Reserves and Production: A Simple Example (based on Abqaiq in Saudi Arabia)

So far in this series of technical talks, I have tried to explain some of the pieces that have to be put together to get crude oil or natural gas out of the ground. I intend to go on with the series in the coming weeks, but thought that today I would put some of the different thoughts that I have talked about recently together. So I am going to talk a little about reserve calculations and production and will use an example to show how the numbers are derived. And again, let me stress that this is a very simplified example. It is also only somewhat fictionalized, as I shall comment at the end.

Let me start by assuming that I have a layer of rock that is 300 ft thick, five miles wide and thirty miles long.

Let us then assume that this has been folded in the middle, so that it now has trapped oil within all the pores of the rock. And, for the sake of discussion let's assume that it has a porosity of 20%. Now having found this reservoir - which is, let's say some 6,500 ft below the current surface of the ground - back some years ago, the oil moguls of the time decided to drill into it and extract the oil.

So first let's do a bit of arithmetic - 300 x 5 x 5280 x 30 x 5280 = 1,254,528,000,000 cu.ft. At 20% porosity, this means that some 250,905,600,000 cu. ft. are not rock, and in this case are going to be full of oil. This is equivalent to 1,876,773,888,000 gallons or 44,685,092,571 barrels of oil. This is, roughly 45 billion barrels of oil. That's how much is there. (We're neglecting, for now any water that is also in the rock).

This is a relatively light oil and flows through the cracks in the rock quite easily, and there are a lot of these fractures, and it doesn't stick to the rock that tightly, so the assumption is made that production can get out some 50% of the original oil in place. So, at this point we can say that the ultimate resource recovery (URR) is going to be 22.5 billion barrels if they can get it all.

Now, this being some time ago, the first thing that our friends did was to drill some oil wells, and this being that long ago they drilled vertical wells one quarter of a mile apart. To make life easier I am now going to consider just a one-quarter-mile section of the reservoir, taken along the length. We assume that the wells are spaced quarter of a mile apart, and that they gave us this one slice. If the slice is 5 miles long, then it has 20 wells set along the section, so that each well will pull the oil out of a box that extends out one eighth of a mile laterally from the well, out toward the next. The total recoverable oil for each well is roughly 10 million barrels, or 30,000 barrels per foot of the oil well in the reservoir.

Showing location of wells quarter-mile apart and in a quarter-mile thick slice along the reservoir. The rock thickness is exaggerated and this is not to scale.

The rate at which the oil flows into the well is related to the difference in pressure between the oil in the rock, and the fluid in the well; the frictional resistance of the rock to the oil flow through it; and the length of the well that is exposed to the rock. Let us assume that the rock resistance remains the same and that production varies directly with changes in the pressure difference and the length of the exposure. And let us start by assuming that the well produces 3,000 barrels of oil a day. (i.e. 10 barrels per foot of well exposed to the rock). Then, in the course of a year the well will produce one million barrels of oil. Connect up the pipes, and away we go.

After five years we notice that the volume coming out of the well is not as much as it used to be, and when we check with the engineer he explains that, as we take the oil out of the ground, so the pressure in the oil reduces, and the flow slows down. Well, bless my bananas, and here we have just promised a new palace to one of the grandkids. So we have a chat with the lads and they tell us of this neat trick they have in Russia. If we pump water into the ground under the oil well, then the water will fill the holes left as the oil leaves, and we can keep the pressure in the oil up, and the oil flow will not drop as fast. So out we go to the site, and we drill secondary wells around the first set that had been put in, and now we pump water back into the ground around the well, and bring the pressure back up to the pressure that we started with. And from then on we are pumping water into the ground as fast, (and soon to tell faster) than we are taking the oil out.

Initial pattern of water flood, adjacent wells flood under the producing central well

Because now there is a little problem that we hadn't thought of when we started this exercise. Over the years we have taken out say 4 million barrels, now as we compress the oil back to the original pressure (we're neglecting the gas issue for now) it will only occupy 60% of the original space, or the top 180 ft of the reservoir. Now at the same pressure we will only get 60% of our original flow, because the length of the well exposed to the rock has been reduced (and flow is related to length and pressure). And this is going to get worse, each year the flow will decline as the length of exposed well in the rock gets smaller.

For example, the next year it will produce at 1,800 bd, (10 barrels/day/ft) but at the end of that year we will have removed (simplifying) 650,000 bd of oil, and so the volume of oil will be reduced by (roughly) 11% of the 6 million barrels we started with, and so the following year the production will come from only 160 ft of the reservoir, and, at the same reservoir pressure, the flow will be reduced because of the shorter exposed length. And the flow will be, accordingly also reduced by 11%, assuming that the overall area remains the same. (Some folks might call this depletion, it is the decline in production with time.)

