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No Peak Oil - Why Then is Saudi Aramco Opening Old Wells for Heavy Crude?

Following the Iranian Revolution in 1979 demand of oil from Saudi Arabia fell from ten million barrels per day (bpd) to three million bpd. As a result of the reduced production many small oil wells were closed down, including the Dammam oil field, home to Saudi Arabia’s oldest wells. Sadad al- Husseini, once the executive vice president for exploration and development at Saudi Aramco, said that, “we simply didn’t need small fields like Dammam, and in fact shut in fully or partially many other fields including Khurais, Khursaniya, Qatif, Abu Hadriya, Harmaliyah and several others.”

Currently oil demand is at high levels once more and due to supply fears from Iran countries are always looking to increase their output. Saudi Aramco, the world’s largest oil exporter, has recently announced its intentions to re-open the Dammam field after 30 years, according to an EIU report. Husseini said that “the Dammam field can operate easily with current technology and Saudi Aramco conducted a 3-D seismic survey over the entire area almost 10 years ago,” which leads them to believe that it still holds as much as 500 million barrels of heavy crude oil and will increase their production by 100,000 bpd.

In the 30 years since its closure the Dammam area has changed vastly and is now surrounded by metropolitan areas, which could make drilling for oil a very difficult challenge, and one that will receive much protest and opposition by local residents. However Husseini has assured that Saudi Aramco will proceed “in the most modern, environmentally sensitive and professional manner that least affects the adjacent community.”

Aramco is also undertaking a project to increase production of heavy crude at the world’s fifth largest oil field, the Manifa field in the Persian Gulf, in order to maintain total oil production levels at 12 million bpd.

By. James Burgess of Oilprice.com

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  • jakob on March 24 2012 said:
    Far from trying to keep the price of oil up, the USA has tried consistently to get the price of oil down.

    Look at history. The IEA were designed to be an independent organisation to report on oil usage...within weeks the USA sought to confuse the situation, and came up with the EIA, a non independent government body whose sole aim is to play down peak oil, and play down the oil shortages, which would otherwise increase the price furtther.

    Don't believe me, just call up some of the USA's own CIA reports, or the latest report from their military so concerned about the supply of oil to the USA for the future? Just look for yourself.

    WTI price is now discredited, as everyone knows its rigged, and why there is such a growing gap between WTI and Brent.

    With WTI being deliberately based on a limited refining capacity in Cushing, which has NO ports, is inland, and where by causing a backup at Cushing the EIA can report about oversupply of oil, and knock the WTI, but no one believes them any more, because everyone in the industry knows Cushing is an artificial arbiter of oil prices, and why the Saudis and others don't consider it as valid any more.

    Even the recent posturing by Saud to keep the price of oil down, is absolute rubbish, because they don't have that capacity, and that was proved in the year, and just ask yourself with the USA via the EIA suggesting there was a glut of oil to keep the oil price down, why would the Saudi's then want to load up 11 tankers (2million bbls each), to send to the US if they were already so oversupplied?
  • jakob on March 24 2012 said:
    Abiotic. Do people really still believe in that? Tim, after a long period of time why would you think a well would partially fill up and return to 20% higher. Only one sistuation I know of offshore Louisiana had the phenomenon of what was thought to be a depleted reservoir suddenly coming back higher, but what is left out of that is the fact that there were several earthquakes that could have opened fissures from the original reservoir, equivalent to a thousand times the force of a frac, and why that could then cause previously trapped oil in another seam, to leak through fissures into an existing tapped reservoir.

    If Abiotic oil was correct. ALL wells would replenish, and you have a look at the number of plugged and abandoned wells....so it doesn't happen.
  • Jakob on March 24 2012 said:
    I don't know about an avatar EyesWideOPen, but it appears you have your eyes and your logic completely shut down. Of course Peak Oil will occur or has occur, and I note you comment about 'zero credibility given the facts', but don't see any of these so called facts, but where the facts actually support overwhelmingly Peak Oil.

    Now for a few FACTS.
    Originally world total supplies did not include either sour oil or heavy oil, yet today we have to use both to prop up production.

    Over 80% of world oil production is utilising EOR, usually by means of water injection in order to keep up existing production.

    Count the number of Super Giant Fields that are being reported these days?

    Then look at the shocking depletion figures last year which shocked experts, giving full credibility to the Peak Oil phenomenon where once depletion starts, production can literally drop off the scale.

    The expected depletion was 6% the actual depletion was 9%.

    Now work out what 9% depletion is in terms of billions of barrels of oil, and then see if you can even match it with new fields, just to sustain existing levels?

    A billion barrel field sounds great....but currently would last just over 10 days, even if 100% recoverable, although recoverability can be as little as 20%.

    The cost of finding new oil must be apparent to anyone with a brain, with ever deeper drilling, ever more inhospitable areas of the world, and often a time delay of 5-10 years before proper production from a complete field, resulting in costs alone for some oil being in excess of $80 bbl.

    The fact is the super giants depletion rates are starting to fall off a cliff, even with enhanced oil recovery techniques, and even including oils that were not even sellable in the past.
  • EyesWideOpen on February 21 2012 said:
    One word Frank>> ABIOTIC
  • george on February 20 2012 said:
    Interesting that Saudi is not able to surge with current online wells, but must go to wells they have not used in 30 years...They may be able to surge, without the old wells but unfortunately, they may not be able to sustain 12.5 - 15 mpbd
  • Frank on February 20 2012 said:
    Peak Oil isn't that tired a phrase, "Eyes" ... regardless of industry trolls - or fools - whichever you are, who choose to believe in the conspiracy of some imaginary "they" who control everything, rather than the simple laws of physics and finite supply.
  • Fred Banks on February 20 2012 said:
    Mr Burgess, Saudi Arabia has ten million barrels a day of SUSTAINED capacity, probably, and twelve million of surge capacity. You can read my oil book to find out what surge capacity is.

    Let me also point out to anyone whose brain is not in working order, that crude oil is very close to peaking. Of course, in reality it doesn't make any difference what it is: OPEC WANTS TO BANK A TRILLION DOLLARS THIS YEAR, AND THEY WILL DO IF THE GLOBAL MACROECONOMY DOES NOT GO INTO THE CAN. I say good for them, because if people and their political masters can't understand the simple logic of the world oil market, they deserve what they get.
  • EyesWideOpen on February 20 2012 said:
    "Peak Oil" Pfffft!! Oh come on James...that tired old worn out ruse has been more than sufficiently proven to be a means by which oil prices can be artificially inflated by creating a percieved supply deficit... it has however less than zero credibility given the facts!! Suggesting the Saudis opening of old fields has anything to do with "peak oil" is laughable...as in any business it is all about supply & demand, the Saudis forsee a supply issue and are simply shoring up their production to meet demand and make a killing in the process. Nothing to see here, move along
  • Tim moynahan on February 20 2012 said:
    After that long a period of time pressure would at least partially fill back up oil field perhaps returning levels up to twenty per cent higher since it was closed as was said in dune the spice must flow

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