Remembering and learning from a legend

Ali Morteza Samsam Bakhtiari, one of the world’s foremost experts on the subject of peak oil, died suddenly and unexpectedly on October 30 of a heart attack. Our thoughts go out to Amir Bahman and Golbenaz Samsam Bakhtiari and the rest of the family.

Dr. Bakhtiari’s bio as printed in a 2003 journal read as follows: “[Bakhtiari] is a senior expert in the corporate planning division of the National Iranian Oil Co., Tehran. He specializes in questions related to the global oil, gas, and petro-chemical industries, with special emphasis on the Persian Gulf and OPEC. Formerly, he lectured on design and economics at the chemical engineering department of Tehran University. He holds a PhD in Chemical engineering from the Swiss Federal Institute of Technology at Zurich. 

But for those of us fortunate enough to share some time with Dr. Bakhtiari, we knew him first and foremost as a gentleman and a very warm human being, someone who was as quick with a broad smile as he was with a quip. Anyone who ever heard him speak or who read his many articles (some 70 printed in journals; visit his website at www.sfu.ca/~asamsamb/sb.htm) suspected this truism as well: that Ali was a Renaissance man. He spoke and read at least six languages fluently enough to be able to quote some notable philosophers and authors in their native tongues.

During this century he spoke out and wrote early and often about the subject of peak oil and its looming consequences. His presentations at ASPO conferences in Europe and at other important meetings in Australia, Italy and elsewhere were typified by valuable insights, compelling facts, worrisome projections, and warm humor.

One can’t capture the full range of Ali’s ideas in a short space. What follows are a few clips from several articles by him or about him, plus the full Commentary that he wrote for this publication 21 months ago (2/20/06). They are presented below sequentially. We’ve added an extra page to this issue’s normal 6-page length to include these items. They hold up well
several years later. Indeed, whether we have reached a technical peak in world oil production or whether it comes in a few years, one suspects that Dr. Bakhtiari’s main observations will show keen foresight in the years to come.

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From “2002 to see birth of a New World Order,” Oil & Gas Journal, 1/7/02

“In order to supply this enormous 2020 demand [118.9 million b/d], EIA’s forecast relies on [OPEC nations] producing 57.5 mmb/d by then. OPEC simply cannot produce such amount of crude, whatever the circumstances or the price of oil (EIA assumed an average oil price of only $24.68/bbl, in 2000 dollars, for 2020—yet another amazing assumption)…
“It should also be borne in mind that the highest production capacity OPEC ever reached was 40 million b/d in the mid-1970s. That was a quarter century ago, when the major Saudi, Kuwaiti, Iraqi, Iranian, and Venezuelan oil fields were young and fresh. It is now highly doubtful that OPEC could ever reach 40 mmb/d again, let alone reach 57.5…
“Those still burying their heads in the sand and believing in the sacrosanct market forces are in for shattering shocks (and some will pay dearly in the years to come for having been encouraged to accept theseillusions).”

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From “Middle East oil production to peak within next decade,” Oil & Gas Journal, 7/7/03

“Middle East production should plateau during the present decade before peaking early in the next one. As world production is bound to peak much sooner, the Middle East’s share of global output should increase gradually.”

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From the ASPO-USA Commentary: ON MIDDLE EASTERN OIL RESERVES (Peak Oil Review, 2/20/06) by A.M. Samsam BakhtiariIt is now common knowledge that the lion’s share of remaining conventional oil reserves is concentrated in the Middle East [ME] region. All major reserves’ assessors agree on this crucial point, as shown in Table 1 below.

Table 1. Middle East’s share of global conventional oil reserves

References:
[1] O&GJ, December 19, 2005 (for January 1, 2006).
[2] BP, June 2005 (through end of 2004).
[3] Dr. Campbell, fifth revision, February 2, 2005 (end of 2004).

If the above assessors generally agree on the ME’s predominant share, they tend to disagree on specific estimates of both global and ME reserves.

It goes without saying that when assaying ME oil reserves, one should tread carefully. Because, on the one hand, oil reserves’ estimation is both a science and an art; and, on the other hand, seen from the point of view of most ME countries, oil reserves are more political than geological. Thus, non-scientific views come to prime over science and further enhance the various types of shades that have led to an overall opaque situation in the Middle East.

Middle East reserves 

Focus here will be on the five major ME oil producing countries, the so-called ‘ME Five’ — namely: Iran, Iraq, Kuwait, Saudi Arabia and the United Arab Emirates. Four of the latest available estimates for these major producers are presented in Table 2.