Yikes, and here that palace isn't finished yet. So what can we do. Well it turns out that there is another trick we can pull out of the hat. Apparently some folk in Italy have found a way to turn a drill so that it drills horizontally across the reservoir, rather than vertically down through it. At the same time someone else has come up with this idea, that if you just pump the water in around the edges of the reservoir then it makes a more even lift of the water:oil surface up the well, and there isn't as much chance of water stopping the well from producing while there is still oil available. Bingo, we'll have a couple of those.

We only need two because we can now drill the wells horizontally all the way from the middle to near the edge of the reservoir (one in each direction). So the holes are each two-and-a-quarter miles long and are equal in exposed length to the reservoir of forty of the original wells. Now the length stays the same, but the production drops to 1.5 barrels/ft/day. But, by pumping water into the surrounding wells, we keep the pressure up and hold that production. So now, out of these horizontal wells we get say 18,000 barrels of oil a day. And it keeps pumping. Call the grandkids and have them build an extension on the palace.

Water flood under horizontal wells, in this ideal case the water is fed from the outside of the reservoir and rises as a steady horizontal lift over time--until it reaches the wells.

But wait. When we started doing this, we had taken out of the ground about half of the recoverable oil. We had, in that slice of the reservoir some 200 million barrels of oil. We had produced half of it, and thus had 100 million barrels left. We are now producing it at the rate of 13 million barrels a year (2 wells). But it just keeps pumping, as long as we keep pumping that water in, until . . . . . .the day the water level reaches the horizontal well layer. And we're done, it's all over. Oh, there will be some indications before it happens, water cut will start to rise again, and production drops and this is really an idealized case and production will likely drop before then due to preferential water flow through the ground. But in either case, even if we get all that was there, and we won't, we didn't create any more oil by drilling horizontally, we just got it out faster.

As the technology improved, over the life of the field, it was found that oil also occurred in an additional mile of rock to either side of the zone that had been initially expected to hold it. It also turned out that the field extended about 7 miles longer than originally anticipated. However, with the new additions and as the field finally began to play out it turned out that the average thickness of the carbonate grainstone was only 240 ft. If you do the same calculation as before you will find that this changes the initial estimate of the original oil in place to be some 62 billion barrels. This change in reserves as the field is developed is not uncommon in oil fields and is one of the ways in which reserves grow, often quite significantly after the field has started to be developed.

And at this point those of you that have read “Twilight in the Desert”, or have worked in the oil patch may note that what I have used for my numbers bears a reasonable similarity to the oilfield known as Abqaiq in Saudi Arabia.

Google Earth image showing Abqaiq relative to the Saudi coastline (the blue dot where the roads meet)

(Although all the exemplary numbers other than the geometric size of the field, and its porosity and depth were made up by me as I went along to illustrate the developments of the technology that have been applied to that field.) The oil has a 36 deg API, with a gas/oil ratio of 860 cf/barrel. (It is also sour). The rock permeability is 400 millidarcies in the Arab D formation (this info is from "Twilight"). We can get some other information on this field from a number of other places. So, as a contrast between the myth and the reality you might want to read on.

The first well at Abqaiq was spudded in August 1940. It began production at 9,720 bd in October 1940, but had to be temporarily shut-in the following February because of the adjacent war. Early development was slow, but began to pick up as the conflict moved further away.

If the expansion of 1936 had struck some of them as a period of hectic confusion, this 1944 expansion struck them as bedlam. Their goal by the end of 1945, they were told from San Francisco, was 550,000 barrels a day, nearly 25 times what they were turning out now in their standby operation, and much more than the capacity of their existing wells. There would have to be a massive drilling program involving perhaps 20 strings of tools, and drilling that many oil wells meant developing adequate water supplies both at Abqaiq and at Qatif, where they had been instructed to put down a wildcat. . . . . . . . By June 13th, too, Phil McConnell had entirely shut down the Abqaiq field after completing No. 5, and had diverted his entire Drilling Department to Ras Tanura.

By 1962 only 72 wells had been drilled in the field. At the same time the gas was being extracted with the oil, and 50% of it was being used. Most of it was pumped back underground to maintain pressure and in some cases it was mixed with LPG (Liquefied petroleum gas) and this helped dilute and increase the flow of oil from the reservoir. (But sometimes it did not work). It was used in the Ain Dar part of the Ghawar field and right next door to Abqaiq. But in 1982 the gas was collected for sale abroad.

By 1972 Aramco was drilling a well at the rate of 1 every 2.1 days. Shortly thereafter Abqaiq peaked, at 1,094,062 bd. In the area of Abqaiq there were 4 drilling rigs and 5 workover drigs in the period around 1977, as the field fell back to a production of less than 800,000 bd. By 1981 production was down to 652,000 bd. In the mid-80's it was partially shut-in, and flow was reduced to 200,000 bd as demand declined.

