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THE Ghawar Thread (merged)

General discussions of the systemic, societal and civilisational effects of depletion.

THE Ghawar Thread (merged)

Unread postby OilsNotWell » Wed 20 Apr 2005, 20:54:09

Recently, quite a number of new sites and blogs regarding PO have emerged, and many of them of quite high quality. (but http://www.peakoil.com is still a daily must-read!) Here's one that had a bit more detailed insight into SA production and in particular, Ghawar than I had read before:

The Oil Drum Blog
Saudi Aramco expansion plans
Because the demand for oil is continuing to grow, Saudi Arabia is making plans to attempt to meet the growing need. At the 14th Middle East Oil and Gas Show in Bahrain, the senior vice president for exploration and production for Aramco, Abd Allah Al-Saif provided information on the planned increases in production that the company is anticipating. They are:
major projects that Saudi Aramco is undertaking to ensure meeting future demand:
• The Abu Sa'fah and Qatif projects came on stream in 2004 adding 650,000 bpd.
• 300,000 bpd of Arabian Light will come on stream in the Haradh field in mid-2006.
• 500,000 bpd of Arabian Light will be added to capacity through the Khursaniyah development, planned for 2007.
• 2008 is the target date of approved expansion plans that would add 300,000 bpd of lighter crude at Shaybah and central Arabian fields.
• A Khurais increment of 1.2 million bpd of Arabian Light will be commissioned in 2009.
"This is a very aggressive program that will require the mobilization of immense resources, such as rigs, material and manpower, but which we are confident to successfully execute, as we have done for the past 70 years," he said.
The concern is two-fold, the first as he recognized earlier in his speech is that world demand went up 3.5 million barrels a day in 2004, and a conservative estimate for this year is that it will go up 2 mbd. And as I mentioned in my post yesterday, Saudi Arabia is just about the only country that can provide sufficient increase in production to have any impact on that demand.
The second is that these increases mask the fact that some of the larger and older fields are now in decline (Ghawar for example appears to be dropping at around 300,000 barrels a day each year). Thus what appears to be an increase in overall Saudi production may , in fact, end up just maintaining current production.

More on the declining production of the oil fields in Saudi Arabia
I do wish folk would do their homework before they pontificate. From Land of Black Gold I came to the pronouncements of Tim Evans whose money quotes are:
"There is no worrisome lack of supply. With 1.8 million barrels a day of excess production capacity, Saudi Arabia can quickly pump enough oil to offset any disruptions, short of the most catastrophic scenarios."

"Oil prices have been rising for the last 18 months on hypothetical supply disruptions," Evans said. "Every time we come up with a new 'what if?', the oil price manages to go $5 higher."
"Higher prices will eventually cause gasoline demand, which is now about 2 percent higher than a year ago, to taper off. And higher prices will lead producers, including Saudi Arabia, to pump more oil."

In regard to the comments on Saudi production, the Saudi's largest fields are: Ghawar field (the King)Started producing in 1951. Peak production was 6.6 mbd. Current production about 4.5 mbd - water inflow percentages are increasing, output decreasing.
Abqaiq (The Queen) peak production was in 1973 at 1 mbd, now below 400,000 bd.
Saffaniyah (2nd Queen) Started producing in 1957, peak production was 1 mbd, now down to about 770,000bd.
Berri (Great Lord) Peak production was 788,000 bd in 1977 and it now down to around 300,000 bd.

Because of the decline of these major fields about 800,000 bd of Saudi increased production merely offsets the annual drops in production from these fields. Taken with the anticipated increases, and the unavailability of Manifa, as commented on below, Saudi production will not go up nearly enough this year to match demand. Because, taking my shoes off to count, the projected increases minus the unavailable, and ongoing declines, no longer add up to even 1 mbd of an overall increase.


The rest of the blog also provides excellent insights, and is worth a complete read. Here are some other blogs or sites I have run into lately:Land of Black Gold and Flying Talking Donkey
EDIT: And there's a good site list in this blog: Peak Energy Blog
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Unread postby khebab » Wed 20 Apr 2005, 21:07:56

Excellent links! thank you!
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Unread postby SD_Scott » Wed 20 Apr 2005, 23:14:12

Cool, thanks for the links. This'll be fun to watch over the next few years.
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Unread postby arretium » Thu 21 Apr 2005, 16:19:56

SD_Scott wrote:Cool, thanks for the links. This'll be fun to watch over the next few years.


