Yes if you take Aramco's rhetoric at face value that is a perfectly plausible explanation. I would suggest to you that it is wrong to do so. Saudi's claim to "significantly increase production" is a mere statement on their part that is consistent with Arab culture to make exaggerate claims where they know very well they cannot be delivered. Hence a misunderstanding on the part of western interpreters such as yourself. Of course there are differences between Arab subgroups but there are general observations that can be made. See the 1973 classic "The Arab Mind" (a flawed western interpretation) by Raphael Patai for more, Amazon.

I'll agree that one possible scenario is that they are exaggerating. But at the same time it smacks of arrogance to claim that is the only possibility. Here’s an analogy: You and your boss have a very heated disagreement at work. Two weeks later your Dr. tells you that you have a rare disease which will require 6 months of bed rest. Unfortunately there are no obvious symptoms. When you tell your boss you need 6 months of sick leave he says you’re full of shit and that you’re just making it up. What’s your reaction likely to be? “What a presumptuous ass!” is the most likely response. “Where do they get off telling me what’s going on with me when I’m the one who has the information and they don’t!” If the Saudi’s are being upfront, I’m sure this is exactly how they feel.

The Saudi’s aren’t idiots. Out-and-out lieing that they can ramp up the way they say they will goes against the long standing personal relationships that they have with Bush&Co. (Not to mention it goes against Islam) It would also be highly irresponsible because they’d get “liberated” toot-sweet once the cat is out of the bag.

In such situations I look hard for moderates, such as Al-Husseini who blast BOTH sides of the debate. He says that anyone (such as the EIA) who claims that Saudi Arabia can produce more than 15mbpd, or that they can sustain 15mbpd for decades, are idiots. He also eloquently defends the position that the Saudi’s haven’t (yet) overproduced and/or damaged their wells and that they can indeed hit 15mbpd.

IMO, I think you’re reaching for the answer which best fits your bias.

I'm with you FatherofTwo....there is a huge difference between ignoring statements such as " we have enough oil for hundreds of years" versus statements such as "we plan to drill X number of wells to ramp up production in Shaybah to 800,000 bopd...this will require a capital expenditure of X over X years". If you say the latter is just Arabian hubris then you pretty much have to write off most of the worldwide production that goes into all of the forecasts including IHS, WoodMac and CERI since these are based primarily on what companies say they are planning to do.
And this whole idea of there being some kind of common "Arab mind" might have held true when Arabists such as Burton were mucking about in the Gulf but today the vast majority of the elite in the oil and gas industry from Saudi, UAE, Qatar, Kuwait and Iran have western educations and think like businessmen first and foremost. They understand the realities...if you have ever had the chance to see Al Naimi or the Aramco folks present in public or chat with them behind the scenes this comes across loud and clear. There are definitely games played with reserves...it is not that uncommon in other places as well...but it does not follow that the Saudis are lying about everything.

You have misunderstood my position. The Saudi exaggeration is primarily a result of the arab language's syntax. Read up on Chomsky and the Sapir-Whorf hypothesis on how language can influence one's way of thinking. Al-Naimi and co are PR men (professional liars). They do not consciously believe Ghawar's production is about to fall off a cliff, they would have to be sociopaths to come out with their claims and believe such a scenario. Rather the actions that Aramco are taking is primarly driven by unknown technical people within Aramco. Watch what they are doing more than what they are saying.



Al-Husseini viewpoint is nearer the truth than Al-Naimi. However he is an optimist on the technology being used and does not believe that fields can be rate sensitive and thus be overproduced as Ghawar and co have been.



Who doesn't?



Yes those forecasts are flawed as they take what companies say at face value - not sensible. That is not to say some fields can't increase production. Shaybah's production for example can be ramped up to 800kbd it just won't be sustainable for as long as they claim.



Strawman, of course the Saudis are not lying intentional about everything, its more a case of what they are not telling the world that is more a cause for concern. Yes many of the executives in Middle Eastern national oil companies are western educated(Al-Naimi has a MSc in Geology from Stanford for example). They still have an Arab mindset and see my reply to FatherOfTwo on the effect language has on one's thinking. Additionally I would add that it is in their best interests (improving inclusive fit) to act as they are doing (same for all businessmen) I wouldn't expect anything less .

I agree, actions speak louder than words. Only time will tell if the massive activity they are undertaking will ultimately only help with the depletion and not allow them to go above 9mbpd. However, it is a mighty coincidence, don't you think, that this massive effort to increase production comes after they’ve stated they are going to increase production to 12.5mbpd by 2009. If all this activity was only depletion related, they likely wouldn’t have left such a massive rollout for so late in the game. Demand has caught them by surprise, and they are scrambling to make sure the price doesn't get away from them, ultimately leading to less demand for their oil. I just don't buy your argument, there is too much evidence against it.