And while the rest of Saudi production continued to grow, in 1988 it had 550 wells in production by 1990 Abqaig had only 47 flowing wells, and by 2002 had dropped to 500,000 bd. It is currently 73% depleted, according to Aramco in 2004 and 74% according to the EIA.

Now beyond this point there are some conflicting numbers. Let me just list some of the information that is out there.

In the 50 years since discovery it yielded 7.5 billion barrels of oil.

Abqaiq production history from Saleri via Joules Burn

The EIA considers that Abqaiq has 17 billion barrels of proven reserves. This is in contrast with the recent "World Energy Outlook 2005," which projected (through 2004) that Abqaiq had 5.5 billion barrels remaining and had produced some 13 billion. (But it got the start date wrong as well.) It uses IHS data for its projections.

From that data, quoted by Jean Laherrere, one can estimate the total oil contained in the field. Using their anticipated total of 19 billion barrels, and that this is considered to have a recovery factor of 60% indicates that the overall oil in place is about 31 billion barrels. This is about half of the theoretical prediction I had made, using total volume and porosity, but given the variations in geology over the region, that the field has about 50% of the oil that the general assumption predicted is not bad.

However using the Aramco statement that the field is 73% depleted implies that the total oil that can be recovered from the field is around 11 - 12 billion barrels, which is in line with the HL projection created by Laherrere.

Abqaiq production projection by Jean Laherrere

The field is variously currently reported as producing between 250,000 bd and 434,000 bd. The IEA consider the latter figure - which yields 158 million barrels a year, sustainable through 2010. (At 8% depletion, although Aramco are claiming that they are holding depletion below that - by continuing in-field drilling). However if the OIP is 31 billion and they are only able to recover 11.5 billion, then this gives a recovery factor of some 37%, which is a fair bit less than is derived by other approaches.

And, it was from this field that Dogru, Hamound and Barlow generated this image:

Joules Burn has provided a much more detailed discussion of Abqaiq in a post from May 2008 (and also repeated today above this post).

This has been a bit longer than these usually are, but has still had to make a lot of simplifying assumptions to fit, so again I ask those who know more to either bear with me, or to post comments.

Many thanks for all the informative writings you have done.

Can't we just create some models which will tell us that energy will never be a problem.

High regards.

ERR -- Every model I've ever worled with can do just that. All you have to do is input the right assumptions needed to reach your redetermined answer. Many folks today follow that very process to some degree.

there seems to be a large range of estimates of ooip for abqaiq. does anyone have an authoritative estimate from aaramco before nationalization? i believe the pre-nationalization number for ghawar has proven reasonable.

jmo, i think i see a bias toward claiming a low recovery for abqaiq and by extention ghawar. the ca 30 to 37 % recovery for ghawar has, probably already been debunked by cummulative production.

one might ask what does a worldwide average recovery from carbonate reservoirs have to do with abqaiq or ghawar ?

ghawar has almost certainly exceeded the 30 %, and possibly the 37%, estimate and is still at least capable of producing somewhere in the vicinity of 5 million bpd.

In a reservoir there is usually water at the bottom, oil above this, and a gas cap on the top. The multi-colored cross section does not show the original oil-water contact thus one cannot get a timelapsed image of what happened there. The blue, green, yellow, and red image is only a 2-D representation or thin slice of the elongated reservoir. One would need more cross sections to try to determine what is in the reservoir.

Simmons stated the Saudis were secretive about their production data. A few production flow data dates have been cited in the article above, but this is not a continuous data set.

It would be hard to find someone to argue the fact that Abqaiq was one of Saudi Arabia's largest oil field discoveries. A Saudi official (2002) estimated this field had produced 70 percent of its reserves. He was probably describing the Arab-D reservoir. There is another reservoir deeper in the formation that contains less oil.

Saudi Arabia has many fields that are smaller than the supergiants that make up most of its current production.

I meant it would be hard to find someone to argue against the fact that Abqaiq was one of Saudi's largest oilfields. In terms of current remaining reserves one is not sure where it ranks.

Thanks Heading Out, this series is great!

Here is a great time series of what is believed to be the northern tip of the super giant Ghawar oil field watering out:

This was taken from Stuart Staniford's post Water In the Gas Tank

For those new to The Oil Drum, I recommend Stuart's later piece Depletion Levels in Ghawar if you want to read more about oil water contact levels and gas caps and what this means for industrial civilization.

I see the original water oil contact near the blue-green line of 1940 does not seem to change over time until 2004, but the green area moves up. The red where there is mainly oil and no water is near the top in 2004. The green is supposed to be above 50% water cut. What will happen when the red layer is gone, if it is not already gone?

The faster production and then quick drop off from horizontal wells is scary. Any thoughts on what percentage of our production today is from horizontal wells? It seems like a lot of recent wells are horizontal, but there are still a lot of vertical wells in place as well.

Found this..

