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Saudi leaks: "We've heard it all before"


The Guardian, Wikileaks cables and oil production in Saudi Arabia

Kjell Aleklett, Aleklett's energy mix

The Guardian: “WikiLeaks cables: Saudi Arabia cannot pump enough oil to keep a lid on prices”

The information that has now been leaked about Saudi Arabia’s ability to pump oil is nothing new for me. I have heard it before and Sadad al-Husseini has previously presented this viewpoint publicly several times. What is interesting is that the US ambassador picked up the information in 2007 and sent it to Washington.

At the moment I am working on the chapter in my book “Peeking at Peak Oil” that deals with Saudia Arabia. In it I will be arguing that oil production in Saudi Arabia will be around 7.7 million barrels per day (Mb/d) in 2030 based on extrapolation of the trends we see today. There is a possibility of 10 Mb/d of production but that would require additional measures. In World Energy Outlook 2010 we can read that production was 9.7 Mb/d in 2009 and the IEA expects that it will be 14.6 Mb/d in 2035 which is clearly wishful thinking.

The problem with Saudi Arabia is “recovery factors”. They say that, at the start of production they had over 716 billion barrels (Gb) and that they have a recovery factor of 51%. The global average currently stands at 30% and in future might possibly reach 40%. Saudi Arabia says that they are much better at recovery than others. It is by using the 51% recovery factor that Saudi Arabia estimates their reserves as 226 Gb. But with a recovery factor of 30% their remaining reserves would only be 76 Gb and if it is 40% then the reserves would be 147 Gb. One can interpret the statement by Sadad al-Husseini as meaning that he does not believe in a recovery factor of 51%. Details on this and much more will come later this year when my book is published.

(10 February 2011)



Saudi Reserves

David Strahan, Last oil shock

Much excitement today about the Wikileaks revelation that Sadad al-Husseini, former head of exploration and production at Saudi Aramco, told the US consul general in Ryadh in 2007 that Saudi Arabia’s reserves have been overstated by 300 billion barrels, or some 40%. Sadad has been saying publicly the world’s reserves are falsely inflated by that figure for several years now – as first reported by lastoilshock.com. It just wasn’t clear those 300bn missing barrels were all in Saudi. Or, more precisely, not in Saudi.

(9 February 2011)

and from today:
So, Wikileaks has finally delivered some news you can use. A cable written by US diplomats in Riyadh towards the end of 2007 contains a clear and ‘insider’ forecast of Saudi peak production in the early 2020s. After meeting Sadad al-Husseini, former head of exploration and production for Saudi Aramco, the diplomats reported....(continued on David's blog)



What did we learn from the Saudi cables?

Stuart Staniford, Early Warning
For the most part, the cables just released seem to me consistent with my overall views on Saudi Arabia (developed in 2006-2007). Let me highlight a few points of interest.

In the overheating cable, the US embassy says (in September 2007):
Saudi Aramco is half way through a $50 billion capital investment program that aims to expand Saudi's maximum sustainable daily oil production capacity from 9.5 mbd currently to 12.5 mbd by 2009. In May 2007, Saudi Minister of Oil and Mineral Resources Ali al-Naimi announced that Saudi Arabia would invest $75 billion to move from the world's tenth largest to third largest producer of petrochemicals by 2015. The bulk of these planned enormous capital investments and the megaprojects emerging from them are heavily concentrated in Saudi Arabia's Eastern Province.
I note that here the embassy states as though it's uncontroversial that Saudi Arabian production capacity at the time was 9.5mbd. This was not conventional wisdom...

...My interpretion has always been that Saudi Arabia in this period could not produce more than 9.5mbd, and that the excusions downward were probably not primarily voluntary, but due to production difficulties in tired parts of their fields. However, in this period, the Energy Intelligence group was claiming that OPEC had 4mbd of spare capacity (much of which would have had to be in Saudi Arabia), while CERA was saying there was 2mbd and rising. Apparently the embassy knew better.
(10 February 2011)



Saudi Oil Production and Reserves - Reasons Behind Wikileaks Concerns

Gail Tverberg, The Oil Drum
The UK Guardian published an article yesterday titled WikiLeaks cables: Saudi Arabia cannot pump enough oil to keep a lid on prices, talking about the possibility that as soon as 2012, world oil production may begin to decline because of "peak oil". Saudi Arabia may not be able to raise production as much as claimed, and its reserves may be overstated by 40%. Leanan has put together a post with more about the cables. The Wikileak cables can be found here or here. In this post, we provide a few graphs, plus some links to (and excerpts from) prior posts by Oil Drum staff members about Saudi Arabia's true situation.

Saudi Arabia tells us that they have lots of oil, but if we look at graphs of their historical production, there is nothing that looks like an upward trend. In fact, recent production is lower than it was in the late 1970s and early 1980s...
(9 February 2011)

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