled....I suspect it is mainly gas prone but there is still possibility of light oil around the flanks of the basin. We will shortly see how this pans out as drilling for gas reserves by CNOC and Russian interests in the Rub Al Khali is progressing. According to the WoodMac analysis S. Arabia using just the P1 and P2 reserves ends up with a peak around 2015....if you assume the P3 is somewhere between the 70 BB technical reserve number that WoodMac uses and the 110 -140 BB barrel number I've seen mentioned elsewhere as additional possible reserves then that peak could be extended for a number of years, assuming they are able to bring all of those reserves onstream economically. Extending the peak any further requires considerable efforts in exploration and a lot of success. Currently there isn't a lot of incentive for the Saudis to explore....they can deal with current capacity increase necessities through facility upgrades and infill drilling.

Rockdoc says "notwithstanding the rest of your rather obtuse blather this is undoubtedly the least informed statement I have seen regarding oil and gas extraction."

Sir,You need to get out more often

Oh well from what I have been reading gas and water injection is pretty much the best tech we have come up with besides maybe horizontal drilling for a very long time.
We may have some new tricks for finding oil but the state of the art in production is water and gas injection.

See now - this is more what I was referring to.

A complete disconnect with reality.
Bushco and SA are in bed my man.
If you cannot see that then you are blind.

Do not blame the Saud's blame USGS ?
Why not ??? when they are both one in the same at the highest levels.
USGS did not tell the Saud's "You have way more oil then those idiot american and brits think you have now go tell everyone".

You see our "brave leader" hard pressed to open up ANWR yet you do not think he would have the Saud's out looking for oil if it was there to be found?

They would be packing barrels on the back of camels if BUSHCO so desired.

I believe that there is little if any left to be found and I am certainly not alone here.
Thankfully someone besides yourself has also looked hard at the data and came to a completely different conclusion.
The worst part about the whole fucked up thing is that:
Simmons is an optomist!!!

I have one question for you - a theory that has been floated concerning depletion rates.

If, through the use of technology - namely water and gas cut, the peak in SA production not the midpoint of SA hydrocarbon depletion but the peak in SA production could be reached well after the "peak" or midpoint of reserves is reached.
So by the time we see SA decline it will be well past SA true peak.

Considering the current state of petroleum technology - Does this statement have any validity in your opinion?

Could SA be at 60% or even 70% depletion before we see production decline?

I am a glutton for punishment thus I shall return

I am talking about oil and water separation ...not injection. Because of increased water and gas production they need to increase handling capacity which means more separation....nothing to do with new technology. You could accomplish this by installing WOGS facilites that are twenty years old and achieve the same goals....you would just be in for a lot more maintainence. By the way injecting water and gas is also very old technology....sixties. There are some new twists to injection that have come about in the last 10 years (injecting from horizontal wells, water blocking polymers, WAG etc.) but the underlying technology is the same.



Saudi Arabia is a soverign nation....they manage their own oil and gas expenditures. Occassionally they will submit to US requests when it suits them (increasing production did because they could do so and the demand at the time did not mean it would drop prices). For the most part when they are required to act on behalf of OPEC to keep prices from dropping they have largely ignored US demands to increase production. The Saudis finance most of the US debt through direct or indirect investment.....you can't threaten them without cutting your own neck. As to ANWR .....Bush has tried to open it up but it keeps getting defeated by Senate, largely from the Democrat side I believe. As well there is no guaranty that Saudi would sell the US their oil. They will sell to the person who pays the most and where their own costs are kept at a minimum. This can just as easily be India or China as the US.



I see....and you are an authority on exploration potential?? And exactly who else are you suggesting has looked at Saudi in detail? Campbell with his limited access to information (using an IHS database that is about 10 years out of date)? Simmons who is a financial banker and wouldn't know a seismic line from a pencil sharpener?



