Saudi Arabia halts $100bn oil expansion programme

[alp227]

Source: FT

Saudi Arabia has halted the $100bn expansion of its oil production capacity after reaching a target of 12m barrels a day as the kingdom believes that new oil sources will meet rising demand.

Khalid al-Falih, chief executive of state-owned Saudi Aramco, said on Monday that pressure on Riyadh to raise its output capacity had “substantially reduced”, the clearest indication yet that the world’s top oil producer is not pushing ahead with an assumed expansion plan to 15m b/d by the end of 2020.

The comments put a cap at least temporarily on a $100bn expansion program that started in the early 2000s when Saudi was able to produce about 8.5m b/d. The halt comes in spite of tightness in the oil market due to ongoing production disruptions in Libya, Syria and Yemen.

Oil prices reached a two-year high of more than $125 a barrel this year after the civil war broke in Libya but since then the cost of Brent, the global benchmark, has fallen back to $105 a barrel due to the impact of the financial crisis.

Read more: http://www.ft.com/cms/s/0/967a332a-146d-11e1-8367-00144feabdc0.html

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google the title for full article

[demosincebirth]

1. I can't begin to imagine how much fucking oil they have.

[ret5hd]

2. Not as much as they tell everyone they have.

they are pumping water into the ground at a rate equal to the oil they are getting out. their talk of putting more straws into the same glass of soda water doesn't increase their reserves, it would just increase the amount of water they'd have to pump in the ground to force the oil out.

[demosincebirth]

4. They do that in Texas to get the last drops of oil in those 100 year old

fields. Never heard of the Saudi's needing to do that.

[NickB79]

6. Google "water cut" to get an idea of what's going on

Back from 2004: http://www.gasandoil.com/news/middle_east/39e195d2933a516d2ca317e071302812

"Others have noted how the percentage of water brought up with the oil has been growing on Ghawar. There are published reports that Ghawar has from 30-55 % water cut. This means that about half the fluids brought up the well are water. Today the decline rate is 8 %. Thousands of bpd of production must be added each year.
"The big risk in Saudi Arabia is that Ghawar's rate of decline increases to an alarming point," said Ali Morteza Samsam Bakhtiari, a senior official with the National Iranian Oil Company. "That will set bells ringing all over the oil world because Ghawar underpins Saudi output and Saudi undergirds worldwide production.""

Almost 8 years later, and I can't imagine things have gotten any better for them.

[happyslug]

5. Saudi Arabia peak production POTENTIAL is believe to be only 12.5

Press Release from 2008:
http://www.peakoil.net/press-releases/aspo-and-peak-oil-theorists-challenge-saudi-arabia

The Key Paragraph is this one:

If another 200 Gb of the 700 Gb of oil in place is added to reserves, the recovery factor now increases from a very large 54% to an incredible 83%. The average global recovery factor to date is only 29%, and even the great expert on the subject Merling of Statoil believes that there is only a possibility of increasing this average number to 38% in the future.

http://www.publicserviceeurope.com/article/655/peak-oil-are-we-sleepwalking-into-disaster
http://en.wikipedia.org/wiki/Oil_reserves_in_Saudi_Arabia


Association for the Study of Peak Oil and gas (ASPO) Web Site:
http://www.peakoil.net/

Worse, one of the leak cables leaked by Wikileaks states that the Saudis have told the US Government that they (The Saudis) have overstated their oil capacity by at least 40%:
http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks

The 2007 Cable with the statement that Saudi Arabian Oil is over stated by 40%?:
http://www.guardian.co.uk/business/2011/feb/08/oil-saudiarabia?intcmp=239

11-2-2011 Report on Saudi Oil:
http://www.greenprophet.com/2011/11/saudi-peak-oil-could-affect-world-in-2012/

[bhikkhu]

3. That 12mbpd is "theoretical production" - which is something the Saudis specialize in

is their actual production for the past few years. Insiders say they have been drilling like fiends to maintain the level as they have - but it is nowhere near 12mbpd.

On the other hand, they said earlier in the year that they have no intention of increasing capacity in the this generation, and they have shown more signs of slowing and declining production than increasing it. All accompanied by the usual theatrical obfuscation.

[NickB79]

7. They're trying to stretch out what oil they have left to prevent a catastrophic collapse

Like the one's we're seeing in Mexico and Europe's North Sea.

Party's over, people.

[Nihil]

8. Yep!

>> pressure on Riyadh to raise its output capacity had “substantially reduced”

=

"Don't be stupid! If the truth comes out too quickly, we're screwed ..."