[Tanada]

Don't forget the world is using 93 million bbls of oil each day with OPEC providing about 35 million bbls per day. All the oil OPEC provides is conventional, the vast majority of from legacy fields that have been producing for decades. Ghawer in Saudi Arabia alone produces about 6 million bbls per day.

Those fields are going to peak, one by one, and quickly decline.

Lets return to this topic after Ghawar peaks---which it is very close to doing. Peak Oil theory will seem a lot more viable then.

Cheers!

I used to believe with all my heart in part from reading Twilight In the Desert, that Ghawar was at or even just past peak. In 2005. Now? Who the heck knows? It has been the world champ field for about half of the oil age, and its still pouring out the black stuff.

When it does finally happen and if it goes into an 'average' kind of decline rate of say 5 percent, well nobody will be able to cover that up more than a few months at most unless the world is in a massive recession/depression and they can supply all the demand from other Saudi fields so its not obvious. If they are pumping close to flat out like today there is no room to cover any gap. If it had peaked in say 1984 when they were producing a minimal amount of oil in KSA they could have easily covered the decline until they went to max production in 1985-86 to regain market share from OPEC cheaters.

[Plantagenet]

Don't forget the world is using 93 million bbls of oil each day with OPEC providing about 35 million bbls per day. All the oil OPEC provides is conventional, the vast majority of from legacy fields that have been producing for decades. Ghawer in Saudi Arabia alone produces about 6 million bbls per day.

Those fields are going to peak, one by one, and quickly decline.

Lets return to this topic after Ghawar peaks---which it is very close to doing. Peak Oil theory will seem a lot more viable then.

Cheers!

I used to believe with all my heart in part from reading Twilight In the Desert, that Ghawar was at or even just past peak. In 2005. Now? Who the heck knows? It has been the world champ field for about half of the oil age, and its still pouring out the black stuff.

When it does finally happen and if it goes into an 'average' kind of decline rate of say 5 percent, well nobody will be able to cover that up more than a few months at most unless the world is in a massive recession/depression and they can supply all the demand from other Saudi fields so its not obvious. If they are pumping close to flat out like today there is no room to cover any gap. If it had peaked in say 1984 when they were producing a minimal amount of oil in KSA they could have easily covered the decline until they went to max production in 1985-86 to regain market share from OPEC cheaters.

Exactly right.

Mathew Simmons---Twilight in the Desert. It all brings back memories, does't it. That book played a big role in getting me interested in peak oil.

And today Ghawar is ready to peak, and once it does Ghawar may decline much more rapidly then 5% per year after it peaks. The field has been drilled and redrilled. They are pumping in water at the bottom to force all the oil to the top. Right now they are pumping only from the top and percentage of water in the wells get worse every year. When it finally peaks it may be like the Mexican Cantarell field, which dropped to near zero in just a few years after peaking.


Twilight is almost here

[rockdoc123]

Twilight is almost here

\
but back in 2006 when this was discussed at length in the forum Simmons was saying it had already peaked and was going to doom us all.
He claimed to have read a couple of hundred papers from SPE which was the basis of his view.
Back then I wrote a number of posts (somehow all of the really relevant Saudi Arabia data threads where I posted actual data are not to be found in archives) where I talked about the claims he made based on some of the papers he apparently read. As it turned out it was pretty clear he had read the SPE abstracts and not the actual papers. The abstracts talked about issues that Aramco were trying to deal with (eg water break through) but the paper itself talked about how they were dealing with it and the success they were having. In essence his analysis was complete BS which isn't surprising when you have a financial analyst trying to judge petroleum engineering issues.

Back then I posted all of the Aramco claims as to total P3 versus what they were reporting as P1. Right now I believe they have produced about 55% of the proven reserves in Ghawar (which includes a number of interconnected fields). They say they will get about 70% out of a couple of fields on the north end but haven't spoken to the rest of the fields. Contrary to the uneducated view of Simmons that water cut was an issue Aramco has kept water cut to a manageable level for years due to the MRC wells, 4D seismic and SMART completions which means there will not be a sudden cessation of production as water overwhelms the system.

The large unknown here is how much probable and possible reserves remain. Aramco back then claimed that their P2 +P3 was equal to the P1 they were claiming to OPEC. If that is true and they are capable of moving those reserves through the tiers to proved producing then it remains a question as to how much they actually have left (could be substantial). Notwithstanding the fact that their claim of a 12.5 MMb/d spare capacity (which they seem to have achieved by the megaprojects) would alter what their peak oil looks like. That being said it is difficult to understand all of the political machinations. It is safe to say that Saudi production would have peaked awhile ago if they had not decided to seek market share in 2014.