“This initial growth of horizontal drilling has been quite rapid and now represents about 10 to 15% of all drilling activity. The future growth of horizontal wells depends on how the industry handles the next rounds of technological advancement,” Schuh says.

Thats in 1999. If you like to play with dates then the productivity of horizontal wells and the date of their introduction is interesting.

Assume 10% in 1990 and a 10 times increase in short term productivity and get a neat result.

Also don't dismiss advances in completion technology for vertical wells advances in re completion and better completions probably played as big a role as horizontals in increasing the productive rate per well. Of course I put these advances as belonging to primarily to a a bigger straw effect although its even harder to quantify.

And of course better seismic so smarter drilling. I know I tend to focus on horizontals but there are other issues that have a significant impact on our oil production rates.

Another nice paper highlighting fracing.

A good frac job effectively turns a simple vertical well into a pretty good to even fantastic horizontal if you include the fracture connectivity.

Fracing horizontal well maybe super straw is in correct probably ultra straw :)

Whats interesting is if you try and include fracing which is intrinsically a fractal in as expanding the pay region exposed i.e include it in the well exposure my long post below becomes down right scary.

If I'm made the correct assessment of the situation there is little room for doubt about the future of oil production its going down hard.

One of the big stories that speak to improvements in Saudi Arabia has to do with drilling technology and completion technology. I'm surprised it hasn't been talked about much here but from about 2004 onwards the advances which included maximum reservoir contact wells, SMART completions, attention to quick water shutoff, gas reinjection etc. really have made the difference in terms of ultimate recovery likely to be seen from Abqaia as well as parts of Ghawar (i.e. Haradh III). I try to stay up with the advances and results which seem to get regularily reported in SPE publications. The Saudis claim that this is why they have been able to keep water cut fairly constant. The MRC wells drove contact area from a few hundred metres in a given well up to 5 km of contact which makes a big difference in rates and hence water production. That was all coupled with 4D seismic which allows Aramco to image the advancing water front and identify problematic areas of high permeability. Without doubt Aramco is at the forefront of field management, out of necessity obviously. And they don't seem poised to suddenly stop as now they are talking about ERC wells or extreme reservoir contact wells.

The topic of well drilling tech. has been brought up in the past. The consensus seems to have been that the MRC well systems get the oil out of the ground faster, but does not increase the URR beyond drilling hundreds of vertical wells. The technology that boosted production at Cantarell was likened to stepping on a tube of toothpaste and gettting it out of the tube quickly, but one did not get any more oil out of the structure than if one had drawn it out slowly. Water shut off valves in MRC laterals improves short term oil recovery without building extra water handling facilities, but in the long run may not improve total oil recovered. The seismic imagery may find pockets of bypassed oil. This is true. The East Texas field was like a pincushion with all its wells. Am not sure if they will find bypassed oil there. There were wells in peoples backyards of less than a quarter acre. They drilled more wells to try to get the oil out before the neighbors did. With several wells per acre what could they have bypassed? Aramco can drill more wells to get more oil until it is gone. It is like draining a pool with a 3/4 inch hose compared to draining it with a 3" pipeline. The same amount of water was in the pool to begin with.

It certainly worked well for Shell at the Yibal Field--until the water hit the horizontal wells.

Gail --At least this is one factor you don't have to worry about with respect to U.S. production. Horizontal and Deep Water flow rates get big headlines. But remember the average production of the wells of the third largest oil producwer on the planet is less then 10 bopd. If every hz well went off production tomorrow I'm not sure we would notice the blip on the chart. Instant loss of all DW might produce a noticable blip but that can't happen. But unless the current batch of DW fields is replaced quickly we might see a noticable step wise change over a 3 to 5 year period...maybe.

We have a two component oil production profile: the old fields with a very low decline rate and the new DW fields with their relatively high decline rates. Even more apparent in NG: the shale gas plays produced new record rates. But in a year or two at most their decline will put us back on our steady but still declining base NG production.

I'll bite on the reserve addition quote.

As the technology improved, over the life of the field, it was found that oil also occurred in an additional mile of rock to either side of the zone that had been initially expected to hold it. It also turned out that the field extended about 7 miles longer than originally anticipated. However, with the new additions and as the field finally began to play out it turned out that the average thickness of the carbonate grainstone was only 240 ft. If you do the same calculation as before you will find that this changes the initial estimate of the original oil in place to be some 62 billion barrels. This change in reserves as the field is developed is not uncommon in oil fields and is one of the ways in which reserves grow, often quite significantly after the field has started to be developed.

Mainly because this exapansion is often used as a textbook case to justify reserve additions. However is it ?

To quote your own quote.

