The downside comes when the water gets near the level of the wells, and starts to increase the water percentage in the flow significantly. That is when the long run of a highly productive well or oil field suddenly falls in the toilet. Production declines well over 10% a year can happen, and as I showed with the output from the Yibal field in Oman that was produced this way, suddenly production is over.
The big worry at present is that we may well be approaching this condition for the largest Saudi Arabian fields, they have been produced with water injection and now water percentages are rising so that a significant drop in production could be fairly imminent. In a later post I will go into why this is more likely, and will leave to your imagination what the effect of an imminent drop of say 600,000 bd in production from those fields will have on the demand:supply balance.
Oil Drum
