Saudi Aramco Loses Count, Drills Too Many Wells In Ghawar

Haradh, part of the Ghawar oil fieldThe Haradh III development at the southern tip of the Ghawar oil field in Saudi Arabia, completed in 2006, has been portrayed by the national oil company Saudi Aramco as the turning point in the battle between geological adversity and engineering prowess. The poorest reservoir rock in Ghawar has succumbed to the latest in well and drilling technology. Aided by 3D Seismic images showing fracture locations, well sites were optimized and drills were guided by remote control from Dhahran. Smart completions were standard (did they ever call them "dumb" completions?), and something called an "iField" was set up. Maximum-reservoir-connectivity wells (MRCs) were fitted with monitoring electronics and valves on individual laterals such that they could be throttled back as needed to minimize water encroachment. Testing was done, adjustments were made as needed, and everything rolled out ahead of schedule. Goals for individual well productivity of 10,000 barrels/day were met, and projections indicated smooth sailing for ten years or more. Lots of glowing articles were published, and the man in charge eventually rode off in glory to solve the rest of the world's oil production problems.

Funny thing, though. When you look at a satellite photo and count the number of producer wells they ended up drilling, it adds up to quite a few more than they have been claiming -- about 60% more.

There must be a reasonable explanation. Perhaps they simply miscounted.

Faux Pas in the Desert

OK, so what's the big deal? After all, what are a few extra wells? But Saudi Aramco has been rather consistent, as well as thorough, about the development details:

The Haradh III project came on stream in February 2006, adding 300,000 B/D of Arabian light crude production capacity to Ghawar, the world’s largest oil field. The project’s main significance, however, derives from the fact that it sets a milestone for smart technologies at a scale and complexity unprecedented for Saudi Aramco and, arguably, for the industry. Haradh III might be regarded as the entry point to a new era in upstream projects and specifically into the domain of real-time reservoir management. The project spanned a period of 21 months. It entailed construction of a grassroots surface-facility network, integrated with a complex subsurface development program. Maximum-reservoir-contact (MRC) wells, smart completions, geosteering, and i-field features provided the four main technology components.

From the table at below left, taken from the above paper, it seems that the new era features a lot more acronyms:

Figure 1. Project specification and well layout for Haradh-III from Saudi Aramco

A key figure is the number of producers (32). Also interesting is that the figures of 300,000 barrel/day flow and 2% depletion of reserves implies 5.475 billion barrels reserves in Haradh III(of course, this oil is not really physically separate from the rest of Haradh oil).

The well placement map (above right) from the same paper shows how these wells were positioned to drain the field, aided by water injection from the periphery. The map also indicates 32 producers and 28 injectors, but with 15 instead of the 12 observation wells (EV/OBS) enumerated in the table.

The above article was written by Nansen Saleri, the former Reservoir Manager for Saudi Aramco. He leveraged the success of this project to kick-start his new career as a reservoir engineering consultant. He later authored another article on Haradh-III, with a title invoking Matt Simmons' book "Twilight in the Desert" (egad!): Dawn in the Desert
Against a backdrop of many international upstream projects straining to achieve their target production levels and intended plateaus, Haradh III reached its planned production capacity of 300,000 barrels per day well ahead of schedule, and the field’s performance more than 18 months since its start-up exceeds virtually all pre-project goals.

Sounds great, and he even provided some production data:

Figure 2. Early production data for Haradh-III from Saudi Aramco

So, how are the wells doing?

Haradh III became the first Saudi Aramco project to be developed exclusively with MRC wells, with down-hole ICVs for flow control. Average well-production rates were targeted to be 10,000 bpd (which was achieved), compared with 3,000 bpd for Haradh I and 6,000 bpd for Haradh II. ... The principal sub-surface challenges and their pre-project risks (premature water breakthrough, loss of oil production, high-decline rates) were for the most part managed. Eighteen months after initial production on January 31, 2006, the field is maintaining its production capacity at 300,000 bpd, at virtually no water production, and with 100 percent active status for all its initial producers.

