rockdoc123 wrote:this is nothing more than a tempest in a teapot.
What it is...is nothing more than Chris Martenson trying to run a business on doom-mongering. You know, Peak Prosperity and all that.
rockdoc123 wrote:this is nothing more than a tempest in a teapot.
Ghawar has been depleting since it was first brought on stream.
The key point here is that the first independent review of production of Ghawar was recently released as part of the ARAMCO bond prospectus, and it shows that production at Ghawar has declined over 20% over the last several years.
decreased production at Ghawar .... has been .... made up for by increases elsewhere.
Plantagenet wrote:decreased production at Ghawar .... has been .... made up for by increases elsewhere.
True enough. Even though Ghawar production is down, total oil production from KSA still hasn't peaked.
Cheers!
Outcast_Searcher wrote:To be fair, we don't know why production is down, but it might well have to do with relative costs vs. a major geological trend change......Perhaps (and this is just speculation based on economics, not oil production know-how), they found it cheaper to let Ghawar decline naturally in the short run and ramp up other prospects.
Since I am a scientist I tend to put a lot of weight on the actual data, and the data shows production has recently dropped. I find it interesting how many people don't accept that data at face value.
As far as your suggestion that Aramco might have shifted oil production elsewhere because it is cheaper for Aramco to produce oil elsewhere, I personally doubt thats the reason because Ghawar is KSA's main field and its well known that oil production at Ghawar can be done very very cheaply. In fact, for decades oil at Ghawar has been among the least expensive to produce in the entire world.
The Company actively manages its prolific reserves base in accordance with the Kingdom’s laws and regulations to maximise long-term value while optimising ultimate recovery from its fields. Because of the size and number of its fields and MSC, the Company is able to maintain its desired level of overall production by tapping into new reservoirs when required to improve long term value through portfolio capacity optimisation. This approach, which differs from the typical industry practice of maximising production rates per field, is more capital efficient given the nature of the resources available and leads to more stable production and higher ultimate oil recoveries.
Furthermore, the Company’s MSC and integrated logistics network allow it to vary crude oil production, which combined with their compatibility with global refining systems, provides the Company with a unique ability to respond to changes in demand for the Company’s crude oil grades.
Almost certainly it would be more expensive for Aramco to explore for oil in new areas, work up the data and find new fields, drill test wells in remote new areas and then develop new infrastructure to produce any oil found there, and even more new infrastructure to store the oil and more infrastructure to transport new oil to market. NOPE....IMHO its unlikely they shifted their attention away from Ghawar in order to produce oil more cheaply.... There might be a strategic or political reason for it, but it probably doesn't save them any money.
Given the fact that oilcos have a well known tendency to produce their best prospects first, in order to maximize their profits, my suspicion is production at Ghawar is dropping because some areas of the field just aren't producing much oil anymore---the water cut is getting higher and higher, to the point that its now up to 98% in at least one of the sub-fields.
....as to the comment about 98% water cut. The area with 98% water cut was where they were running the CO2 disposal and enhanced recovery evaluation program....in a part of Ghawar that had been completely swept and depleted years ago in order to see if they could still recover additional oil.
f you accept that point then now consider the effect of rising water cuts in the rest of Ghawar.
As the water cut progressively increases in other areas, oil production from those wells will tend to decrease through time. And we know the water cut is progressively increasing in other areas of Ghawar. In various presentations Aramco has said that "the water cut was about 32% in 2003, and ranged from about 27% to 38% from 1993 to 2003.[15] By 2006, North Uthmaniyah's water cut was about 46%.[16][17]"
Lets do some math and see how that works....if x number of wells had 30% water cuts in 2003 and they have 60% water cut today, then if we hold everything else constant the amount of oil produced would drop by half just due to the increasing water cut.
Aramco has stated as late as 2010 (presentation by Saleri I believe) that they had gotten water cut managed to about 40% across the fields.
1. Obviously they have a problem with rising water cuts. In spite of your child-like faith in the capability of the Aramco engineers, its not possible to "manage" the rising water-oil interface and stop it from rising as more and more water is injected into the field.
