Matt Simmons quoted a retired Aramco executive as saying that, in his opinion, there was no way that the Ghawar URR would exceed 70 Gb. Of course, Saudi Aramco is claiming that horizontal wells have boosted the recoverable reserves in the field, but that is what Shell though they had done at the Yibal Field, where they were expanding their surface facilities to handle an expected increase in oil production, when they were hit with an unexpected flood of new water, which is what I suspect happened at North Ghawar in 2006.

BTW, as an illustration of the conservative reserve scenario, could you post our updated Texas/Saudi graph (with 2006 and estimated 2007 Saudi data) on this thread?

So HSM shows 2015 as projected peak for Ghawar and 2010/11 for KSA en total.

Does Mearns get his short term peak from the start of the 'new' projects coming on-line, and assume they will pump faster than desirable, resulting in reservoir damage?

http://science.reddit.com/info/64fyq/comments/

thanks for your support...

Khebab,

Not sure I understand what's being done here. At the beginning you state "the HSM is trying to model the observed production profile from the discovery curve by simulating the different phases involved in the development of oilfields (initial discovery, planning, build, maturity)". That looks like a discrete simulation. You go on to estimate URRs and remaining capacity from this model, via the RMS error plots.

But:
a) the method by which you estimate λ seems missing. How is any one combination of two independent factors more likely than another? Why would then be consistent? The error from what? The real production....which was governed by politics?

b) at no point, it seems, is the effect of Saudi voluntarily reducing production for years at a time factored in. Given the underlying assumption of URR, etc. are based on smooth geology-only constraints, how can the figures be expected to be right? Indeed, items like fig 7 ring alarm bells in my head - little production but continued addition of supply & reserves?

A good mechanism for sanity checking such a model is to unroll the input data to, say, 1970 and then see what the model predicts. Does it accord with reality and today's prediction?

Hello Khebab, and a happy New Year. A great post to kick off 2008! Before I go any further, a couple of questions.

In Figure 5, what is the basis for the cumulative discovery curve? And what is the cumulative supply curve?

If the Saudis keep claiming they have all this oil, but are unable to deliver, will the US invade on the premise that it is a hostile withholding?

Very nice post. And thanks for finalizing that discovery base, a very helpful resource.

Colin Campbell's estimate is almost equal to HSM – YTF. Your YTF model is giving below 1 Gb/year, meaning that the probability of finding a new field above 1 Gb is very low. In other words, that YTF is probably irrelevant because it represents residual fields that will unlikely see development.

The failure of applying HL directly to Saudi's past production is more apparent than ever. And the HSM is showing to be an interesting tool.

Given the list of named Saudi fields contained in Khebab's article, I wonder if anyone out there has any light to shed on the accounting of the total number that have ever been developed, or which are currently in production. The statements which I am aware of seem somewhat ambiguous, and the truth of the matter seems particularly significant in a context which I will indicate momentarily.

At the April 2004 CSIS confab between ranking Saudi and U.S. officials in which all sides did their best to put a brave image on the situation, Saudi Aramco CEO Abdallah Jum’ah’s stated that

Saudi Aramco's proven oil reserves currently total 260 billion barrels. That's with a B. They are contained in 85 fields and are spread across over 320 different reservoirs. To date only 23 of these fields have been developed and even these fields still contain roughly half of our current reserves. The other half of course is contained in undeveloped fields and there are 62 of them.

Now the 85 field total seems roughly in accord with the lists on pages 366 and 241 of Twilight in the Desert, if Neutral Zone fields and gas fields are subtracted out. The 23 field total for fields that have "to date" been developed - which seems to imply that this is the number of fields that have ever been developed by Aramco - also seems roughly in line with my own accounting, based principally on Simmons' book:

(1) Dammam, Saudi’s first producing field;
(2-7) the six major fields – Ghawar, Abqaiq, Berri, Safaniyah, Marjan and Zuluf;
(8-18) eleven sporadically-producing fields which are the focus of recent redevelopment projects: Manifa; the pair Qatif and Abu Sa’fah; the triad Khursaniyah, Abu Hadriyah and Fadlili; Khurais and three satellites (Abu Jifan, Qirdi, Mazalij); Harmaliyah,
(19-24) six fields developed post-nationalization: Hawtah and four satellites, and Shaybah.

Thus, I reach a total of 24 fields compared to Jum'ah's 23. The only ones which I haven't accounted for by name are the Hawtah satellites, where my number is based on Simmons' statement that "the Hawtah field and three satellites" began production in 1994, and the statement that another, apparently additional, small satellite began production in 1997 (Twilight, p 224).