Of course this is possible. The common fallacy amoungst many on this board is that peak production equates to the point at which half the oil has been produced. This only happens in fields which are allowed to produce at maximum rate.....in practice no one ever does this except for small fields that have strong water drives. Instead operators manage production to levels that meet economic, surface facility and governmental constraints. So rather than a sharp peak one would normally see a long plateau for most fields. The rate of dropoff is largely constrained by water/gas handling capacity and economics...at some point it isn't worth putting more money in but rather let the pool produce until you are past economic limit.

If you are inferring this means that Saudi will suddenly decline that notion doesn't jive with the reserves figures that Aramco have stated are arrived at under SPE/AAPG and SEC guidelines. For proven reserves that number should be 90% confidence level which means they are close to half-life, but in terms of probable and possible reserves this isn't the case at all.

again this comes back to you have to believe the Saudis are lying and as I've said that is simply conjecture with no proof. In fact I have a hard time imagining how saying they have more than they do if, in fact they are the worlds swing producer , serves to benefit them. By saying they have less and that their fields are on depletion prices would rise and their netbacks would as well. There is no current alternative that can replace oil effectively in the foreseeable future...SA would benefit from high prices for 10 or 20 years, past the lifespan of much of the royal family.

You were going well until here. Firstly I don't appreciate someone selling themselves as an authority on SA Oil production when some newb just joins the conversations and shows you evidence you haven't seen before.

Secondly by not telling people the truth about the real amount of oil left it means they will maximize their profits by ensuring no alternatives replace them. If they had of said 50 years ago "Shit in 50 years we will almost be empty" then 50 years ago a lot more alternatives would most likely have been developed.

Before you say something like this maybe you should give yourself 5 minutes to think about WHY lying to people would benefit Saudi Arabia. They will keep lying until they are on the decrease at which point they will then maximize their winfall from the panic buying. Since they are almost empty they have got all the money they can from it, it's a smart move.

If their exploration potential was so wonderful then why haven't they found anything of note since the 1980's ? If the country was virgin territory you would be right to be sceptical of claims that most has been found, but as Twighlight in the desert shows there has been a hell of a lot of exploration in SA for ever dimminshing returns.

Campbell too doesn't need to take a drilling rig out to SA to have a good idea of whats left to find - most of the new discoveries apart from the Hawtah trend has just been linked to old fields sharing the same source rocks as Ghawar. The statistics do tell a pretty convincing story here.

The fantastic source rocks that provided SA with Ghawar don't cover the whole country and what they do cover has been extensively explored. To get big new discoveries now would involve finding a whole new petroleum system and while that is possible its also very unlikely. I believe they have a couple of areas left to look (one the size of california), but they've so far found a lot of barren land.





There were hearings in congress asking just that question about the big oils handling of SA's oil resources - did they overproduce ? Who knows. But they did have oil fields with great water drives, even SA now admits the best portion of Ghawar is in decline, the big question is whether the rest of the field can make up for it.

I would agree though that their peak in production will probally only be seen when they have gone maybe to 55-60% of their total production,

And seeing the experiences from places like Prudoe bay I'd be surprised if SA could keep their depletion rate under 6% once they do peak.



Their figures quite frankly stink, no western company would get away with posting the same reserve numbers for 10-20 years in a row with their production levels. Aramco might say they conform to SEC guidelines, but since there is no third party verification thats a promise thats not even worth writing down.

When they have 5 million barrels a day being extracted from just one field there is a big chance that their production really could go downhill fast.

Seeing the purchases they have been making in the last few years and their rigs counts and its clear that there is some major work going on over there. It does bother me that their rig counts have been increasing fast, but they are bringing new fields (and portions of) online in order, its still unknown though the actual level of depletion in production they are having to deal with.



The alternative to them lying is to believe that they have kept level oil reserves for 20 or so years ? I would go with Colin Campbell's guess that these are the original "ultimate" reserves, if so then we are close to half way now, and as the late Buzz Ivanhoe originally put it - you cannot produce more then you have found it seems like SA is currently struggling to do just that. I went over through his old 1996 newsletters and his plots still describe todays situation very well.