If the expansion of 1936 had struck some of them as a period of hectic confusion, this 1944 expansion struck them as bedlam. Their goal by the end of 1945, they were told from San Francisco, was 550,000 barrels a day, nearly 25 times what they were turning out now in their standby operation, and much more than the capacity of their existing wells. There would have to be a massive drilling program involving perhaps 20 strings of tools, and drilling that many oil wells meant developing adequate water supplies both at Abqaiq and at Qatif, where they had been instructed to put down a wildcat. . . . . . . . By June 13th, too, Phil McConnell had entirely shut down the Abqaiq field after completing No. 5, and had diverted his entire Drilling Department to Ras Tanura.

Does it really make sense to use a field developed in the midst of WWII as a textbook case of how poorly the engineers at the time understood the fields ?
If anything given the situation they actually did a great job. How many other fields that eventually showed significant and real reserve additions have a history that suggests the original development was rushed for above ground reasons ?

For this particular field it would be better to suggest that it was rapidly developed during WWII by a relatively small team and that a number of mistakes where made in and effort to get the oil flowing first and foremost.

Was the effort legendary yes did it follow standard industry practice at the time ?
Probably not.

If you had to pick one field that should be treated as unique Abqaiq and of course Ghawar would in my opinion be at the top of the list followed by Canterell.

Regardless the eventual reserve addition to Abqaiq given its history is not all that surprising and probably not useful as a model case for reserve additions. In fact given its history it may stand alone as having the largest real reserve addition ever made. That decision will be lest to historians in a few decades.

One of my biggest problems is reserve additions are unique events with a variety of underlying causes a fairly common one is finding new trapping regions under the primary reservoir for example. Stacked reservoirs are actually quite common and the secondary ones tend to be discovered after the primary reservoir is developed. These are real new discoveries but treated as reserve additions. But here your getting into the complexity of real reservoirs what is a reservoir is it continuous is a geological trapping region even if complex with multiple trap zones ? What about multiple oil pools but hydrologically connected ?

This series has highlighted the role pressure connectivity plays in the production of a reservoir although the the huge connected pools of Ghawar and Abquiq are great for bragging rights smaller pools that are isolated have advantages. The nature and reasons for reserve additions are in my opinion important esp if the represent not connected regions and can be treated as new fields. But we also tend to deplete smaller fields faster so ....

And of course this is not even considering porosity viscosity water etc etc etc.

A true picture of our oil reserves requires a understanding of all the factors that effect production and there are several major measurements needed to even define reserves.

A single barrel number and the underlying assumption of a recovery factor is simply not enough information to validate reserve claims. Its a simple number useful as a rough measure to interact with Wall Street and get money but beyond that I simply don't see it has any technical merit as a fundamental variable useful in understanding the status of our oil reserves beyond the roughest guess. And it becomes a increasingly poor metric as fields age. Obviously I argue that by the time we reach the point we are at now where extraction has been in progress for almost 100 years remaining reserve estimates become effectively useless as a predictive tool for future production rates.

With this series the basic variables have been well presented hopefully its obvious that the whatever the truth is it probably can't be firmly established without copious transparent information from each oil field. All of the variables that effect oil production need to be known and the trends analyzed. Critical ones are simply missing from the public literature. A very simple one the trend in final URR for infield drilling is for example difficult to find. If your field rework is resulting and ever falling per well URR then obviously your fighting a losing battle.

If I had to pick a single measurement to represent the real situation with our reserves I'd choose barrels produced per foot of paying/oil reservoir contact. I'd argue its the single best measure or way to consolidate all the variables effecting oil production.
And of course the related totals i.e all wells drilled and the time series for contact.
Changes in the overall population of active wells is also important and would be available if you made the measurement.

The reason I'm alarmed is its my opinion without proof that this measurement as been falling rapidly.

I really like your writings and I can see your point.

Would present day flowrate's from wells and fields, along with a set of data from the last 5 or 10 years be sufficient to calculate what we can expect.
And do you think that the amount of oil from new developments is less than the amount we loose from depletion.
Can we plot the amount of oil coming from new developments against the background of the old depleting ones.

When will the new developments peak?

Do you see a remote change for several Ghawars (oilflow wise)
coming online in time?

Does the amount of reserves have a big impact on the above?

Knowing where we stand would make things easier. But would it change what we already know?

Hmm depressing stuff oil and gas flows. In the old days the excitements must have been great. Nowadays everything is automated and the operators are busy protecting their interests.
Just as their bosses and their bosses and ...

My apologies for this negativety

But one of the bigger problems I see is following the downslope of peak ... without really changing the way we use energy.

Well first and foremost as far as I can tell there is certainly a theoretical long tail to oil production. For some of the factors you describe and more. Stripper wells if you have enough can produce significant quantities of oil slowly washing rocks. Overall we do have plenty of technologies capable of extracting a good bit of the remaining oil.

However in general the production rate is much lower then it is today and plays a role in why its a long tail as the depletion rate is itself low. New fields play a role but exactly how big is tough to decide. Discovery is obviously well in the past this does not mean of course we won't find some big fields but depending on the numbers you want to use we extract the equivalent of a single Ghawar every few years. I don't see future discoveries as being important for supporting a high production rate in general they will simply help lift the annual production rate as the come online. So technically we face a long gently downward sloping undulating plateau. Its exact nature really depends on investment.