Not really.

...You might want to check out this article pasted below. He's forecasting a much softer landing. IMHO, this is great news as it atleast gives up a good five years. The alternative is if Mr. Simmons is right in which case we are all f**ked.


On thing before you read the article. You'll not that his analysis is based on USGS reports which are routinely discredited around here (with good reason). Nevertheless, using USGS reports, his implicit conclusion is that we face serious difficulties. Read and enjoy.


-------------------------------------------------------
http://www.thebulletin.org/article.php? ... f04cavallo
-------------------------------------
One hundred and twelve billion of anything sounds like a limitless quantity. But in terms of barrels of oil, it's just a drop in the gas tank. The world uses about 27 billion barrels of oil per year, meaning that 112 billion barrels--the proven oil reserves of Iraq, the second largest proven oil reserves in the world--would last a little more than four years at today's usage rates.

In the future, 112 billion barrels will likely prove even shorter-lived. In the United States, gas-guzzling sport utility vehicles and larger homes are deemed essential. As the underdeveloped world industrializes, demand for oil by billions of people increases; China and India are building superhighways and automobile factories. Energy demand is expected to rise by about 50 percent over the next 20 years, with about 40 percent of that demand to be supplied by petroleum.

Ever-increasing supplies of low-cost petroleum are thought to be vital to the U.S. and world economies, which is why the invasion of Iraq and the belief that controlling its 112-billion-barrel reserve would give the United States a limitless pipeline to cheap oil were so dangerous. The war in Iraq will definitely have an effect on the U.S. and world economies, but not a positive one. The invasion, occupation, and rebuilding of Iraq will cost the people of the United States both blood and treasure. But more to the point, Iraq could be a fatal distraction from many fundamental and extremely unpleasant facts that actually threaten the United States--one of which is the finite nature of petroleum resources.

Petroleum reserves are limited. Petroleum is not a renewable resource and production cannot continue to increase indefinitely. A day of reckoning will come sometime in the future. The point at which production can no longer keep up with increasing demand will mean a radical and painful readjustment globally to everyday life.

In spite of that indisputable fact, people behave as if the global petroleum supply is unending. Predictions of the exhaustion of oil reserves seem to have lost all credibility. The public assumes that inexpensive oil will be available essentially forever. The idea that petroleum resources are finite and that petroleum production might peak in the near future seems to have vanished from all discussions of energy policy in Congress, in the press, and even among public interest groups.

This surreal situation is due to several factors. One, certainly, is that pessimists have cried wolf too often. Forecasts of imminent shortages of oil, food, and other natural resources are confounded by the enormous display of material goods that envelops consumers in the West. For most people, the market price of any commodity is what signals shortage or plenty. Time and again, collapsing oil prices have succeeded rising oil prices, leading to the belief that oil will always become cheap again. That oil supplies are currently abundant and inexpensive and have been for nearly 20 years, and that the models used to predict peak oil production are not easy to understand, appear to ignore economic factors, and are based on proprietary data, explain to some degree the present feeling of permanent abundance.

In reality, the differential between petroleum production cost and market price is so large that market price cannot be used as a measure of resource depletion. For example, the variation in the average price of oil between 1998 ($10 per barrel) and 2000 ($24 per barrel) had nothing to do with depletion of reserves and everything to do with an attempt to exercise "market discipline" by the Organization of Petroleum Exporting Countries (OPEC).

But the most important reason there seems to be an unending supply of oil is the activity of non-OPEC producers. Oil production is immensely lucrative. Large amounts of petroleum have been and will continue to be produced outside the Middle East at costs that are very low, $5-$10 per barrel, compared to the desired OPEC price range of $22-$28 per barrel. The opportunity to realize extraordinary profits provides irresistible pressure to produce as much oil as possible, as soon as possible.

Yet oil is a finite resource, and there are only so many places to look for it. Sooner or later petroleum production will decline, so sooner or later the prophets of depletion will be correct. The question then becomes: Can a peak oil forecast be made that is useful to the petroleum industry and to consumers, one that will alert them to the problems and allow for a redeployment of resources?



Answering that question requires an understanding of why the world's rising petroleum needs are being met without skyrocketing prices or supply shortages.

