Article

2005-06-28 Arabia

Do the Saudis Really Have Huge Oil Reserves?

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Posted by Barbara Skolaut 2005-06-28 15:43|| || Front Page|| [12 views since 2007-05-07] Top

#1 No, of course not. And what they have is getting "heavier" every year.

Posted by Chuck Simmins">Chuck Simmins 2005-06-28 16:19|| http://blog.simmins.org]">[http://blog.simmins.org] 2005-06-28 16:19|| Front Page Top

#2 I have a couple friends in the oil industry and support a company that specializes in oil exploration. Both say there is a huge amount of oil and natural gas deposits not being used or tapped at the moment. It just isn't cost effective until oil reaches 60-70 dollars a barrel. As for Saudi, I do not know what is going on there. But Columbia, Venezuela and Central America have huge untapped reserves that could keep the US in the black for many decades into the future. Just keep China out of there...

Posted by mmurray821 2005-06-28 16:21|| 2005-06-28 16:21|| Front Page Top

#3 I grew up in Soddiland as an ARAMCOn, left in 1970, but still have contacts among expats and retirees. A problem I have consistently heard is the Saudi-fication of ARAMCO has been a disaster. Non-Americans just don't have the expertise to maximize output and minimize damage to the productive capacity of the oil field.

Also, the Saudi fields were pressurized and would flow up to 10K bbd. Compare that to the sucker pumps we see in the US which might product 1-20 bbd, but require electricity to pump, tank trucks to pick up the oil, etc. Those expenses mean many 'merican wells won't begin to pump until it is economically feasible (i.e. you get more sales revenue that it costs to extract it).

In any case, there is more than enough oil out there (see the Alberta tar fields) IF the price is high enough to justity the expense of extracting the resource.

Posted by Brett 2005-06-28 17:02|| 2005-06-28 17:02|| Front Page Top

#4 :) Good news bad news. SA oil has peaked, SA is no longer a player in the swing market. OPEC is YES! DOOOOOOOMED!

I feel so very bad.

/I hear ya Phil_B

Posted by Shipman 2005-06-28 17:57|| 2005-06-28 17:57|| Front Page Top

#5 Shipman, believe me, you DON'T want the Saudis to peak already.

Because if they do we're past Peak Oil already and you DON'T want to be there.

Forget tar sands and oil shales for now, maybe forever. The question is not when does it become lucrative to start exploitation but can you do it without using more energy in the process than you win.

Right now, the only thing that can help is to curb demand. And we really need to do it now.

I know you won't like it but TAX gasoline higher. Yes it will hurt but if you don't it will hurt more. Curb gas demand with taxes. One dollar more on a gallon. Sounds crazy? No. If you think you can't pay $3,50 a gallon, wait one or two years and you will be paying $5. But to OPEC.

I believe Mr Simmons is up to something.

Posted by True German Ally 2005-06-28 18:25|| 2005-06-28 18:25|| Front Page Top

#6 The problem is, because we don't have visibility on the real state of OPEC reserves and supply capacity, the market can't operate (correctly). If you read the industry commentaries on future oil supply there are regular references to $10/b oil less than 10 years ago. And therein lies the problem, companies wo'nt take the risk of spending billions when there is the risk OPEC will ramp up production, send the price of oil down and cause them to lose huge amounts of money. BTW, there is a widespread belief that SA/OPEC deliberately engineered $10 oil to send a message - develop alternative sources and we will bankrupt you.

Posted by phil_b 2005-06-28 18:31|| 2005-06-28 18:31|| Front Page Top

#7 phil_b
most countries outside the Middle East are at peak or beyon already... Venezuela, Mexico, Norway, UK...

Why should the Saudis have infinite, easy to tap supplies? How much oil have they discovered in the last years?

We may not be heading downstairs yet but we can't take risks to be late.

If the Saudis could significantly increase output they would do it NOW. They know that the oil embargo was a major mistake. It lead to worldwide recession from which many Third World countries never recovered, it made the West look for alternative sources.

If you were a Saudi you would want to squeeze your clients gently, not kill him.

Posted by True German Ally 2005-06-28 18:45|| 2005-06-28 18:45|| Front Page Top

#8 Hard to say for sure what is going on in Mexico. They've had nationalized oil since 1939? There's probably plenty left we could get to if they'd explore porperly. Same for Venezuela. But whether the peak is this yera or 5 years, it seems to be coming. I remember Alaska being discovered when I was in Jr, Higi and there hasn't been anything like that since. But there's still plenty of earth unexplored, especially the part under the ocean.

Posted by Mrs. Davis 2005-06-28 19:18|| 2005-06-28 19:18|| Front Page Top

#9 Yes but the question is not how much oil there is but how much we can make available for the next decades until we managed the transition to something better.

The questions are:

How fast can we get it?
How expensive is it to get it?
How energy consuming is it to get it?