[Plantagenet]

Contrary to the uneducated view of Simmons ....there will not be a sudden cessation of production as water overwhelms the system.

??????

I'm not sure why you are bashing Simmons, but I don't think he ever said there would be a "sudden cessation" of oil production at Ghawar. I also don't understand why you doubt that the amount of water being produced will grow over time, as what usually happens in a water flood project is that the amount of water being produced with the oil grows increasingly large over time as the water-oil contact rises through the production zone. Some of the Alaskan wells in Cook Inlet, for instance, currently have water cuts over 90%.


Rather then a sudden cessation of oil production, as you are suggesting, consider instead a rapid decline like that seen at Cantarell in Mexico.

Luis Ramírez Corzo, head of PEMEX's exploration and production division, announced on August 12, 2004 that the actual oil output from Cantarell was forecast to decline steeply from 2006 onwards, at a rate of 14% per year. .... For 2006, the field's output declined by 13.1%, according to Jesús Reyes Heróles, the director-general of PEMEX.[9]

In July 2008, the daily production rate fell sharply by 36% to 973,668 barrels per day (155,000 m3/d) from 1.526 million barrels per day (243×103 m3/d) a year earlier.[10] Analysts theorize that this rapid decline is a result of production enhancement techniques causing faster short-term oil extraction at the expense of field longevity. By January 2009, oil production at Cantarell had fallen to 772,000 barrels per day (123,000 m3/d), a drop in production of 38% for the year.... marking one of the most dramatic declines ever seen in the oil industry.[11] Production .... had fallen to 408,000 barrels per day (60,000 m3/d) by April 2012.[1]

Is it possible that Ghawar will behave like Cantarell, which had very high annual decline rates?

Cheers!

[rockdoc123]

Is it possible that Ghawar will behave like Cantarell, which had very high annual decline rates?

In a word ...no. The two reservoirs are quite different as is the oil and drive. Cantarell is brecciated and fractured carbonate which has been responsible for early water and gas coning. Pemex produced the field at full bore without really understanding all of the intracacies. The field had a huge gas cap that provided most of the early energy for production but the gas cap was depleted which resulted in collapsing production due to lack of pressure. There is some water drive support on a part of the field but because it does not underlay of surround the entire field it creates its own problems. Pemex realized they needed to repressure the reservoir and found that water nor gas would work (I believe this was an adverse mobility issue due to the oil being heavy) and chose to move to nitrogen injection. That did work for a short while but they then experienced near borehole gas and water coning in most of the wells (thought to be a result of producing at too high a rate). When coning starts in a field you are in deep trouble unless you can somehow deal with it...basically what happens is the gas and water stream to the borehole bypassing all of the oil. This is exacerbated by the oil being heavy and less mobile. The heavy oil also creates an issue such that early on Pemex had to install gas lift on the vast majority of wells in order to lift the heavier oil out of the well bore. Current recovery at Canterell is somewhere in the order of 30% of OOIP and the most aggressive estimates of total recovery from PEMEX are about 45%.

On the other hand Ghawar is a carbonate reservoir that has widley spaced faults running through it but unlike Canterall does not have abundant close spaced fractures across the reservoir. A couple of decades ago Aramco noted increasing water cut coming from many of the wells. After a lot of seismic and subsurface evaluation it was determined that the water was coning along fault planes that some of the wells had intersected. High resolution seismic allowed Aramco to locate the faults and they then began drilling horizontal wells to deliberately avoid intersecting the faults. Application of maximum reservoir contact wells along with SMART completions allowed Aramco to produce wells and much reduced drawdown as well as shutoff laterals that were producing too much water. As a consequence they have been able to keep water cut to 30 - 40% while having produced more than 50% of OOIP. Aramco also spent a lot of money on reservoir management. They were the first to use a super computer to run finite element models for the entire field. My understanding is their simulations based on MRC wells and production management plans have been very close to the results. Based on these models Aramco is now estimating about 70% recovery of OOIP in the field.