Everyone knows that the science and technology underpinning computers, telecommunications, and medicine have advanced dramatically over the last 20 years. The proof is everywhere, from ever more powerful personal computers, to increasingly sophisticated cell phones, to new medical imaging technologies and pharmaceuticals.

Unknown to most people, however, advances in geological sciences and petroleum technologies have been equally profound and dramatic. Since the 1970s, plate tectonics has been providing a uniform framework for understanding the geology of the Earth's surface (including petroleum formation). Much as X-ray and nuclear magnetic resonance tomography examine structures within the human body non-invasively, three-dimensional seismography now allows potential oil-bearing formations to be evaluated in great detail. Nuclear magnetic resonance probes are used to determine porosity and hydrocarbon content as well as to estimate the permeability of these formations. Petroleum deposits are being brought into production on the continental shelves off Texas, Brazil, and West Africa in water up to 8,000 feet deep--areas that were, until recently, inaccessible. Technological advances like sub-sea terminals, directional drilling, and floating production, storage, and offloading ships have been developed to exploit smaller, previously uneconomic or unreachable deposits. Sophisticated science and technology coupled with unparalleled profitability has provided the foundation for the wide availability of oil.

Yet the same advances in geology and engineering that have provided consumers with seemingly limitless petroleum also allow much better estimates to be made of how much oil may ultimately be recovered. After a five-year collaboration with representatives from the petroleum industry and other U.S. government agencies, the U.S. Geological Survey (USGS) completed a comprehensive study of oil resources. The "USGS World Petroleum Assessment 2000" is the first study to use modern science to estimate ultimate oil resources. [1]

The importance of this assessment is difficult to overstate. Previous world oil resource evaluations have ranged from crude "back-of-the-envelope" calculations to estimates based on proprietary databases, and have often lacked enough detail to allow a comparison between production and estimated reserves. We now have credible, easily accessible long-term production records and science-based resource estimates for all of the important oil producing regions in the world--crucial for understanding how oil production might evolve over time.

The USGS assessment allocates reserves to three separate and distinct categories. The first is "proven reserves," or petroleum that can be produced using current technology. The second category is "undiscovered reserves"--oil deposits that are highly likely to exist based on similar areas already producing oil. The third category is "reserve growth" and represents possible production from extensions of existing fields, application of new technology, and decreased well spacing in existing fields. Oil in this last category can be extracted much less rapidly than oil in the proven and undiscovered categories. (For purposes of determining the approximate year of peak or constant output, the best that can be hoped for is that all proven reserves are produced and all undiscovered reserves are found and produced as rapidly as needed. Petroleum from reserve growth, produced at much lower rates, can be ignored. According to the USGS, it is available only to lengthen the period of peak production or to reduce the decline in a field's output.)



As of January 1, 1996, OPEC's proven and undiscovered reserves amounted to about 853 billion barrels, while similar non-OPEC reserves were 769 billion barrels, according to the USGS assessment. Based on actual production patterns in many non-OPEC oil producers, output can increase until there remains between 10 and 20 years of proven plus undiscovered reserves (as determined by the USGS), at which point a production plateau or decline sets in, depending on the reserve growth that is actually available.

Given that non-OPEC production rates are nearly twice as great as OPEC rates, and assuming stable prices and 2 percent per year market growth, non-OPEC production will reach a maximum sometime between 2010 and 2018 based on resource limitations alone (assuming complete cooperation of producers and that all undiscovered oil is actually found and produced as rapidly as needed). [2] Once this happens, OPEC will control the market completely, and it is unlikely that production will increase much longer.

Yet this simplistic analysis is too optimistic. There is no such thing as "non-OPEC oil," but rather U.S. oil, Norwegian oil, and oil produced by various other countries. In particular, about 39 percent of non-OPEC proven plus undiscovered reserves are located in the former Soviet Union. It is only a matter of time before these countries reach an agreement with OPEC on how to divide the oil market, at which point the current illusion of unlimited oil resources will end, not due to resource constraints but to political factors.

Yet the U.S. public, industrial and political leaders, environmentalists, and policy-makers in general do not believe that they need to be concerned with the finite supply of oil and its unfavorable (from the U.S. perspective) geographic distribution. As noted earlier, the overwhelming majority behaves as if inexpensive oil will be readily available far into the distant future.

