Oil to spare, Saudi claims
Analyst doubts its supply
May 7, 2004, 12:00AM
By NELSON ANTOSH
Copyright 2004 Houston Chronicle
Saudi Arabia has long been considered the bedrock of the world's oil supply, holding 25 percent of all reserves.
But that boast may be coming to an end sooner than the Saudis would like to believe, according to noted Houston energy expert Matt Simmons, who participated in a panel discussion Thursday on world oil supplies at the Offshore Technology Conference.
Simmons' well-publicized contention that the Saudis can't be counted on to bail the world out of any future energy crunch has stung the Saudi government.
Just a few days ago at a Paris oil summit, the Saudis claimed the country could pump nearly twice as much as it is now, if need be, for 50 years.
On Thursday, that debate reached the OTC.
The panel members, who just finished thrashing out whether there was an impending oil crisis, were in the midst of taking questions from the audience when the reservoir manager for Saudi Aramco, the national oil company, stood up in the packed meeting to reassure the world that his nation has plenty of oil and more to be found.
Nansen Saleri of Dhahran said that Saudi Arabia has huge proven reserves equal to 260 billion barrels, and that figure is "very conservative."
Plus, there are "a lot of vast areas, as big as California" where oil hasn't been looked for that are believed to contain more than 100 billion recoverable barrels, Saleri said.
For the technically oriented group, he described how little water was coming up with the oil in certain fields.
Some suggest that excessive water is a sign of declining fields.
Simmons, chairman and chief executive officer of Simmons & Company International, an investment banking firm that specializes in energy, said his doubts were raised by plowing through more than 2,000 Society of Petroleum Engineers papers on Saudi oil fields, some of them going back four decades.
Simmons said that if there were greater transparency in the industry, some of his skepticism might be allayed.
In what may be a move toward providing greater information, Saleri said Saudi Aramco would support Simmons' concept that oil companies should provide 13 types of data so analysts don't have to operate in the dark.
The only question is whether it's 13, or 23, or seven, he said, in that the industry should agree on a standard.
Simmons says that in the case of wells, for instance, a company ought to be specific rather than general, like specifying it has 1,300 coal seam wells in the Powder River Basin.
*********************************************************
When I read the part about the Saudi reservoir manager standing up at the conference, I thought of that classic Shakespeare line, "Ahhh, but thou doth protest too much!" (or something like that).
Looks like we will finally get a chance to quit screwing around trying to guess at what the Saudis have or don't have, by the end of the year or so we will have the acid test of seeing how they do after a period of time with all their wells cranking full out. |
