 |
Louisiana Light • 4 days | 72.39 | +1.98 | +2.81% | ||
|
Bonny Light • 3 days | 75.19 | +1.17 | +1.58% | ||
|
Opec Basket • 4 days | 72.79 | -0.28 | -0.38% | ||
|
Mars US • 3 days | 71.39 | +1.89 | +2.72% | ||
|
Gasoline • 10 mins | 2.552 | +0.052 | +2.07% |
|
Bonny Light • 3 days | 75.19 | +1.17 | +1.58% | ||
|
Girassol • 3 days | 77.03 | +1.40 | +1.85% | ||
|
Opec Basket • 4 days | 72.79 | -0.28 | -0.38% |
|
Peace Sour • 8 hours | 65.99 | +1.64 | +2.55% | ||
|
Light Sour Blend • 8 hours | 67.29 | +1.64 | +2.50% | ||
|
Syncrude Sweet Premium • 8 hours | 76.24 | +1.64 | +2.20% | ||
|
Central Alberta • 8 hours | 65.59 | +1.64 | +2.56% |
|
Eagle Ford • 4 days | 66.58 | +2.01 | +3.11% | ||
|
Oklahoma Sweet • 4 days | 66.50 | +2.50 | +3.91% | ||
|
Kansas Common • 5 days | 58.25 | -1.50 | -2.51% | ||
|
Buena Vista • 13 days | 76.15 | -1.09 | -1.41% |
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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
For the latest oil prices visit our homepage.
James Burgess
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…
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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?
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.
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.
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.