This attitude is reflected in U.S. policy toward Iraq. One might expect that a major consequence of the U.S. conquest of Iraq would have been full control of Iraqi oil reserves, reducing or eliminating the ability of OPEC to set prices, and giving the United States a permanent--because oil is forever--overwhelming strategic advantage. It would allow the United States to dictate production rates and lower prices, which would serve two important aims. Reduced prices would reward consumers in the West, buying their support for U.S. policies. It would also deprive oil producers of the revenues with which they could challenge the U.S. domination of the Middle East. Oil prices could be expected to drop to between $15 and $20 per barrel once existing Iraqi fields were refurbished and large new deposits were developed.

However, lower prices would stimulate consumption and decrease the incentive to develop more inaccessible reserves, essentially those of the non-OPEC producers. If non-OPEC producers fail to develop those harder-to-get-at reserves, peak oil production will more likely occur earlier, at the front end of the 2010-2018 forecast. So the very success of the current effort to seize control of the Middle East would doom U.S. imperial ambition to failure within the next 10 years, from an oil supply standpoint.

This scenario is now implausible given the bitter Iraqi resistance to U.S. occupation, and it is not clear when Iraqi production might reach, much less significantly exceed, its pre-invasion level.



To understand what may unfold, given current levels of sabotage and chaos in Iraq, one must examine how the petroleum marketing system has changed over the past year, and in particular the role that OPEC producers have played.

In 2002, Iraqi oil production averaged two million barrels per day. The United States must have understood that an attack might interrupt production, which would in turn cause a large increase in the price of oil. Since this would have a severe negative impact on the world economy, it would further inflame anti-American sentiment throughout the world and even turn U.S. voters against the enterprise. The conclusion: Lost Iraqi production had to be replaced. Thus, an agreement was reached with OPEC to stabilize the markets by increasing production levels as needed.

In March 2003, the Saudi oil minister reassured the International Energy Agency of Saudi Arabia's longstanding policy and practice of supplying the oil markets reliably and promptly, and highlighted the collective responsibility that producing countries have shown in addressing the concerns of world oil markets. This was most likely viewed as a temporary measure, as it was assumed that Iraqi production would be restored and expanded rapidly after the United States took charge.

In addition to the impending interruption of Iraqi production, in early 2003 Venezuelan oil production was far below its OPEC quota due to a conflict between populist president Hugo Chavez and the business community; Nigerian production was also depressed by civil strife.

OPEC rose to the occasion (or, more likely, felt compelled to rise to the occasion, given the huge U.S. military presence in the Persian Gulf in preparation for war) and increased production by about 3.2 million barrels per day--equivalent to the production of the Norwegian North Sea sector--virtually overnight, more than compensating for lost Iraqi, Venezuelan, and Nigerian production.

About 65 percent of the increase came from just two countries, Saudi Arabia and Kuwait; Saudi Arabia alone contributed more than half and probably controls what remains of any spare production capacity.

The critical role that OPEC, in particular Saudi Arabia, plays as the swing producer for the world oil market is clearly evident from this episode, which allows one to quantify the ability of the Saudis to affect the world oil market and the world economy.

The U.S. assault on Iraq has not undermined the power of OPEC and Saudi Arabia. On the contrary, it has if anything enhanced that power. This will not change until Iraqi oil production significantly exceeds its pre-invasion level. Thus, even in the short term, and on the most cynical level, U.S. Iraq policy vis-à-vis oil has been a failure.

Oil supplies are finite and will soon be controlled by a handful of nations; the invasion of Iraq and control of its supplies will do little to change that. One can only hope that an informed electorate and its principled representatives will realize that the facts do matter, and that nature--not military might--will soon dictate the ultimate availability of petroleum.



1. T. Ahlbrandt (project leader), "The USGS World Petroleum Assessment 2000." The assessment is available at www.usgs.gov and on compact disc. A detailed analysis using the assessment appears in Alfred Cavallo, "Predicting the Peak in World Oil Production," Natural Resources Research, 2002, vol. 11, pp. 187-195. Production statistics, based on data from the International Energy Agency, are available in a variety of trade publications, including Oil and Gas Journal, World Oil, and Petroleum Economist.