They do have something to lose by saying they are declining - if the markets panicked and cause an economic slump when the world pumps 84 million barrels a day a small drop in consumption during a worldwide recession can quite easily turn a tight oil market into a flooded one - if there were 3-5 million barrels of oil going unwanted on the market then then the prices would really collapse.

Indeed. The way I see it, the further after the halfway point that peak happens, the steeper the decline must be. After all, at the extreme, if peak happens at 100% of URR, the decline rate will be 100%. If they do manage to hold declines to modest levels for a while the decline rate will quickly accelerate at some point. This will just make the situation worse and the ultimate collapse quicker.

Tony

Polestar said:


And what evidence are you talking about here?? Be a bit more specific. If you are refering to Neopo he is hardly a newbie.



As I said it isn't like we are going to suddenly go from an oil economy to a no oil economy....it is impossible for alternatives to completely replace oil and gas over the next decade if not two decades and the Saudis know this from experience (the last oil shock). If they announced tomorrow they were past peak in all their fields would we suddenly stop buying Saudi oil? would we be able to replace that oil with alternatives over the next decade or likely two decades....indeed the only thing that would happen is the price of oil would rise as the market panics and people would start to conserve a bit more....work on alternatives a bit more etc....but the overall decrease in demand would be balanced by the look forward supply adjustment. No matter what happens the Saudis win....it doesn't make a lot of sense they would see advantage to lying unless you believe alternatives can completely replace their product in a short time span.

Eddie Lomax said:



Well sorry, but this is another case where Simmons claims are not backed up by the data. Since the 1980's Aramco has done very little exploration drilling. I pointed out in a previous post on this thread that in the Rub Al Khali there are a total of 15 - 20 wells drilled in an area in excess of 350,000 square miles, most of which were drilled prior to 1975. From 1980 - 2004 there was almost no drilling in the area excluding the northwestern flank where superlight oil was found in a number of fields. A lone well drilled in the middle of the Rub in 2002 (Takhman-1) encountered Jurassic oil (about 350 MMB OOIP) which suggests the area has been underexplored. The Saudis have not been doing exploration simply because they did not have to. Up until this last year they have always had spare capacity and were able to act as swing producer...why drill exploration wells when your discoveries are going to just sit in the ground for the foreseeable future, this doesn't make economic sense. The drilling stats from 1990 to present tell the story...during that period the Saudis drilled 2013 development wells and 40 new field wildcat exploration wells....that means only about 1% of all wells drilled were exploration wells.



This is patently incorrect. There are a number of source rocks which have been shown to have produced hydrocarbons in S.Arabia: Silurian Qalibah Fm, Devonian Jauf Fm, Permo-Carb Unayzah Fm, Permian Khuff Fm., Jurassic Tuwaiq Mtn Fm, Jurassic Hanifa, Jurassic Dhurma Fm., Cretaceous Kazdhumi Fm. The Hanifa is present throughout most of S.A (at least 90% from the maps I've seen) and although it is overmature in certain areas presently it was oil mature at one time or another throughout the entirety of its distribution. Some of these source rocks such as the Silurian are presently mainly gas prone but do have areas that are still oil prone and, again had to have passed throught the oil generation window at one time or another. One would be very hard pressed to find some spot in S.Arabia where at least one if not several petroleum systems were active. I think you should have a look at the USGS bulletin 2202-H which describes the various petroleum systems in detail.

Please provide that quote. The presentation material shown earlier in this thread which was made by Aramco suggests Ghawar is not in decline.



Well I disagree..it wasn't until a couple of years ago that third party reserve evaluations were required. For decades western companies reported reserves that were internally derived with no outside varification. And during that entire period those companies either increased reserves or at the very least completely replaced their production. In the US much of this was through reserve adjustments. With the exception of Shell the majority of those reserve assessments have stood up to the test of time. So why is it that the Saudis need to be held to a different standard?



This doesn't follow logically. It is all based on what is left in the ground and what economic rate it can be produced at. Based on the 2P from IHS Energy for Ghawar 5 MMB a day ends up being a depletion rate around 3% per annum. That in itself is not a number one should be concerned about.