His words prove otherwise, and as such I don’t think it’s correct to classify him as an optimist. I’d say realist. Al-Husseini said:

emphasis added by me.

I agree Ghawar is best looked at region by region. The oldest part, Ain Dar/Shedgun, appears to have a low depletion rate even assuming a conservative URR.

Whats your source for Ghawar producing 6.5mb/d in 1990? According to Greg Croft it peaked at 5.7mb/d in 1981. Production fell afterwards in the early 80s when demand for OPEC oil crashed.



http://www.gregcroft.com/ghawar.ivnu

Also you say 5.3mb/d was taken from the productive areas of only 20Gb...Ain Dar/Shedgum have already produced 27Gb, and peaked at about 2.5mb/d in 1981.

Calculating depletion rates on the new fields requires accepting Aramco's claims, but the cumulative doesnt lie...much. Ghawar as a whole has produced around 55Gb...assuming very conservative URR of 70Gb gives a max depletion rate of 3%/year. Ain Dar and Shedgum appear to have been produced at around 2.6%/year assuming 35Gb URR (conservative again).

Here's a interesting document from the USGS. It goes into mind-numbing detail on the geology of the Ghawar region, and explains the USGS technique of estimating undiscovered oil there. Maps galore.

http://pubs.usgs.gov/bul/b2202-h/

There is also another one at the USGS site that deals specifically with yet to find in the other areas of Saudi including the Rub Al Khali.

Note if you take the numbers at face value it all adds up to numbers that aren't all that far out of line with what the Saudis are saying about yet to find. ...even moreso if you add the USGS predictions for the Red Sea (Saudis include this in their estimate of the 200 GB yet to find).

If you do read this remember they are talking mainly about resources not yet discovered.

Its a perfect PR cover and has many fooled, simple as that. The real reason that they have some fields with decent OOIP such as Shaybah, Khurais, Abu Saafa and Qatif that have barely produced is that production is difficult from these fields and conseqeuntly RF will be much lower than the big five (Ghawar, Safaniya, Abqaiq, Berri and Zuluf). If you were a Saudi Aramco executive and your bonus was dependent on increasing production wouldn't you go for the easier to extract high flow rate oil not the difficult to produce stuff; I know what I would do and so do you.



Saudi Aramco themselves:
Adam Porter

Clearly we can see Al-Husseini is even more optimistic than Aramco themselves - he is not a realist by any stretch of the imagination. As for your emphasis you have misinterpreted what he has said. He is saying that technology is needed to increase RF and thus maximise cumulative production not an admission of rate sensitivity.

Simmons in 2001:

The World's Giant Oilfields

As for Samotlor:

Science Daily




You have misread what i wrote look back I said:


I.E. yet to produce which is how depletion rates are calculated. As for the 1981 production number that was lower than production in 1990 and you need to include North Uthmaniyah as well.



See above on yet to produce not URR for depletion rates calculations. Indeed cumulative production claims are nearer the mark than reserve numbers but see page 9 of this Simmons presentation on how nobody can agree on production numbers not a surprise since the "official" production statistics are fictitious.
Simmons:

Hudson Institute Transcript

Take the numbers at face value? That is not a sensible thing to do. Not a single 500 million barrel (in URR terms) oil field has been discovered worldwide since 2002. I wouldn't put too much hope on new discoveries of any significant size in Saudi Arabia or the rest of the world for that matter. If you read chapter 3 of Deffeyes' Beyond Oil you will find that 95% of the world's oil reserves have already been discovered according to the analysis presented there.

you have to remember they are referring to oil in place no mention of geologic risk nor the timeframe to discovery, I also mentioned that I did not take their numbers at face value. I haven't read Deffeyes book in it's entirety.....but what I have noticed from material that is often presented by those who want to prove a point one way or another is they either have no idea of whether they are plotting up reserves or resources and whether or not they are looking at P1, P1 +P2 or P1+P2+P3. Creaming curve analysis is really only relevant when it addresses OOIP. In a presentation that Al Niami made last year he emphasized that the ~200 GB figure was proven (he also said this was based on SPE classification which means there is a 90% probability it will be produced) and that there was another 100 GB in probable and possible category (unrisked) that could be potentially recovered through infill drilling, additional lateral extensions and eventual improvements in water handling capacity. I have seen the ~200GB number treated as P1+P2+P3 by various folks in their depletion analysis.
Since you are obviously an expert in this field perhaps you can explain how the USGS analysis is inferior to that done by folks like Campbell and Deffeyes?

Of course I agree, we all go after the easy stuff first. The difficult stuff will be more expensive and harder to get at, but that is not sufficient in and of itself to say production can't be increased. Do you agree?



