Westexas is back from vacation and is crunching numbers.
westexas on Friday November 03, 2006 at 10:49 AM EST
I suspect that the highest rate ever was in 1980, but I don't know for sure.
As I said yesterday, KSA and the Lower 48--based on HL--have about the same Qt, but Ghawar has already made 10 times as much oil as the largest field in the Lower 48.
This gives you and idea of how hugely exposed KSA--and the world--are to a near certain decline/crash at Ghawar.
Look at the whole string of warning signs:
*KSA couldn't ramp up production after the hurricanes
*The KSA stock market crash in the spring (don't know what has happened since)
*KSA's announcement that they could not find buyers for all of their oil--even their light, sweet oil, as prices headed over $70 per barrel in the US
*KSA's annnouncment that they were importing fuel oil products in August
*The announcement of curtailment of petrochemials projects because of a shortage of natural gas in KSA (natural gas production would fall as oil production fell)
*And finally, the announcement that production is down by another 380,000 bpd
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westexas on Friday November 03, 2006 at 12:21 PM EST in response to..
"I was just thinking about your last question about how we can expect production to increase with the top 4 fields in decline.
I knew that Daiqing had supposedly peaked awhile ago, but I'd have to look up the details. Burgan and Cantarell are most likely just slightly past their peak."
I think that Ghawar, at least until recently, was supposed to be producing about 5 mbpd or so. Again, there is quite a bit of fog surrounding issue. However, the key point to keep in mind is that Ghawar, like Yibal, was redeveloped with horizontal wells, which allowed them to keep production up longer than normal, at least until the water hits the horizontal wells. And again, Ghawar is at about the same stage of depletion at which Yibal crashed.
According to the WSJ article earlier this year, the remaining 800' oil column at Cantarell is thinning at the rate of about 300' per year. The math is pretty simple on this one.
I haven't seen any hard numbers on Burgan, but the Kuwaitis have admitted that it is terminal decline.
A news report earlier this year indicated that the water cut at Daqinig is 90%. Again, the math here is pretty simple.
In the aggregate, the four existing super giant oil fields are all old and are almost certainly all declining or crashing with rising water cuts.
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Just to remined everyone, depending on what the Saudis were actually producing of late, their fourth quarter production will be down by between 600,000 bpd and up to 1,000,000 bpd from their production level when Matt's book was published. Also, note that the Saudis were unable to ramp up their production in the fourth quarter of last year to make up for the hurrican damage. In fact, that is when production started falling.
I would further remined everyone that Ghawar is now at about the same stage of depletion at which an analogoue field, Yibal, started crashing--much to the surprise of the Shell Oil Company, which was in the process of upgrading their surface facilities to handle an expected flood of new oil. Instead, Shell got a flood of new water.
Let me summarize.
There was clearly at least a perceived need for more oil following the hurricanes. The Saudis promised more oil. Were they able to deliver? No. Instead, it required a large coordinated release of emergency inventories.
KSA is now where the prior swing producer, Texas, started declining. Is KSA showing falling production? Yes.
Ghawar is now where an analogoue field started crashing. Is Ghawar declining or crashing? Who knows? We do have what Heinberg reports as a credible source that Ghawar is crashing. And there have been other reports circulating that the water cut is up to 50%.
But fundamentally, the problem is this. KSA--and the world--are highly dependent on one rapidly aging oil field, where the remaining oil is in a rapidly thinning oil column between a rising water leg and an expanding gas cap. From thir point forward, Ghawar--like Cantarell--can have high short term production rates, or higher remaining recoveries, but not both.
The near certain decline of these two super giants (plus the certain decline of the other two super giants), combined with the HL model, is why I am in the "Yes we have peaked crowd."
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