Some of the ambiguities are as follows:
In Dr. Nansen Saleri's February 2004 CSIS talk (audio recording), he also makes the claim that about half the 260 billion barrels of allegedly proved reserves are contained in fields that are undeveloped, but then he specifically says that Khureis in this accounting is counted as being one of the undeveloped fields, even though it was developed before, and that it was currently not in production. Applying this logic to Jum'ah's statement might indicate that the 23 field total, despite the clear wording, is a figure for fields (then) currently in production only, and excludes a number which have undergone development in the past.

A further ambiguity is the statement which one occasionally reads alleging that roughly half of Saudi Arabia's reserves are contained in only eight fields. (e.g. www.slb.com/media/services/resources/mewr/num1/portrait_oils.pdf).

The issue of accounting for the number of fields that have ever been produced seems particularly significant in light of the 1979 Senate Foreign Relations Committee staff report The Future of Saudi Oil Production. In the context of concerns over possible damage to Saudi Arabia’s best fields from pushing them too hard, by 1974 the Saudi government, which that year assumed a 60 percent stake in Aramco, had affirmed a policy of bringing newly discovered fields into production at an accelerated rate. Quoting from the report:

“[I]t was felt that plans should be revised to include the development of the greatest number of oil-bearing strata in the various fields. At the same time reservoirs which had not yet been produced, and reservoirs which had recently been discovered, were to be developed within a specific timetable. In this connection, the interval between the discovery of oil in commercial quantities in an oil-bearing stratum and the commencement of producing it was not to exceed a period of 24 to 30 months, except in exceptional cases.

“It was felt necessary to begin the preparation of such programs … to insure the integrity and optimum exploitation of all reservoirs….

“On at least three occasions during 1975, 1976 and 1977, the Saudi Arabian Government’s objective to have as many fields developed as possible was reemphasized. Accordingly, Aramco was to take into consideration that production be reduced, if there was a need, from highly developed and old fields (Abqaiq, Ain Dar, Shedgum, ‘Uthmaniyah, Berri) and that the company continue and expand its plans for producing oil from remote fields and unused reservoirs.” (pp, 29-30)

So that was the plan. The outcome? If my accounting above is correct, only four fields were developed contemporaneously with these policy decisions: three small satellites of the Khurais field, and the light field Harmaliyah, off the eastern flank of Ghawar, all discovered in 1971-73. And subsequently, post-nationalization, the development of one cluster of small fields south of Riyadh (the Hawtah Trend), discovered beginning in 1989, the combined production from which may have already peaked, according to Simmons, at about 200,000 bpd, and one remote supergiant, Shaybah, in the Empty Quarter, amid enormous sand dunes, discovered in 1968 though not brought on line until 1998-99. (Significantly at least 19 additional appraisal wells were drilled in Shaybah "in the mid-1970s," according to information reportedly contained in the IHS database, but it was evidently decided not to develop Shaybah at that time. See message 49211 at InvestorVillage CWEI, 3/15/2007) That’s it.

About the four 1971-73 discoveries that have actually been produced, little information seems to be available. One can see why Harmaliyah would have been a good candidate for development, since it contains extra-light oil from the same geologic strata as the prolific areas of Ghawar, its near neighbor. (See the Senate report) But it seems to have been unable to sustain the rates of production that reservoir engineers must have planned for. At least such an inference is suggested by the fact that it reportedly peaked so soon after its first production – in 1974, which may actually have been its first full year of production – at about 124,000 b/d according to Twilight, citing Oil and Gas Journal reports. Reportedly “mothballed in the early 1980s,” says the source reporting on the IHS database (CWEI message 55981), “Harmaliyah was back on line after Gulf War I and producing 24,000 [barrels a day] in 2004 according to IEA.” As for the Khurais satellites, it’s not clear whether the production figures given for “Khurais” – for which the data end in 1981 or 1982 – include these fields. Either way, the conclusion is that they have not been notably spectacular. Only two of the three satellite fields are named as being part of Aramco’s current plans for the redevelopment of the Khurais complex.

So if these fields were the entire result of the frequently reiterated mid-1970s development policies, the result is rather telling.

So my question is, does anyone have any information indicating whether any of the other fields on Khebab's list, for a some of which no start-up date is given, have ever been developed, or are currently in production, namely: Janan, Karan, Barqan, Maharah, El Haba, Rimthan, Lawnah, Dibdibah?

Also I'm not clear about the status of Nuyyayim, in the Hawtah Trend, currently on Aramco's project list for an icrement of 100,000 b/d. Is it one of the already developed Hawtah Trend fields, as some sources seem to say (see e.g. www.slb.com/media/services/resources/mewr/num1/portrait_oils.pdf again), or is it the only genuinely new field among Aramco's current list of projects?