Well, you’re quoting one analyst in the US. I could probably find other analysts who say otherwise, and we’re back to square one. Maybe I am missing some of the finer details of the language selection. I don’t know, I’ve read over it several times and it seems pretty unambiguous to me.

I think I understand what you are stating; correct me if I mischaracterize. You’re of the opinion that the stuff they will now be going after will be harder to get out of the ground. Therefore, they will use as much technology as they can to get rates comparable to what they’ve had in the past with the easy flowing stuff.

That’s all fine and dandy but when I read Al-Husseini’s statements I see him specifically addressing all of the negative talking points head on. He talks about the requirements of “sustaining such an elevated rate of production for decades” and that it must be managed by many specialists in order to “avoid undermining the available reserves base through inadequate reservoir management”. That to me sounds like they are well aware that they don't want to sacrifice long term production totals for high short term production rates.

I'm seeing a big disconnect between his statement and yours.

Dunno, I’m no expert and my head is starting to hurt.

USGS analysis inferior to Campbell and Deffeyes? Surely not! :

Remember they are a politically influenced organisation. They have to come up with analysis that people want to hear and that politicians can use to lie to the public. For example in their oft-quoted 2000 analysis they incorporated "non-technical factors" into their discovery projections i.e. they fudged it intentionally. In the 1950s and 1960s they told the politicians what they wanted to hear i.e US-48 URR at 550 billion barrels not the 150-200 Hubbert was stating.

As for Campbell and Deffeyes yes their analysis is more on the mark not that there aren't flaws in their approaches. Lets start with Campbell. Here is the much published ASPO graph that he is primarily involved in:
http://www.peakoil.net/uhdsg/2004Scenario.jpg

The methodology is to do a country by country assessment and aggregate to get the world view. He takes the official data, chops bits off reserve estimates where he thinks they are overstated eg 144 billion barrels remaining reserves for Saudi Arabia not the official 260 figure. He places the countries into one of three groups and models them separately (those that have peaked will decline at current depletion rate, those that have yet to peak will increase at a rate of 0-5% until peak and middle east OPEC modelled arbitrarily). It produces a shallow decline rate of 2.5% which is based on the US experience. Thus he comes out with the above graph. There are several criticisms I would make of this approach. Firstly the decline rate is too shallow, he has extrapolated the US experience to the world not taking into account the effects of technology that mean a steeper upslope and downslope (Hubbert made the same error by the way). Secondly he assumes that production peaks at midpoint of URR this is incorrect it assumes symmetry on the up and downslope which is rare. Thirdly he is optimistic on the existing remaining reserves which in the last update were put at 775 billion barrels for regular oil (this is about 300 too high, Saudi alone is 100 of this). Fourthly he is too optimistic on future discoveries which he puts at 150 billion barrels (about 120 too high). 98% of the world's oil reserves have already been discovered, the large oil companies lose money on exploration (see Wood Mackenzie report) and are buying back their stock in record amounts. Exxon's RRR for oil last year was just 3%! These catologues of errors mean all liquids production in 2030 is estimated at 60mbd; far too high Simmons puts it at 10-20mbd.
Deffeyes methods are directly based on those of Hubbert. Chapter 3 in Beyond Oil uses a simplified version of Hubbert's 1982 method (different from his graphical 1956 method). The beauty of this method is that you do not have to go through the long and arduous process of estimating reserves, you instead infer it from previous production. Here are two extracts from Chapter 3:


This method gives world URR of just over 2000 billion barrels with a peak at Thanksgivings Day 2005 plus/minus three weeks. Production in 2019 is estimated at 90% of the peak giving a decline rate of 1% - far too low (essentially giving a plateau). This is no doubt based on the US experience where the first 15 year post peak were a bumpy plateau due to Alaska. Deffeyes is thus an optimist despite his four horseman of the apocalypse show.
Both Campbell and Deffeyes use flawed methods because they have a political agenda eg Rimini Protocol. If they were more realistic on the decline rates they would have a harder time pushing their agenda. By the way I agree with you on your creaming curve point.

Yes but Saudi Arabia have already admitted their giant producing fields had peaked back in 2003. From one of my earlier posts:



Looking at the evidence in aggregate supports my position, is this not clear enough yet?



Sorry to hear this is doing your head in. There is a lot of misinformation/disinformation out there that leads to great confusion. The 0.8mbd best case scenario is not Coxe's opinion it is based on what Aramco have admitted its just that nobody publicly put two and two together until April this year on those figures. Your characterisation of my opinion is broadly correct with the caveat that production rates will not be sustainable for more than few years before declining sharply (double figures). As for Al-Husseini, in a email exchange with ASPO-USA:
Energy Bulletin

The point is that Al-Husseini is optimistic that technology is able to maintian current flow rates (plateauing) not that it can lead to steep declines if mismanaged.