2. The most popular method used to predict a peak in oil production is in M. King Hubbert's monograph, Energy Resources: A Report to the Committee on Natural Resources, National Academy of Sciences-National Research Council, Publication 1000-D, December 1962. Hubbert noted that resource production often (but not always) could be described by a logistic growth curve, and used oil production records and estimates of proven oil reserves made by the American Petroleum Institute's Committee on Petroleum Reserves to estimate the year of U.S. peak production. Hubbert does not discuss the assumptions implicit in his model, among which are stable markets, excellent profitability, and affordable prices for oil. See also Colin Campbell and J. H. Laherrere, "The End of Cheap Oil," Scientific American, March 1998, pp. 78-83. The Oil and Gas Journal has also recently published a series of articles discussing the future of petroleum and its alternatives. See Bob Williams, "Special Report: Debate Over Peak Oil Issue Boiling Over, With Major Implications For Industry, Society," Oil and Gas Journal, July 14, 2003.
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Ghawar pumping a 30% water cut??

Unread postby FoxV » Mon 16 May 2005, 15:46:54

This was from a link in the "Otherside of depletion" article posted up front Figures from Oman
in here its mentioned the Ghawar is now at 30% water in the oil. I read that Ghawar was at 6% water for 2000(?)

now I don't know much about oil pumping and extraction, but an increase of 6% water cut to 30% water cut in 5 years cannot be good. Can anybody confirm these numbers and elaborate on the implications
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Unread postby nero » Mon 16 May 2005, 15:57:52

Well the north end of Ghawar has a water cut of about 36% according to Saudi Aramco. Look at page 18 of the following pdf presentation:

CSIS February 24 2004 Saudi Aramco Presentation
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Unread postby dauterman » Mon 16 May 2005, 16:37:04

Hi, Ghawar's delpetion, water cut, etc. have been discussed again and again:
link1
link2
link3
link4
link5
link6
There really isn't much left to say that hasn't already been said.
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Unread postby FoxV » Mon 16 May 2005, 18:26:12

sorry you're right. I actually read some of those topics already but must have skimmed over the water cut numbers (sometimes there's a lot to catch up on in this site).
I was aware that Ghawar was depleting, but that water cut percentage caught me off gaurd.
ok, sorry, nothing to see here, you may all go about resuming your normal levels of panic
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Unread postby rockdoc123 » Mon 16 May 2005, 21:45:38

OK ....new to the forum and yes most was discussed here re: water cut and Ghawar. However the one thing you need to remember is 30% water cut is not that high. Many fields onshore are capable of producing economically at 90% water cut. All that is required is an economical means of disposing of the water.....which costs money. So really the question is "what is the makeup of the formation water for Ghawar?". No doubt it would need treating but the Saudi's are currently ramping up their desalination plants (presumeably using the southern Rub a Khali gas as a power source)...perhaps there is an economical way of treating the produced water and using it for irrigation...crickey it's a desert! At 50 dollar a barrel oil it is likely that all sorts of water disposal schemes are viable.
The huge uncertainty in all of this is of course the fact the Saudi's play their cards close to their chests...and the fact that they have recently said no new contracts will be awarded to foreign companies suggests may suggest they just do not want their dirty laundry aired in public.
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Unread postby nero » Mon 16 May 2005, 22:23:50

I believe most of the water they produce is really sea water they had initially injected into the formation to sweep the oil. So presumably they recycle the produced water back into the formation at the injection sites.
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Unread postby rockdoc123 » Tue 17 May 2005, 09:17:06

Sorry I should have been more clear. When I say produced water it simply means water which is recovered at the separators. This is likely a mix of injected and water which was originally native to the acquifer. The picture is likely complicated in that some producing wells will see injected water breakthrough much earlier than others. Also, as pointed out by others, Ghawar is not one huge single field which complicates the picture.
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Trouble in the World's Largest Oil Field-Ghawar

Unread postby knoppix2004 » Wed 14 Sep 2005, 16:21:36

Some people may wonder "what is an injecter" and "how do turn producer into an injecter". First thing you need to know why are they doing that in Ghawar. Here is a nice links for ya :) link
"At Ghawar,' he said, 'they have to inject water into the field to force the oil out,' by contrast, he continued, Shayba's oil contained only trace amounts of water. At Ghawar, the engineer said, the 'water cut' was 30%."
Last edited by Ferretlover on Wed 18 Feb 2009, 09:36:11, edited 1 time in total.
Reason: Merged with THE Ghawar Thread.
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Re: Trouble in the World's Largest Oil Field-Ghawar