If peak oil comes in ten or 20 years we should resolve the problem.
If it's upon us already we probably can't

Posted by True German Ally 2005-06-28 19:24|| 2005-06-28 19:24|| Front Page Top

#10 Living in right in between 2 major California Oil Fields I can say that we are finding new oil in unexpected places everyday. The facts are we have no idea how much oil we have. US producers have cut back on production of known reserves seeing the oil as money in the bank. They continue to make new finds everyday. I know of one location that is producing 1/3 the amount of oil it did 3 years ago only because the owners of the lease are saving the oil for recovery in the future.

That said we need to find a new way to produce energy, chemicals and plastics and save our oil reserves for lubrication. Dumping the internal combustion engine would be a good idea.

I hear lots of people who are "experts" talking lots of shit on "known reserves" We really don't know crap. Admitting that would be a good start. We could have way less than we think but we likely have way more.

Posted by Sock Puppet 0â Doom 2005-06-28 19:26|| 2005-06-28 19:26|| Front Page Top

#11 SPoD
One thing is clear. It's crazy that we use a ressource as precious for... burning.

Posted by True German Ally 2005-06-28 19:34|| 2005-06-28 19:34|| Front Page Top

#12 Forget tar sands and oil shales for now, maybe forever. The question is not when does it become lucrative to start exploitation but can you do it without using more energy in the process than you win.

Hoping you're wrong TGA. I figure it's just a matter of price. Once oil hits say.... 90 bucks (American :>) There's all sorts of things that can happen, most of which are unforseen. It's like Phil_B sez, we're not running out of oil, but there is a potential shortfall in a couple of years. Unless of course demand falls due to the flu. :)

Posted by Shipman 2005-06-28 19:59|| 2005-06-28 19:59|| Front Page Top

#13 Ship, I say stratify and use other currency, save big dollars that way.

Posted by Red Dog 2005-06-28 20:23|| 2005-06-28 20:23|| Front Page Top

#14 There are only two things you need to know about the whole thing. 1. Energy is THE fundamental input to economic activity. 2. Energy inputs are almost without exception fungible, that is you can replace one with another (given cost and time constraints). So we are dependant on oil only becuase we have not developed other sources of energy (and this problem has been exacerbated by ludicrous 'alternative energy' schemes and of course Kyoto). There will be an economic trainwreck caused by oil supply (lack thereof) and it was completely avoidable.

Posted by phil_b 2005-06-28 21:06|| 2005-06-28 21:06|| Front Page Top

#15 I thought I posted a comment on this, but it seems to have vanished.

Do I need to post my standard spiel whenever someone starts talking about "Peak Oil?"

Posted by Phil Fraering 2005-06-28 22:04|| http://newsfromthefridge.typepad.com]">[http://newsfromthefridge.typepad.com] 2005-06-28 22:04|| Front Page Top

#16 Phil, in a word: Yes. (Please.)

Posted by Jennie Taliaferro">Jennie Taliaferro 2005-06-28 23:32|| http://www.greatestjeneration.com]">[http://www.greatestjeneration.com] 2005-06-28 23:32|| Front Page Top

#17 Oh boy...

OK. Let me see... the peak oil "proponents" basically try to prove that we're running out of oil by plotting the known reserves of oil in a region on a graph and taking that data at face value, _as if the people producing in that region are on the level and have a main goal of maximizing long-term production_.

Well, they don't.

Take Venezuela, for example. Over the last six years or so, PDVSA has both cut back on investment in further exploration and has mismanaged the reservoir management of the wells they've already drilled.

This caused a massive strike, which caused a political crisis for Chavez, who at one point not only fired everyone who was on strike, but _banned them from working in the Venezuelan oilfield ever again_.

SO: You have a whole lot of factors converging to reduce production there now: a lack of investment in new drilling, the reservoir mismanagement (which both reduces the production rate and sustainable levels of production from a formation), the fact that a lot of the people who know how to run things properly are no longer employable, the Venezuelan tax ministry's (and other government agencies') threats creating a "hostile work environment" for those foreign oil companies that were investing in Venezuela (but AFAIK they didn't try to pressure the Chinese, who they'd sold some oil to), and finally, the fact that someone in the government's embezzled about a billion dollars to either their private slush funds, black wetworks projects, or some combination of the two...

And Venezuelan oil production is going to go way down regardless of whether they're actually "running out of oil!"

But these guys are going to plot their data points, and throw some darts for good measure, and say "See! Venezuela has passed maximum oil production, therefore they're in decline and RUNNING OUT OF OIL!"

Posted by Lord Waldemart 2005-06-29 00:09|| 2005-06-29 00:09|| Front Page Top

00:09 Lord Waldemart
23:52 Jennie Taliaferro
23:48 JosephMendiola
23:35 Jennie Taliaferro
23:32 Jennie Taliaferro
23:22 Silentbrick
23:18 Red Lief
23:17 Captain America
23:16 Jan
22:45 Frank G
22:44 Jan
22:36 Sock Puppet 0â Doom
22:35 Sock Puppet 0â Doom
22:32 Silentbrick
22:32 Rex Mundi
22:28 Anonymoose
22:18 Spock
22:14 Frank G
22:05 WITT
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22:04 Phil Fraering
22:03 Atomic Conspiracy
21:58 Red Dog
21:57 Frank G