So the fields have similarities but the main differences are: Canterell has heavy viscous oil and Ghawar has medium light low viscosity oil; Canterall has more intense fracturing which causes a dual permeability system whereas fractured zones in Ghawar are widely space and flow is through single matrix permeability mainly (although the super permeability layer does behave as a fault in terms of reservoir engineering); Canterell had a very large gas cap that provided energy for production whereas Ghawar had a natural water drive; nitrogen injection at Canterell was done to repressure the reservoir whereas flank water injection in Ghawar was done to increase sweep efficiency; Pemex has been somewhat hands off with the field and didn't intervene until they really ran into problems whereas Aramco has been very hands on. Pemex likely created much of their problems through producing at too high rates which exacerbated water and gas coning hence limiting oil recovery. Aramco on the other hand avoided the issues with coning via mrc wells and the attendant low draw down rate.

[ROCKMAN]

Ghawar isn't "dying". Oil fields like it don't die: they produce water free oil at its peak rate. And then the water cut kicks in and lifting increases to keep the net oil production at the max possible. And then water cut increases to the point when the max volume lift isn't sufficient to maintain the high oil volume. Based upon what various reports imply Ghawr is some where in this neighbor. As production continues the water increases and thus reduces the produced oil volume. This continues until the value of the produced oil is less then the cost to produce the wells. Based upon the size and geology of Ghawar it could easily hold that status for the next 40+ years...maybe a good bit longer. But somewhere along that path it will be producing just 20% of its currernt rate...and still remain commercial for a couple of more decades.

Oil fields don't die. Eventually they just produce continuously decreasing volumes of oil until they become noncommercial at which time they are abandoned. IMHO debates would be better served by sticking with the correct terminology applicable to the dynamic.

[rockdoc123]

Flat line should come pretty soon. Ghawar is now a thin oily film of floating on a massive water reservoir. Saudi Aramco is essentially broke having spent 10's of $billions on extended-reach, multilateral horizontal on what are essentially pool skimmers.

What a completely idiotic comment. There is still 25 Gbbls remaining of primary recovery at Ghawar and Aramco has been valued at anywhere between $500 billion and $2.5 trillion US dependant on what oil price is used. Essentially broke? Hardly.

Simmons spent a decade pouring over 120 published papers from the Society of Petroleum Engineers. The papers are technical, Simmons work was brilliant.
His published works never talked about dates. That would be idiotic. He understood the complexity of Ghawar and its production system. He knew economics.

What a load of horse manure. Exactly how are you equipped to state Simmons work was brilliant? As I’ve said previously it is very obvious from his book and presentations that he never actually read the papers but instead read the abstracts. Back in the old Saudi Arabia thread that has now disappeared I talked about having gone through all of those papers (there were only 200 so) in detail. What was very apparent was Simmons read about all the problems but didn’t bother to point out that the actual body of the paper described how Aramco was dealing with the issues. Most of these papers were simply saying “hey we identified some issues and here is how we dealt with them successfully). And the success of the MRC and SMART completions program indicates that all the worries about Ghawar production were unfounded.

The cornies and deniers are stupid jerks, they attack the messenger and not his data. They are fools.

I don’t think anyone has attacked Simmons personally other than to state his analysis of the data was woefully inadequate. If he had been one of my undergrads back in the day the grade received would not have been attractive.

[GHung]

When I examine KSA and its ability to maintain production, I don't consider past or current production as much as I consider their behavior. Seems they are planning for an eminent decline (in oil income) in a pretty big way. Would they be putting as much effort into "transforming the Saudi economy and society" if they knew they could maintain current production levels for five more years? Ten years? Twenty? Is it all about current prices? Their price expectations going forward? Do they think they can't compete with shale? Concerned about the climate? Why are they cutting social programs/subsidies and raising their domestic fuel prices if they can continue to produce flat out. One could speculate that they see demand destruction in the near future, but there's not a big case to be made for that yet from a BAU perspective.

What's on their minds?

[rockdoc123]

the oil is red, the water is blue. 10 years ago there was still some red oil on a sea of water. today it is an oily film. rock, do you know what the water-cut is today in Ghawar? I'll bet its around %99.99.

Well in 2004 water cut was at 30% and remained flat until the last publication I saw which was in 2010.....ooops still somewhere between 30% and 40%. This of course due to the MRC wells and SMART completions. Water production that is not coned is largely no big deal. I've been involved in a few fields that had 90% water cut and produced a fair bit of oil and gas. One of those started out its production life at 90% water cut due to high vertical permeability. All you need is an economic means of dealing with the water. In Saudi Arabia that would pose zero problem.

Again recovery in Ghawar will be 70 - 73% according to Aramco which means there is still about 25 Gbbls left....I know of a lot of companies who would like to get their hands on an "oily film" of that size.

What's on their minds?

