I have seen this posted a thousand times by Simmons, Campbell etc. but there is no comment made about the possibility that OPEC may actually have changed the rules on what they recognized as reserves. For instance if the Saudis had been merrily going along assuming an ultimate recovery factor on average of 20% and then they found that low and behold the water flood was working better than assumed and now with the advent of software to achieve reservoir modeling they can suddenly up the recovery factor to 40%, in effect doubling their reserves. Whether or not that is the case when it is all said and done you are guessing and there is no factual basis for your estimates anymoreso than the numbers released by the Saudis. Perhaps you may end up being correct but there is no evidence of that.



Why is that best?....indeed you leave out any improvements in recovery or even the possibility that what was being reported was proven, developed reserves and not proven + probable + possible. As an example up until about a year or so ago the recoverable reserves reported for Shaybah were about 7 billion barrels and now with the success of their long reach horizontals in the Shuaiba they are suggesting close to 16 billion barrels. I imagine that back in 1990 Aramco never imagined they would eventually get 73% recovery from Abqaiq and no doubt were running with a number closer to conventional water drive reservoirs of under 50%. Aramco made a statement about a year or so ago to the effect that the 260 billion barrels of reserves were proved reserves and also indicated they were determined using the SPE, AAPG guidelines. They also mentioned there was an incremental 103 billion barrels of probable and possible reserves. Of course a portion of that probable will never be realized and a big portion of the possible will never be realized but some of it should be and will simply be due to increasing recovery factors.

I would also point out that the over emphasise on the Saudis having destroyed their fields by overproduction is not borne out by the current production as shown in the Aramco presentation. Of course you can choose to say...they just cooked this up but that requires preconceived views without evidence.

The Saudis do not provide supporting information on their reserves which requires that we be somewhat critical of what they say but it does not give us carte blanche to throw the baby out with the bath water. Perhaps we should go back to looking at hard evidence, indicating the source of the information, without making judgement on whether it is right or wrong?

So we should let the arabs speak for themselves then...........and what do they have to say one might ponder.....
Saudi Oil Is Secure and Plentiful, Say Officials

"Naimi said Saudi Arabia is committed to sustaining the average price of $25 per barrel set by the Organization of the Petroleum Exporting Countries. He said prices should never increase to more than $28 or drop under $22. "
Right right - I wonder if this guy has had a chance to talk to the "read my lips/no new taxes" guy?
He should be working on his resume because I believe his time as "seer of the future" is nearing completion.

The proper thing to do with uncertain data is to present your conclusions including the error margin. Trying to apply best judgement to divine the true picture is just stupid. This assumes that you can somehow compensate for bad data by logical thinking. You can't. It just becomes a silly pissing contest over who has the better guesswork.

If you are going to analyse these things, calculate the best case and worst case and present the range, or put error bars on your conclusions. Preferably, calculate some probability distributions around your numbers. Given the Saudi data, I would not be surprised to find all of the guesses fall in the same probability range.

I have to say that unfortunately this is the ultimate conclusion, because we simply don't have enough good data to come up with more precise predictions. This is also why Rockdoc's theory that the Saudis may have just redefined their reserves in light of new recovery advances seems just as likely as Simmons' conclusion that the Saudis are being disingenuous, although it is also true they have a motive to do so. It's also troubling that reserves magically increase, apparently, without any depletion. We're still left with an unacceptably large (in my view) margin of error. Simmons' suggestion that all producers become transparent really resonates at this point.

Im willing to make a production and peak graph if bobby is willing to give me his estimates for these streams, Either per country or for the entire world. (entire world would be easier for both of us :D)

Decline rates (Total Gross world decline rate from current production and future increase in gross world decline rate)

Amount of discoveries (and likely distribution) either in reserve numbers or in production numbers
Amount of production (or reserves) from the existing reserve base (old oil fields not yet on-stream
Amount of production from unconventional oil (tar-sands/orinoco/oil shale)
Amount of production due to reserve growth (in other words technology, new insights and that sort of stuff)

New technologies such as advanced reservoir modelling developed in 1990s, reserve revisions occured in 1980s. Think about it! .The numbers in 1980 were in some cases understatements (eg Iraq) and in other cases overstatements (eg Saudi Arabia). There was no changing of what is recognised as reserves; the numbers they claim are figments of their imagination and have no basis in reality. You can't just magically double your reserves due to waterflooding, it does increase URR for a few fields but in others it decreases URR; your hypothesis is false. The Saudis have a political imperative to lie about their reserves; that is the nature of the institution that is OPEC which is nothing more than a PR show to keep the uninformed in the dark as to the true extent of the oil situation. Yes we cannot have definitive proof of anything but to give the Saudis the credibility you do is dangerous to say the least; they simply assume their numbers:





Simmons Interview

And before you say "no numbers to do huh? what about your numbers?" My analysis is based on completely different methods to Economides and Aramco, that statement is not applicable in the sense it is in that context. Of course it is not definitive proof either.