2. 2010 is now nine years ago. There's been a lot of production and a lot more water injection since then, and the oil-water interface has risen still higher.
4. Rising water cut percentages in production wells are a possible reason why production has fallen over 20% from the peak at Ghawar.
5. Please refer to my post above to the see math explaining how this works.
You are living in a world of "oh the Saudis are lying about their reserves...
Now you are lying. I've never said that and I don't think that and I didn't post those words.
The sale has already been postposed several times. The reason its looking like the whole things is going to be cancelled is that Saudi is unwilling to disclose information about the condition of their oil assets and oil reserves, apparently because they don't want the world to know how close to depletion Ghawar and their other legacy oil fields are in.
This is consistent with news reports that KSA is telling Trump its impossible for them to raise their production to bring down oil prices
And whats more, forget about the IPO they've been preparing too. They're not going to do that either. They don't want anybody else to see the books or check those claims about oil reserves, don't you know, because their claims might be specious and they might get sued for lying about their oil reserves.
Saudi lying about their oil reserves? Why, perish the thought!
The WSJ article cites ARAMCO insiders as saying they fear making disclosures during the IPO process. Considering that the principal data that ARAMCO has that is relevant to the IPO is all oil related, I don't see how you can rule out the idea that ARAMCO does't want to make full disclosures about their oil data as part of the IPO based on their oil reserves.
If you want to dream up dumb ideas and then argue with yourself about your own dumb ideas, you are welcome to do so but please don't use a phony quote to try to claim your dumb ideas have anything to do with me.
There is 48 billion barrels of oil left in that zone of high oil saturation. You are living in a world of "oh the Saudis are lying about their reserves, Ghawar is failing....etc, etc." that was endemic on this site a decade ago and you were tossing the same idea out on another thread just a few months ago.
July of 2018 your quote:The sale has already been postposed several times. [b]The reason its looking like the whole things is going to be cancelled is that Saudi is unwilling to disclose information about the condition of their oil assets and oil reserves
I can't believe you don't understand the concept of time.
In July of 2018 the Saudi's hadn't released information on their oil assets and reserves. They'd kept this kind of info under wraps for decades.
You are living in a world of "oh the Saudis are lying about their reserves, Ghawar is failing....etc, etc." that was endemic on this site a decade ago and you were tossing the same idea out on another thread just a few months ago.
Now its 2019, the year after 2018, and after decades of secrecy they finally released information on their oil assets and reserves as part of their bond prospectus. Are you really so ignorant that you don't even understand that? In 2018 the Saudis hadn't released the data and now in 2019 they have.
You are living in a world of "oh the Saudis are lying about their reserves...."
And whats more, forget about the IPO they've been preparing too. They're not going to do that either. They don't want anybody else to see the books or check those claims about oil reserves, don't you know, because their claims might be specious and they might get sued for lying about their oil reserves.
Saudi lying about their oil reserves? Why, perish the thought!
Do I have to explain the concept of time to you as well? Do I have to explain that 2018 was last year, and this year is 2019? Do you understand that 2019 comes after 2018?
And whats more, forget about the IPO they've been preparing too. They're not going to do that either.
The Saudis didn't do an IPO, just as I predicted. Don't you even understand that? They switched to doing a bond sale instead.
And why? One reason may well be that the level of disclosure for a bond sale is lower then that required for an IPO.
Again, what I posted in 2018 has come to pass.
And why? One reason may well be that the level of disclosure for a bond sale is lower then that required for an IPO.
I suggest you grow up and face the facts here. There is no IPO, in spite of your repeated claims the Saudis would issue an IPO and the claims of the Saudis over the last four years that they would issue an IPO.
Al-Falih also told Bloomberg that investor demand for Saudi Aramco’s debut dollar bond has exceeded $30bn. The securities, which haven’t priced yet, will be the first of many debt offerings by the company. He added that the company will have a "permanent presence" in capital markets, and in a couple of years investors will be able to buy either company stock or bonds.
He also noted that he hopes Saudi Aramco will proceed with an initial public offering, which has been delayed, in 2021.
The only difference is for ongoing continuous disclosure which they will not have to do ...
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