Table 2. Remaining proved oil reserves for “ME Five,” according to the major assessors

References:
[1] & [2] As in Table 1.
[3] ASPO Newsletter #62, February 2006.
[4] February 2006.

Whereas O&GJ and BP mainly rely on published ‘official’ figures (which are usually bloated and highly political), Dr. Campbell has based his estimates upon geological evidence. Thus, he roughly cuts by half the ‘official’ figures. Overall, his estimates are the very best available worldwide and they proved their worth in my ‘World Oil Production Capacity’ (WOCAP) model.

Kuwait

In the special case of Kuwait, Dr. Campbell has lately been vindicated when Petroleum Intelligence Weekly (dated January 20) reported that a senior Kuwaiti oil official had hinted at national reserves of ‘only’ some 48 billion barrels [bnb] — in stark contrast to the official 99 bnb. The fresh estimate came from adding up the following reserves:
     – Burgan field : 20 bnb.
     – Northern fields : 17 bnb.
     – Western fields : 8.5 bnb.
     – Neutral Zone : 2.5 bnb [for 50% share].
Undoubtedly this halving of Kuwait reserves is a welcome revision, and all other ME producers should be encouraged to duly follow suit.

Saudi Arabia

The Saudi Arabian case has been masterfully exposed by Mr. Matthew Simmons in his “Twilight in the Desert” and Dr. Campbell’s 159 bnb estimate looks far more realistic than the official one of 260 bnb. My own opinion stands even lower than that — at roughly half the official figure.

Iran

As for Iran, the usually accepted official 132 bnb is almost one hundred bnb over any realistic assay. If the higher figure was for real, its oil industry would not be struggling day in and day out to keep output at between 3.0 and 3.5 million barrels per day (inclusive of Persian Gulf offshore).

Iraq

To the contrary of my estimated range for Iran, which is lower than Dr. Campbell’s, the Iraqi one is markedly higher. The reasons behind this last divergence are twofold:

(1) The eleven Iraqi oil fields awaiting development spearheaded by the three supergiants of ‘Majnoun’, ‘West Qurna II’ and ‘Nahr Umar’.
(2) The almost untouched ‘Western Desert’ which could provide momentous surprises — based upon the ‘Golden Horseshoe’ theory I have written about in the Oil & Gas Journal.

Reserves’ Twilight

Notwithstanding the importance of conventional oil reserves, their days might now be numbered (both in the ME and elsewhere). Oil reserve estimates were useful in the era before ‘Peak Oil’. But, in the aftermath of the mighty Peak (as, for example, in the present
‘Transition One’ period), they tend to become stale and rather useless, as field by field analysis and prediction takes over (eg., Ghawar, Cantarell). So, it will not be long now before we will have to say goodbye to all these mesmerizing oil reserve figures and dump the whole reserves file into the all-encompassing ‘dustbin of history’…..

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From “Peak Oil and Bakhtiari’s 4 Phases of Transition,” Whiskey and Gunpowder (8/25/06), by Byron King, quoting Bakhtiari directly from an email:

“The four Transition periods (T1, T2, T3, and T4) will roughly span the 2006-2020 era. Each Transition [will] cover, on average, three to four years. The major palpable difference between the four Ts is their respective gradient of oil output decline — very small for T1, perceptible for T2, remarkable in T3, and rather steep for T4. In fact, this gradation in decline is a genuine blessing for those having to cope and adapt.

“It should be borne in mind that these four Ts are only an overall theoretical structure for future global oil output. The structure is thus so orderly because [it is] predicted with ‘Pre-Peak’ methods, ‘Pre-Peak’ assumptions, and [a] ‘Pre-Peak’ set of rules.

“The problem is that we now are in ‘Post-Peak’ mode, and that none of [the] above applies anymore.

“The fact of being in ‘Post-Peak’ will bring about explosive disruptions we know little about, and which are extremely difficult to foresee. And the shock waves from these explosions rippling throughout the financial and industrial infrastructure could have myriad unintended consequences for which we have no precedent and little experience.

“So the only Transition we can see rather clearly (or rather, we hope to be able to comprehend) is T1. It is clear that T1 will witness the tilting of the ‘Oil Demand’ and ‘Oil Supply’ scales — with the former dominant at the onset and the latter commanding toward the close (say, by 2009 or 2010).

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Steve Andrews is an energy consultant and a co-founder of ASPO-USA.