What matters is where exactly this long potential tail exists vs current production levels. Do we simply come of of peak and enter this long tail of post peak extraction or is there a discontinuity possible as the nature of our oil reserves becomes dominated by tertiary extraction methods ?

One big problem is the tail itself is large if you try and take its area its difficult to determine and we don't really know how to partition our remaining reserves how much will really be extracted in this tail region. Assuming 1 trillion barrels for this region is as good a guess as any. However approaches that include it tend to swamp the critical period of a fairly small amount of oil extracted immediately post peak with information that should be relegated to the tail.

Now between our peak production rate and the rate we will produce the long tail at lies a potential problematic area.

I'll not go into details but any review of tertiary extraction suggests that the production rates will be much lower than they are today. As usual I simply guess what they might be and guessing a number of different ways indicates that long term post peak oil production would probably be around 15-30 mbd maybe as high is 40mbd initially.

So the bulk of whatever oil we have left would be extracted within that range for decades probably longer than we have been producing so far assuming of course we continue to produce oil as fast as we can.

So how do you connect this long tail back to the peak ?

Well this obviously depends on what I call the amount of fast oil we have left and how fast we are depleting it. The long tail can be safely disregarded if the assumption is correct that its production rate is significantly less than todays. If its produced at all it will be in a radically different socio-economic environment from what exists today.
It would not be a stretch to say its production is up to a simply different civilization from what we have now as the economy and oils place in the economy at those production levels is just to different from the way things work now.

Its not "our" oil.

Regardless one can focus on this fast oil and ponder if its going to be a smooth slow decades roll over or a fast drop. Obviously I tilt the game a bit because I call it fast oil its oil we not only produce at a high production rate but also a rapid depletion rate.

Depending on how you measure it about half of the worlds oil production falls in this category its small new fields depleted in less than ten years various off shore fields advanced extraction of older fields of all types typically with horizontal wells. The hallmark of this fast oil is depletion rates hovering around 10% so basically about every ten years or so all the wells in this category have been in production for less than ten years. And I use wells not fields because its really all about wells. Also re-completions and other major rework of existing wells should be counted as a "new" well.

If this pool of fast oil is small i.e a few 100 GB my best guess was about 300GB then when its gone its gone. Drilling more does no good and production begins to plummet as large numbers of fields become candidates for expensive low production rate advanced extraction methods.

Its pure guesswork I like to at least believe its educated guessing and I've done a good job of hitting the numbers. The important factor is of course the real depletion rates.
This is itself related directly to per well productivity. And as far as I can tell if the concept is correct then the transition from peak production to the tail is abrupt i.e its a shark fin as our last set of high depletion rate wells pull the last bit of easy to deplete oil out of the ground. High prices will of course encourage aggressive drilling near the end but this simply sharpens the eventual fall.

With this model although you can really know the exact depletion rate once oil production seems to hit a wall or plateau depending on your assumptions of the real depletion rate oil production falls dramatically shortly thereafter. I'm comfortable assuming that we are depleting the fast oil or more correctly where depleting it at about a 10% depletion rate when we hit the wall. So we had about ten years or less before production began to fall off a cliff. Obviously its not a right angle cliff so at some point during the last few years of depletion of fast oil production decline rates would accelerate rapidly and the cliff has a bit of a curved lip if you will but the radius is measured in years at most.

Now of course this is guesswork on top of guesswork so YMMV :)

But it does not really matter if you think its true and you think we turned the curve then its not really relevant how well you "predicted" the turn.

Given that I assert without a shred of proof outside of sulfur that we are now on the downside trend i.e we have turned the curve I did not do a bad job if you read my old postings.

And of course if this is true then no real reason to have raging arguments on the oil drum as within six months or so the situation rapidly becomes critical aka TSHTF.

About the only real reason I continue to post is given the nature of the event waiting to claim to be correct afterwards may are may not be possible :(

Its akin to correctly predicting the onset of thermonuclear war when you live somewhere thats a first strike candidate. You may or may not be able to crow about how you nailed it.

With all that said as best I can tell all that happens at first is the massive amounts of debt we have in our current economy system is forced out. The waste is immense housing is still insanely overpriced esp given and end to the baby boomer growth period. Commerical real estate is way overbuilt we throw way way to much stuff away etc etc.

There is a tremendous amount of fat in the world economy and rapidly falling oil production will at first in my opinion simply be painful and invasive liposuction. Literally ripping the fat out. Painful and disfiguring but not deadly.