The 1980 figures are simply more accurate as to the state of the reserve situation than the unjustifiable increases witnessed in the 1980s. Reserve growth as I have pointed out in previous posts in this thread is a statistical fiction until you can remove that from your way of thinking you will have trouble understanding the picture painted before your very eyes. Shaybah is very similar to Yibal, it only has 16 billion barrels of OOIP they will not get URR of 16 billion barrels more likely 2 billion barrels and remember what happened to Yibal: 90% production decline in 6 years with the best technology that they are using at Shaybah; don't be surprised when the same collapse happens there if they are not careful.



We've gone over this before you don't have to take my word for it:




Hard evidence you ask for! . Why do you think the Saudis are not providing such evidence in the first place? You will never get hard evidence from this issue it is simply not in their interests to disclose; the game would be up i.e. OPEC would be found to be nothing more than the talking shop it has become, not to mention that the geopolitical and economic fallout doesn't bear thinking about .

Your way out here, read the thread in its entirety. The Saudis claim 260 billion barrels of remaining reserves I say 45 billion barrels no sensible probability range is going to encompass that.



See my reply to rockdoc for why his hypothesis is incorrect. The "unacceptably large margin of error" is the giveaway that they are lying. As for your "ultimate conclusion" I have to disagree we do have evidence to work with eg Simmons' Saudi investigations (SPE papers), steep decline rates eg Yibal, Indonesia etc, reservoir damage widespread in Saudi Arabia, Russia, Iraq etc; there is plenty if you research the issues.

from your posts here I assume you are neither a reservoir engineer or geologist, you simply do not understand reserve revisions and how waterfloods work. I have been involved in many waterflood schemes...some worked extremely well others did not as well but not one ruined the reservoir....if you think there is some way that can happen please explain. As well it can simply just be moving P2 to P1.


I'm sorry but your ranting about the Saudis does considerable discredit to any of the numbers you put here.



Well first off.....reserve growth occurs, simply because most of the time people are talking about P1 or proven reserves...those which there is a 90% chance of producing. As knowledge in any field progresses P2 reserves (those with 50% certainty) are moved to the P1 category and P3 (10% certainty) are moved to P2. Your assumption that the Saudi numbers are OOIP are without foundation....there is no reason to do that other than it fits your preconcieved notions. Aramco on several occassions has said the Shaybah 16 -17 billion barrels is recoverable reserves not OOIP. Where's your proof they are wrong about this? Have you worked on Shaybah? Oh and by the way they have already produced over 2 billion barrels from Shabah according to Aramco....the pressure remains constant, water cut is constant and gas production controlled, all signs that it is not depleted by a long shot...there is an SPE publication on that I pointed to earlier.

You really are quite clueless aren't you. Of course I have read the thread in its entirety, which is why I made the comment I did. You only need to read the last 2 posts to see my point.

I don't know what the Saudis have, I admit that. You are just guessing. So don't insult our intelligence with what you "know".

Thank you for your offer, here are my figures for the world as a whole:

Current gross decline rate from current production base: 10%

Future increase: by 0.5% points each year to 2010 then decline by 0.35% points to 2018.

Future discoveries: 30 billion barrels; model as 3 billion in 2005 declining exponentially at a 10% rate. Assume discoveries brought on stream 4 years after discovery, production peaks after 2 years at 11% depletion rate(ie 11 mb/year from 100 mb remaining reserves) and begins declining initially at 9% growing to a 15% rate after 5 years.

Field reserves discovered but not presently in production: 40 billion barrels, production grows from 0 mbd at present to 7 mbd in 2010 declining at a 13% rate thereafter.

Amount of production from unconventional oil: 2005 1.5 mbd increasing exponentially by 6% to 2025 then declining by 7%.

Amount of production due to reserve growth: 0 mbd (minimal net effect).

Hope thats enough to construct a basic graph.

Your personal experience seems to be clouding your objectiveness on this issue. See:

Berkeley

Of course in the case of Saudi Arabia we are dealing with predominately sandstone so waterflooding in greater size and over a longer period of time is necessary to cause a comparable level of damage which is precisely what has been occuring for many decades and the damage has been observed since at least 1974 (Chevron chief reservoir engineer's admission).



It is helpful to the analysis to construct a plausible explanation for observed Saudi behaviour that is what my "ranting" as you put it is there to do.



Here is a third party assessment of Ghawar's cumulative production and remaining recoverable reserves:
http://www.photodump.com/direct/bbrown20052009/Ghawar2.jpg

I would add those figures are in boe (barrel of oil equivalent) terms so include natural gas as well. The figures are based on Petroconsultants' (now IHS Energy) database. Clearly this is at odds with Aramco's claims. As for Shaybah I assume you are refering to this from Aramco. On page 15 it states that 5% of Shaybah's reserves have been depleted so 5% of 16 = 0.8 billion barrels not the "over 2 billion barrels" you state.