Unread postby Bedevere » Wed 14 Sep 2005, 22:57:49

Yeah, they have been getting a huge water cut for quite some time now and it keeps getting bigger and bigger. Not a good sign. I wonder what % water cut it must be to not be worth pumping anymore?
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Re: Trouble in the World's Largest Oil Field-Ghawar

Unread postby rogerhb » Wed 14 Sep 2005, 23:42:15

When the ( amount of energy to run the pumps to inject the water ) is more than the ( contained in the oil minus the energy to ( transport and refine ) )
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Re: Trouble in the World's Largest Oil Field-Ghawar

Unread postby Bedevere » Wed 14 Sep 2005, 23:55:31

rogerhb wrote:When the ( amount of energy to run the pumps to inject the water ) is more than the ( contained in the oil minus the energy to ( transport and refine ) )

That's what I mean. But what is the number? 50%? 70%? 80%?
There are too many unknown variables to work it out myself
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Re: Trouble in the World's Largest Oil Field-Ghawar

Unread postby sol » Thu 15 Sep 2005, 00:50:04

Mmm....just as I suspected, Ghawar is relegated to the history books as the greatest field ever :wink:
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Re: Trouble in the World's Largest Oil Field-Ghawar

Unread postby 0mar » Thu 15 Sep 2005, 03:15:56

Injecting water into a field is standard the practice. While the water cut is alarming, it is by no means a SHTF ordeal.
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Re: Trouble in the World's Largest Oil Field-Ghawar

Unread postby sklump » Thu 15 Sep 2005, 08:01:06

I understand that once the water cut hits about 40%, it's over. But I've read citations as low as 27%.

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Re: Trouble in the World's Largest Oil Field-Ghawar

Unread postby rockdoc123 » Thu 15 Sep 2005, 10:36:17

I understand that once the water cut hits about 40%, it's over. But I've read citations as low as 27%.


Well that's just stupid. Making emphatic statements such as this with no technical argument creates more confusion than is needed.

There is no magic water cut number. As I have said numerous times on threads here many fields produce beyond 90% water cut. The key is permeability anisotropy in the reservoir, presence of fracturing and apparent mobility ratio mainly. If those are understood well enough it is possible to control water influx in many fields. In terms of when it all ends, it comes down to economics. Once operating costs reach revenues the wells would be shut in. That being said...oil price keeps rising..the Saudi's have been converting all of their pumps to run from electricity supplied from the 100 or so TCF they have discovered in and around Ghawar so revenues are going to increase much faster than operating costs, I very much doubt economic limit is anywhere in sight.
The sweep pattern shown in the article is quite typical of a water flood that is working very well. Unfortunately the picture is just from the south end of one of the fields that make up the greater Ghawar complex. Recent presentations by Aramco suggest that A'in Dur and Shadgun which are the best fields in the complex have produced 60% of their assessed ultimate recoverable oil ....current production has been relatively flat for the last five years and water influx is steady at 30%. Although one really needs pressure data and well by well production profiles it seems to me that there is no smoking gun here that would indicate Ghawar is about to go up in smoke.
Not having access to Saudi production and exploration data makes it very difficult to predict what sort of future production capacity the world will have. That being said let's not play Chicken Little unless it is based on some sound technical analysis.
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Re: Trouble in the World's Largest Oil Field-Ghawar

Unread postby Sparaxis » Fri 16 Sep 2005, 17:16:55

Rockdoc, I appreciate greatly your patience at repeating yourself to clarify oversimplified assertions.

And you are right--Daqing, China's only super-giant field--is still producing with a 90+% water cut. It peaked in 1998 and has been declining at about 3-4% a year since then, but the water cut has been well above 50% for several decades.

I think this is a good example of where a straight energy in-energy out calculation is really misguided, and that's because of not taking the quality of energy -- or perhaps utility -- into account (and how its reflected in price). Even if--in BTU terms--the nat gas used to generate power to run pumping stations and so on equaled or even exceeded that of the oil pumped out, it would continue, simply because in monetary terms not all BTUs are equal. And in Saudi, natural gas BTUs are a lot cheaper than oil BTUs.
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