The deadly blow probably has nothing to do with oil as far as I can tell but falling sulfur production which is a by product of our oil industry resulting in the crippling of our overall industrial capacity along with the effects of sky high oil prices. As sulfur production falls you get a large secondary problem as virtually everything we make or do is impacted. Not only do we no longer need to make all the junk we do today we literally can't because of the lack of sulfur and petrochemical feedstocks. This of course runs right smack into the fact that society waited way to long to get off of oil regardless of the decline rate and I'm predicting a worst case scenario.

Best guess is we could effectively lose 50% of our industrial capacity if not more and this is not even considering social issues.

In any case if correct at that point our current civilization is simply no longer viable and a new civilization must be created. My best guess is probably 2014-2015 for the real collapse. We have a lot of fat in our economy and it will take time to rip it out. Its just once thats over I think we will find we have effectively nothing left to keep even this new leaner economic system going. We would have at that point effectively half the resources we have at our disposal right now if that. Imagine our entire world running off of the resource usage of the US alone to get a sort of ballpark estimate including social upheaval. The shear number of people in the world finally swamps the entire system.

Certainly a new civilization is possible but not until after the population level falls well below what we need it to be to create a new civilization with the remaining resources. Even a new robust renewable society is a growth proposition at first as the infrastructure is rebuilt along saner lines. It simply not going to be able to support anything close to its final population capacity for some time and if its viable population control will be a intrinsic feature of the society. If I had to guess I'd assume this society would by choice keep population well below what even a sustainable society would permit. Since they have to control population I can't see them even trying to allow it to grow to reach even renewable restrictions. I could well be wrong but I suspect if I am then that simply means several cycles before we finally limit human population to leave a light footprint on the earth.

I'd guess the only real consolation about being alive now is that on average after all this is over it really can't get any worse barring a exogenous event like a meteor strike this is probably the worst of times to be alive. But on the other hand our future will be made over the coming years and not just a future for civilization but a future for humanity itself once we really grow up humanity will be fundamentally changed by the events that are starting to unfold so in a sense its the best of times. No other group will probably live through such a momentous change. We will be forced to use our intelligence to fundamentally change ourselves how we do it is the interesting part despite the obvious horror of the process.

We shall see personally I hope we have a nice slow transition and I'm completely full of crap given enough time I think we could make the changes we need to make. Certainly we will not do it untiled pressured but a constant strong pressure is sufficient we don't need to be smashed. Small wonder that we actually do everything we can to convince ourselves that it will be a strong pressure of some sort not a smashing. We are barely ready to face the fact we need to change much less that it might be a smashing change.
But thats probably from the underlying group psychosis we have which is a symptom of the mental disease we need to cure not fact. I find it amusing how few people will even consider the credible threat of a fast change as possible it tends to be rejected out of hand without even the slightest attempt to consider the possibility.

Back to the meteor I suspect if astronomers informed our population that a huge meteor was on collision course with the planet and we could do nothing the stop it the majority and probably close to at least 70% of the worlds population would discount the fact right to the point they are vaporized. As a group for some reason we are simply incapable of really dealing with true problems. Not that I have anything more than guess work supporting my case regardless it seems people can't deal with it at a basic level. I'd argue the guesswork is good enough to at least start finding the facts to prove or disprove the situation. Simmons of course realized very early that without data transparency we would never ever figure out whats fact fiction or good sleuthing.
I don't care if people think I'm crying wolf and full of crap it does not matter the consequences if I'm right are simply too dire to ignore. We need to know the truth right now we are frittering away a rare autumn summer of relatively cheap oil and functional industrial base trying to keep suburban housing prices from falling and the bankers collecting their bonuses.

Thanks for your insights,

I'm glad I can see this differently.
In my view at the bigger picture it's just simple steps that got us here. We avoided every problem by making adjustments and that's all we have done since the beginning.
But our advancements in our thinking and doing can't be reversed.
Thinking outside excessive energy and money will take some time, but we have no choice. We have always adapted to new circumstances.
All the numbers in the world can give you some impressions, but it isn't the real world. The last 30 years have been delussional at best with tv and other screens telling us the biggest halftruths.
The world will change and we can sit front row. But I firmly believe that our overlords stepped on the economic break. So they are aware. Whit our screens we can change thinking in a view months and stopping all unnecessaries shouldn't take much longer.

Pointing out all problems we will face, is very usefull, because that's our headstart. Hardship will come but some small adjustments can make a big differance.

Please keep in mind that with bad data everything can look distorted, fudging numbers seems to be some kind of international sport.
Maybe things are worse than I'm thinking but that doesn't change the fact that I will always try to make my local things going again. When things get rough everything in my power goes to my small piece of earth I call home. And that's the reason we have made it this far.

Tod is the place where some critical thinking really took off, all kinds of people have contributed to broaden our thinking in general. This will continue...for some time.

Loosing the biggest achievement (global communication) we have made on purpuse... I sure hope we are smarter than that.

Time will tell.