While we can't double check the flow measurements, we can count wells. I took a look at the Haradh-III development project a couple years back to determine if the field was laid out they claim. Satellite imagery from Google Earth was used to identify and count wells to check against those reported. Unfortunately, most of the southern end of Ghawar was covered by high resolution imagery only as recent as 2004 (i.e. prior to the Haradh III project). Some 2006 low resolution imagery was available, and this plus the fortuitous location of a few wells on the eastern fringe (where there were 2006 hi-res pictures) gave a reasonable indication that the project was as advertised. Another complication is the large number of gas wells present in that region, and gas and oil wells can be distinguished only at high resolution. So a definitive assessment would have to wait.

See Satellite o'er the Desert and selected stories on The Oil Drum for more background on this and subsequent work on visually characterizing the oil fields of Saudi Arabia.

Fast Forward to 2009

Over the last two years, Google had updated the imagery for the rest of Ghawar such that everything was covered by mid-2006 imagery or later. The southern tip, however, was still stuck in 2004. But late in 2009, a handful of restricted locations across Saudi Arabia were updated with imagery only a couple months old, including pictures covering the lower two thirds of the Haradh and the northern half of the Hawiyah operational areas of Ghawar. These pictures were taken with the new GeoEye satellite. This imagery update was greatly appreciated, as 2006 is fading quickly into the ancient past. Also new in Google Earth is a timeline feature which makes available the archived imagery for easy comparison with the current view.

The new imagery shows that the locations for the producer, injector, and observation wells given in the well layout map from Saudi Aramco roughly match those found in the satellite image, as shown below (more your cursor over the image to overlay the well map). The trio of closely-spaced wells towards the southern end of the well diagram correspond to three actual wells spaced about 100 meters apart north to south. One producer is slightly displaced, as are some of the observation wells; but overall, the rendering is fairly accurate -- after one corrects for the "squishing" of the map, something that Saudi Aramco seems to do with many of their maps (perhaps to confuse us).

Figure 3. Haradh-III wells which Saudi Aramco admits to. Mouseover overlays Saudi Aramco well placement diagram. Click reveals additional wells seen in Aug-Sept 2009 imagery.

However, there are many other new (non-gas) wells visible in the satellite images than those claimed. Shown in the figure below (or by clicking on the figure above) are locations of 28 additional wells. Based on their location, four of these are identified as injectors (light blue placemarks). Of those remaining (green placemarks), two are most likely observation wells, leaving 22 possible new producers. Two of the indicated sites do not yet have wells drilled, even though they most likely will, so a very conservative estimate is that 20 more producers have been drilled than reported by Saudi Aramco.

Figure 4. All visible wells which are part of the Haradh-III project (September 2009)

Using a variety of Ghawar well maps, I have determined the numerical identities for many of the wells. These are indicated in the figure below. Five of the observation wells (nos. 3, 27, 28, 41, and 43) were originally vertical wells drilled prior to 1990. Seven additional observation wells (1500-1506) were drilled at the start of the Haradh-III project. Interestingly, two of the "new" wells are actually old vertical well sites, shown as abandoned in 2004 imagery, and now presumably redrilled with horizontal sidetracks. Further confirmation of the identity of these wells as oil producers is the observation that they are connected to the same pipeline network with feeds into the Haradh-III Gas Oil Separation Plant, as shown below with the red traces.

Figure 5. Haradh-III oil pipeline network and identities of several wells

Note that most of the observation wells are also connected to the pipeline network, and wells 3, 27, and 28 are connected to the pipeline network for the Haradh-II GOSP further north.

One detail remaining to be answered is the timing; when, since early 2006, were the additional wells drilled? DigitalGlobe, one of the imagery providers for Google Earth, has mid-2006-2007 images covering most of Haradh, but GE has not made them available at high resolution. However, using the low-resolution previews as overlays indicates that at least five of the new wells were present during that time. One of these, the northernmost new (green) well in the above figures, was seemingly on fire.