I think it is as simple as seeing the need to diversify their economy. It has been and still is all about oil so when prices are high they are in the cat birds seat but when prices are low they struggle to keep the large social investment programs moving forward. By selling Aramco shares they bring in cash that can be used to diversify their investments so they are no longer a one industry economy. I don't think there is a need to read anything more into it than that.

[ROCKMAN]

Ghung - By selling those shares they are simply monitizing a bit of their future revenue...at a discount. No diffent then any pubco selling bonds. You get some capex now to use for expansion now but you pay for it in the future...plus the cost of raising the money.

[Tanada]

Well in 2004 water cut was at 30% and remained flat until the last publication I saw which was in 2010.....ooops still somewhere between 30% and 40%. This of course due to the MRC wells and SMART completions. Water production that is not coned is largely no big deal. I've been involved in a few fields that had 90% water cut and produced a fair bit of oil and gas. One of those started out its production life at 90% water cut due to high vertical permeability. All you need is an economic means of dealing with the water. In Saudi Arabia that would pose zero problem.

Again recovery in Ghawar will be 70 - 73% according to Aramco which means there is still about 25 Gbbls left....I know of a lot of companies who would like to get their hands on an "oily film" of that size.

So if I did the math right that gives Ghawar another decade at the current rate of production to full depletion. The thing is we know from past experience depletion is not a full production today, no production tomorrow kind of event. For every field/well/country I know of the tip over from sustained production to capping the wells is a 20 year or longer process.

Thus the key question, when do production declines for Ghawar set in? What rate do they set in at, 3%, 6%, 9% per year? If they are over 50% depleted now and are ultimately going to reach 70-73% in 20 to 30 more years of production how soon will we know they are on the declining output slope?

[rockdoc123]

look at the seismic.

doesn't tell you anything about water cut or reservoir performance. The paper where those diagrams come from I have. All it is showing is progression of the waterflood front and nothing more.

Have you been down there with your snorkel? It water.

It is 25 Gbbls of oil sitting on a water leg. That is hardly water. The water saturation in the reservoir is 25% not 100%. But then apparently you are an expert in reservoir engineering now.

am now holding a copy of "Twilight in the Desert" in my hands. In the back, under 'Notes' are 22 pages of technical references, most referring to specific recent SPE publications (from the time period, 2002, 3 and 4, when Simmons wrote his book.) Simmons defends every one.

I stand by my comments I made back in 2006 or so....he did not read the entire papers or chose to ignore the fact that the problems outlined in those papers were being solved....which they were.

To demonstrate his incredible understanding of Ghawar reservoir engineering here is a quote from Simmons:

And from 1967-2005 they’ve actually found an accumulation of little deposits they’ve never produced, even though they were always worried about too little diversification of supply. But for some reason or other they just couldn’t produce these fields. Now they’re going back and trying to rehabilitate a bunch of fields that were crummy fields in the 60s and 70s, that couldn’t ever sustain much production, and they’re claiming these fields can easily get up to 500,000 bpd and last 30-50 years. There is no technical support that that can be possible. You can’t say it’s impossible, but the fact that these fields couldn’t produce in the 70s gives rise to real caution that basically they’re deluding themselves that through the use of modern oil field technology they will be able to do something no one in the world has been able to do.

Low and behold the megaprojects which Simmons referred to here met every projection that Aramco had made. There were papers published in SPE that talked about the success of the MRC program. So I guess "there is no technical support that that can be possible" was his opinion based on a very poor understanding of reservoir engineering principles.

[rockdoc123]

Thus the key question, when do production declines for Ghawar set in? What rate do they set in at, 3%, 6%, 9% per year? If they are over 50% depleted now and are ultimately going to reach 70-73% in 20 to 30 more years of production how soon will we know they are on the declining output slope?

A difficult question to answer given we don't really know how hard the remaining wells are being produced. Theoretically if you have 200 wells producing fullout and shutin 100 as the waterflood front passes by you would end up with 50% less production. But if the wells have been produced at very low drawdown and have lots of room to have production increased then that isn't the case. You could shutin one well and increase production in one or more wells to make up for it.

Interestingly enough I did come across something I had saved from a post I made here back in 2006 (I think). In that post I quoted some work done by WoodMac

As of January 2006, aproximately 43% of Saudi's initial commercial oil reserves had been produced and at the estimated 2006 production rate, around 2% of remaining oil reserves (WoodMac estimates 145 MMB 2P) are being produced annually.  Within these figures we include Saudi's 50% share of all oil and gas fields within the Partitioned Zone.