Again why is this not possible? Reserve growth through moving P3 to P2 and P2 to P1 is entirely possible. This is largely how oil companies can replace production without making large discoveries year on year.



Though granted a possible scenario, Opec could currently easily drop production back to levels of a few years ago and handle anything but a very major worldwide depression and considerable demand destruction. Also you need to remember that lifting costs in S.Arabia are the lowest in the world....they still make a ton of money at $10/bbl oil. I suspect the Saudis might actually like to see prices collapse down to the $30/bbl range for awhile in order to take the expensive oil projects out of the market and hence increase their market share.

As I said, if 50 years ago they told everyone their REAL peak/near end of oil in 50 years, then we would have started preparing better for a no oil future. If you want to debate this , do so.

If they announce tomorrow (2006) that they have peaked, of course people will keep buying their oil, as people would have 50 years ago if they announced it. My point is 50 years ago if something was done about the oil situation (ethanol, etc) then 40 years ago Saudi's exports most likely would have dropped, as well as the price of oil. What does lower demand and lower price for oil do to a country which predominantly exports oil?

No, you're right rockdoc, there is no reason at all why they would lie, doesn't benefit them one bit.

and


There was that opportunity....we had the serious oil spike in the seventies....did the US run out and come up with alternatives? No. You forget that the problem we are in now is more out of control, ever-increasing demand driven (Asia demand is now almost as important as the US). Forty years ago even if the reserve numbers Campbell uses were right, at the demand levels of the time and projections for increasing demand there would have been no impetous to move over to alternatives...view would have been "we have enough oil for the foreseeable future". Low oil prices mean there is little push on people to move to alternatives...which is really why we are in the dilemma we are in.....adicted to cheap oil.

An oil spike is an oil spike, nothing more nothing less. It isn't Saudi Arabia and other major oil countries going "We're going to be out of oil soon". A few years ago Saudi Arabia said there was enough oil at current output levels to last 100's of years. Certainly gives a false sense of security.

Hi!

I've been reading this thread with great interest, but have seen little new info here in the recent days.

Could this be relevant to the big picture ?

"Shipments of crude oil from the Organization of Petroleum Exporting Countries will probably fall 0.3 percent to 24.88 million barrels a day in the four weeks to April 8, compared with the previous four weeks, because of a decline in production from the group, the consulting company Oil Movements said in a report on March 23."


Source:

http://www.thestandard.com.hk/news_deta ... r=20060403

and

"But demand for the world's premiere source of energy is rising so fast by about 2 million barrels per day each year that even Saudi Arabia's vast resources will be unable to cope without drastic help, oil executives and analysts say.

Remarkably, even Saudis, who control over a quarter of the world's known oil, are calling for relief from relentless consumption."

Sources:

http://www.gulfnews.com/business/Oil_an ... 30687.html

and

http://www.khaleejtimes.com/DisplayArti ... middleeast


I also read in this article(?) yesterday, reffering that this was due to increased water-cuts that had to be stabilized. This seems to be no longer part of this story(!). How can SA have capasityproblems at this point. Please enlighten me on this.

A.D.

Norway

I am somewhat dubious of what the Saudi's PR campaign says. Having followed the ups and downs of the oil markets for the last few years, I have concluded that the Saudi/Arabic paradigm is resistant to any kind of true openess. As Matt Simmons has said, all they have to do is open the books, and a dozen analysts working for one week could ascertain when the Saudi peak will occur. The debate would be OVER, but their(Saudi's) silence is deafening.

On another note, former Saudi oil minister Yamini sees the end of the oil era, to be replaced by a hydrogen economy. Hydrogen!!! Is he kidding us?! We are nowhere near , and may never be, to a workable hydrogen economy. Fuel Cells= Fool Cells. It points out the massive amount of ignorance by those in power.
http://www.financialexpress.com/fe_full ... _id=121457


By the way, this has been an awesome thread.