I'm comfortable with the concept; I just have trouble with the degree of certainty some assert here. Even Simmons, as accurate as he tries to be, isn't as polemical. When the numbers are ultimately (educated) guesswork, as bobcousins points out, there is a degree of uncertainty that can't be overcome by pointing out that the Saudis have a motive to lie--of course they do, that doesn't mean they can't be correct in some respects. We just don't know which ones...

I have no intention of insulting your or anyone else's intelligence. I apologise if that is the impression you got.

Good Lord...save me from people who have read a paper and suddenly believe they are experts in reservoir mechanics. They are referring to reservoirs that are chalks (diatomaceous reservoirs are the same as chalks). They are incrediably fine grained reservoirs with ineffective matrix porosity. Chalks do not produce unless they are fractured... They are susceptible to water bypass and hydraulic fracturing of the reservoir....the simple reason being that if you are trying to inject water into a reservoir with zero permeability the back pressure you create exceeds the fracture gradient or elastic yield point of that rock. You create a large fracture. Because the difference in the permeability between the fracture and the grain boundaries is so huge basically you end up with water by-passing.....you flush out any hydrocarbon stored in fractures but very little stored in the matrix. This reservoir is absolutely completely different from any of the reservoirs that produce in Saudi with the exception of portions of Shaybah. They all have high porosity and high permeability and are by any sense of the word conventional reservoirs unlike the unconventional reservoirs you point to as an example.

Also your statement that most of the reservoir in Saudi is sandstone demonstrates a considerable lack of knowledge about the subsurface. In fact a maximum of 16% of the recoverable hydrocarbons (IHS numbers) are reservoired in clastics....84% are found in carbonate reservoirs...most of which are conventional. There is absolutely no rule of thumb as to how a water flood will behave in a given lithology....it is all related to presence and distribution of anisotropy, fractures, relative permeabilty to the various fluid phases, wetting conditions etc. The comment that a reservoir engineer recognized such damage in the early seventies is pretty meaningless unless we know exactly what he meant by that. Certainly he could not be referring to Ain Dur where Aramco shows pressure increase due to flood efficiency only starting in about 1975.

http://i9.photobucket.com/albums/a61/imoffat/saudiprodaindur.jpg

And finally further to your comment about Shaybah again I have to reiterate that you are making unwarranted assumption about what is recoverable versus what is in place. The 5% Aramco suggests (end 2003) as recoverable to date refers to their OOIP of 30 billion barrels...not your number which is closer to their 2P recoverable reserve. Also the recoverable number you show from the map must be from decades ago...I actually have access to all of the IHS Energy estimates sitting in front of me...and up to date as possible. The following is a comparison of your OOIP with that of IHS Energy (by the way the company that Campbell says he uses for his own analysis):

http://i9.photobucket.com/albums/a61/imoffat/comparisonofreserves.jpg

It is pretty apparent that your estimates are vastly different from theirs. Indeed your OOIP estimates are less than their recoverable reserves. If you had good technical reason to do this I would not be so critical. However in most of the cases you claim at least one reason for dropping OOIP estimates is due to poorer permeability or poor source rock quality. Both of these are non starters in terms of oil in place calculations. Permeability does not come into play in this calculation....only porosity, net reservoir thickness, reservoir area, water saturation and oil Boi. As well the source rock has nothing to do with what is calculated in the reservoir.
Again I stick by my contention that you have been completely arbitrary in chopping back the numbers....without proper technical justification it is pretty much a meaningless estimate....based solely on your belief the Saudis must be lying.

I am not saying the IHS numbers are completely correct. But I do know how they arrive at them. They pick up information at presentations made by Saudi and Aramco personnel as well as information they obtain informally from insiders. There is no way of qualifying these numbers without actual hard production data.

The rudeness I see here does alot to discredit those who are being rude.

Its seems to me that there are issues some people choose not to even consider.
Things may be far worse then you or I can imagine.....hmm imagine that.
Bobbyboy has been nothing but nice and what does he get in return??

Your LORD is not here............. dig it???!!
I hope your Lord can save us from people who see the truth yet fail to recognize it as such.

If the Sauds are not in bed with the Neocons and someone can prove it...... I will put my head between my legs and kiss my own arse!!!

If I could do that I may never leave the house!!!

Its quite alright really.
When we are post peak lets here your brilliant thoughts on how truthful the Sauds were.

Its so evident whats going on.
Thanks Bobbyboy for showing me at least that things might be far worse then these "educated experts" would like to admit.
Afterall PO is an equal opportunity killer and they along with the rest of us will suffer and be forced to revert back to a more efficient way of life

Painful thought for most I AM SURE OF IT!!!

Education = right?
Heck!! I thought might = right
I thought we covered education already.....
Who educated Edison??? His mom and himself
Yet in all his wisdom Edison thought AC power was asinine.
Just goes to show you that even the most brilliant minds can be wrong on occassion.

Eternal laughter