Hello Memmel,

Thxs for this post, especially the section on how strategic sulfur depletion will be to reducing postPeak industrial capability, as I believe it helps throw more support to my earlier, extensive sulfur posting series, "She comes down from Yellow Mountain..":

"Joy, beautiful spark of the gods,
Daughter of Elysium,
Touched with fire, to the portal,
Of thy radiant shrine, we come.
Your sweet magic frees all others,
Held in Custom's rigid rings.
All men on earth become brothers,
In the haven of your wings."--Schiller
How much blood will be spilled for Asimov's Elemental List [P is #1, S is #2] until we learn of it's criticality?

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

I find it amusing how few people will even consider the credible threat of a fast change as possible it tends to be rejected out of hand without even the slightest attempt to consider the possibility

being amused is an interesting reaction, 'and the fool on the hill' lyrics come to mind. Since so few are in any position to make any sort meaningful preparation the general denial of the fast change possibility shouldn't be surprising.

With the matrix of outcomes such change could/would/will produce, even those who think they are preparing for such may well be deluding themselves.

But if I read you right, your point really is that fast change must be considered as a real and imminent possibility, thus bringing real pressure for significant systemic change now. I couldn't agree more. The likelihood the number of those sharing that point of view achieves the critical mass needed to change course in time...with all the cowboys 'singing' to keep the herd calm and all... well I guess I should chuckle about that too

I attended a lecture by Charles Hall at the U. of Penn last year. He pointed out that much of our economy is based upon discretionary spending and that gradually this discretionary spending will have to "go away" to allow available funds to be used for necessities. I think this is also your point regarding the "disfiguring liposuction". Granted, I can easily adjust to a life without lattes, but what happens to the person who's job it has been to make the lattes at Starbucks? How long can the rest of us support unemployment for these folks after multiple recessions followed by multiple "jobless recoveries"? Do these people go and become wood choppers so the rest of us have wood to burn in our wood stoves?

I think the $64,000 question is how does a civilization adjust to the death of what it is based upon, i.e. discretionary spending? Can it? Or is the social disruption so traumatic that we're looking at social chaos for an indeterminate period into the future?

It makes my head hurt thinking about it. I'd rather just contemplate the dismemberment of the LA Dodgers by the Philadelphia Phillies.

Dear Mr. Heading Out. This should actually be an appendix to Twilight in the Dessert by Simmons. How I love these posts. Thanks. Technical question pertaining to porosity, permeability and pressure. How are they related in the structure?... if they are related at all?. And do these change or vary widely throughout the structure.... like going from 10 to 90% in a short distance. (I am referring to porosity here). Or a large change in millidarcies??? And what about these rock pressures? Is one part of the structure being lifted or pushed in some way that is measurable? Maybe I am not asking the question correctly??? Try this..... Is the oil bearing rock consistant?

TG80 sends regards

Thanks for the kind words, I will come back with a second post on this later - but I need to lay a little more background on horizontal wells first.

Tg --I'll toss you some short answers while HO is working on the details. The factors you ask about can be lumped into "reservoir characterzation." This is essentially my specialization. With the great techonolgy we have today to measure such parameters in a well bore we can generate great details. We can know exactly what the reservoir character is at that point in space. Drill another well 100' way from that one and we can be completely wrong. A few hundred feet from the existing well bore we might anticipate 30.2% porosity, 325 md permeabilty and an oil saturation of 73.8%. And then we drill that new well and, SOB, the sand isn't even present. So much for calculating to one decimal place. Obviously the farther away you move from your control the greater the risk of error. I'm not kidding: I've drilled two "sure shot -- can't miss" wells in my career. And they both missed. Mother abhors arrogance and loves to punish us geologists when we get too full of ourselves.

I'm not a carbonate expert but I can offer that predicting such parameters in these reservoirs are the most challenging. In many cases we can only reverse engineer to get the answer: use variations in prodcution histories to modify our reservoir characterzation assumptions. Just a bit of a teasing answer. HO will soon load us up with all the tasty little details.

Jean Laherrère sends this comment:

The 2005 graph shown in this post on Abqaiq is obsolete; at the time my data was incomplete. I am surprised that the author did not try to find a more recent graph. 

By googling “laherrere  + Abqaiq” one of the first results is:

1 Jean Laherrere 3 June 2008 Forecasts ...

In this article the first graph is:

With more recent data (but only up to 2006) the ultimate changes from 12 Gb to 15 Gb. I have often said that ultimates for Saudi fields are unreliable because first, the data is incomplete and second, production is subject to quotas which disturbs the decline.

I am amazed to see people using my graphs without bothering to ask me if I have better ones. My old e-mail is well known (used often for spam: a week ago I received more than 70 000 mails "undelivered mail returned to sender" and I took me a long time to be rid of them). I have never refused to reply to any request.

My apologies to Jean for not checking for updated information. The work that he does on evaluating remaining reserves and production is invaluable, and I should have been more diligent in tracking down his more recent work.