Back then I used Woodmacs daily production numbers and remaining 2P to arrive at the following field depletion ratesOnshore portioned zone = 6.8%
Arab superlite fields = 4%
Abqaiq = 4%
Berri = 2.5%
Ghawar = 3%
Marjan = 3.2%
Qatih = 3.3%
Offshore portioned zone = 3%
Safaniyah = 2.2%
Shaybah = 1.6%
Zuluf = 2%
Other fields = 1%

In that same post I quoted some comments from I'm not sure where, which is in line with what I mentioned about new wells:

But Saudi Aramco has taken a number of measures to offset a decline in output from the country's aging oil fields, the spokesman added. "A variety of remedial activities are always being taken in oil fields influencing their effective decline rates," the spokesman said. "The drilling of additional development wells in the producing fields is Saudi Aramco's standard practice to offset normal declines of older wells."
This is particularly important when oil fields are progressively depleted under a well thought out strategy of maximizing the sweep and displacement efficiencies, leading to high ultimate oil recovery, the spokesman said.

[Plantagenet]

Rocdoc---Ghawer isn't the only giant conventional oil field that is aging badly. Virtually all of the world largest oil fields have been in production for decades, and are well past their prime (I mean the oil fields, of course, not rockdoc----).

the-long-decline-of-the-worlds-largest-oil-fields

Clearly all the giant conventional oil fields will eventually decline and then stop producing, some of them sooner then later. This will mean the loss of tens of millions of barrels of oil production each day. This loss will inevitably put downward pressure on total global oil production and upward pressure on oil prices.

Thats when we'll see if peak oil is really dead. Can tight oil shale replace Burgan? Or Ghawar? Or those two and 10 other giant oil fields all declining at once?

Cheers!

[Plantagenet]

KSA starts injecting CO2 to increase oil recovery from Ghawar.

saudi-aramco-testing-c02-to-get-more-oil-from-giant-ghawar-field

That should give it a few more years. But when that last bit of oil is gone Ghawar will be toast and the world will have to find another 6 million bbls of oil each day.

Cheers!


The end is in sight at Ghawar

[Rod_Cloutier]

John Michael Greer of the Archdruid report made a prediction at the beginning of 2016 that the Saudi Arabia House of Saud would be gone by the end of this year:

The Kingdom of Saudi Arabia is a fine example of a phemomenon all too familiar to students of history: a crumbling, clueless despotism which never got the memo warning that it couldn’t get away any longer with acting like a major power. The steady decline in the price of oil has left the kingdom in ghastly financial condition, forced to borrow money on international credit markets to pay its bills, while slashing the lavish subsidies that keep its citizens compliant. A prudent ruling class in that position would avoid foreign adventures and cultivate the kind of good relationships with neighboring powers that would give it room to maneuver in a crisis. As so often happens in such cases, though, the rulers of Saudi Arabia are anything but prudent, and they’ve plunged openly into a shooting war just over its southern borders in Yemen, and covertly but massively into the ongoing mess in Syria and Iraq.

The war in Yemen is not going well—Yemeni forces have crossed the Saudi border repeatedly in raids on southern military bases—and the war in Syria and Iraq is turning out even worse. At this point, the kingdom can’t effectively withdraw from either struggle, nor can it win either one; its internal affairs are becoming more and more troubled, and the treasury is running low. It’s a familiar recipe, and one that has an even more familiar outcome: the abrupt collapse of the monarchy, followed by prolonged chaos until one or more new governments consolidate their power. (Those of my readers who know about the collapse of the Russian, Austro-Hungarian, and Ottoman Empires at the end of the First World War have a heads-up on tomorrow’s news.) When that happens—and at this point, it’s a matter of when rather than if—the impact on the world’s petroleum markets, investment markets, and politics will be jarring and profound, and almost impossible to predict in detail in advance.

The timing of political collapse is not much easier to predict, but here again, I’m going to plop for a date and say that the Saudi regime will be gone by the end of 2016. That’s specific prediction #4.

http://thearchdruidreport.blogspot.ca/2 ... uture.html

[AdamB]

John Michael Greer of the Archdruid report made a prediction at the beginning of 2016 that the Saudi Arabia House of Saud would be gone by the end of this year:

He also claimed that peak oil had happened about a decade or so ago. Do we need to add a decade to this prediction just to correct for his timing malfunctions?

Perhaps he has gained some training or experience in geology, economics, some random science or another, that his geopolitical speculations have improved? Hiding in the woods running the Legions of Druids near the I-95 corridor is a pretty busy game though, I doubt he has had the time to improve his meatspace experience in areas that might matter.