Minnesotans For Sustainability©
Sustainable Society: A society that balances the environment, other life forms, and human interactions over an indefinite time period.
Saudi Output Peaked; Due to Decline
Simmons writes in Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy that about 90% of Saudi Arabia’s oil output comes from seven fields, including three fields that have pumped for over 50 years. An unsustainable pace of water injection that may lead some “war-horse’’ fields to rapidly decline with few replacement sources in sight, he writes.
“The ‘twilight’ of Saudi Arabian oil
envisioned in this book is not a remote fantasy,’’ Simmons writes.
Al-Naimi has been trying to assure markets
that Saudi Arabia can meet increased demand as oil prices on the New York
Mercantile Exchange touched $58.28 on April 4, the highest since the contract
began trading in 1983.
Simmons acknowledges that the book, his first, raises more questions than it answers. That’s partly because of the small amount of publicly available information, he said.
“Without this data we are literally flying blind,’’ Simmons said on the sidelines of a May 19 Lisbon conference on ‘Peak Oil.’
Simmons, who paints water-colours for a hobby, describes quickly trying to jot down paintings of fields shown in a presentation during his 2003 trip because he knew he wouldn’t get copies of them.
Simmons said he ran into silence, when trying to get information from current or former members of Saudi Aramco, the state-owned company that handles the kingdom’s oil and gas business.
An energy adviser to US President George Bush, Simmons has called on Saudi Arabia to release more data and hire an independent auditor to verify its figures.
Saudi Arabia estimates that it has more than 264bn barrels of oil. That figure hasn’t changed much in 17 years even though it has pumped more than 46bn barrels from that base.
Saudi Arabia’s oil minister has said the kingdom has enough reserves to last 50 years at 15mn bpd, and concern that oil supplies and reserves are running short are misplaced.
“Don’t be too concerned about this theory of peaking oil’’ production, al-Naimi told a conference in Paris last month.
Nearly all of Saudi Arabia’s production comes from a narrow band on the eastern border of the Arabian Gulf made up of only 17,140sq miles where six of the kingdom’s largest eight producing fields are located.
“Saudi Arabia has all of its hydrocarbon eggs very nearly in one basket, which is now half a century old,’’ Simmons writes.
The biggest of the fields, Ghawar, began producing in 1951 and has pumped over 55bn barrels of oil, more than five times the largest field in the US, Prudhoe Bay.
Simmons compares the Saudi fields with fields
in neighbouring Oman and data for four fields that also produced more than 1mn
bpd, such as Alaska’s Prudhoe Bay, discovered in 1967, and Russia’s Samotlor,
found in 1963.
“All four of these super-giant fields
achieved steady, high production rates for lengthy periods of time before they
finally peaked,’’ Simmons writes. “But after each of these great fields peaked,
production then fell quite rapidly.’’ – Bloomberg.
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