Well Done

Shown in the interactive graphic below is the region around a new well seemingly on fire in June of 2006. It was probably in production, as the pipeline to the rest of the Haradh-III network is in place. Move your cursor across the image and left click to view changes in the area from 2004-2009. All of the three producers visible were drilled or flowing at the time of the fire. The 2004 and 2009 images are from high-resolution selections in Google Earth, while the 2006 image is a lower resolution DigitalGlobe image. However, it is still relatively easy to identify changes between the high and low-res cases. Most notable in 2009 is the large number of new gas wells as compared to earlier. This is typical of all of Haradh, as drilling for gas has exceeded that for oil.

Figure 6. One of the added oil producer wells, spewing smoke in June 2006. Mouseover the dates to show 2004 and 2009 views. Click to highlight details.

Mission Accomplished?

With a flurry of rather glowing articles in the press as well as in technical journals, Saudi Aramco has crowned the Haradh-III project a resounding success. These articles are so consistent in their assessment of the project that it was rather surprising to find that it has required 52 producer wells instead of the claimed 32 and also required 3 additional injectors. A couple extra might be expected, but that so many more were needed and that this has not leaked out is somewhat shocking. What are we to infer from this? Lower production from each well (vs. the claim of 10k b/d)? More total production (i.e. over 300k b/d)? My bet is on the former. This certainly doesn't mean that Haradh-III isn't a significant achievement, but this does suggest that the geological complexity still hasn't been overwhelmed by technology. Saudi Aramco has been scrambling since opening day in early 2006 to meet the 300,000 barrels per day production target, and as of last fall, had at least a couple more wells planned.

Finally, I will note that the latest grand achievement by Saudi Aramco, the Khurais field redevelopment, also suffers from well inflation. When first announced, there were to be a total of 310 wells. When finally started up, there were 420 wells. At least they admitted it this time, although no explanation has been offered (perhaps they haven't been asked nicely). Hopefully, Google (GeoEye) will point its new camera at Khurais sometime soon so we may help them count wells.

To browse the well locations using Google Earth, go here.

Busted! Pwnd!

Grand stuff Joules. Your posts are always the greatest.

"iField"? You just know that their reservoir engineers are watching things like "Light Saber Kid" while on break.

Google Maps Link to the Haradh area. Those circles and half moons are more center pivot agriculture, if anyone's puzzled. I see that the Google Maps database is improving, I used to have no luck entering in field names, but it knows where Ghawar is now. KSA highway symbols show up as well.

I recall some study of industry averages for completion of projects/budget overruns/need for additional workover and infrastructure/etc. It was all thoroughly in the "red," i.e., your average project was coming in late/overbudget/overworked. I'm visualizing some slide from a .ppt that Gail (I think) posted quite a while ago; anybody remember this?

In that light, how typical would you say that Armaco's woes are?

This is another example of their neverending obfuscation, too.

Im interested in the center pivot agriculture. I wonder if thats an underground aquifer or a river of some kind. Or if they just built them along a road. It seems to follow a line - presumably a water source.

Is that the same water they use for res injection?

I wonder how KSA balances its water needs for agriculture and its growing population against its need to maintain production. I think Matt Simmons' book mentioned using seawater for injection too?

They seem to be importing food, exporting oil. but what happens when they need more oil themselves or production falls?... Food prices will be inextricably linked to oil prices and this is one more of the complex interconnections (in addition to fertilizer prices and the cost of running a diesel tractor).

Great write up though. Love the interactive graphics.

They announced a couple years back that, due to the impact on groundwater resources, they were abandoning the domestic wheat project, and were going to rely fully on imports by 2016: Saudi Arabia scraps wheat growing to save water | Reuters

They do use seawater, yes. The new and improved (?) Khurais pipes it all the way from the coast.

Haradh wheat - Google Search


Hail Project: located 650 Km North of Riyadh

Hail project is one of the most important NADEC AGRICULTURAL projects. The project activities include production of wheat, forages, industrial potatoes, tomatoes and onions.

Haradh Project: located 250Km East of Riyadh

It’s considered as the most integrated company project, as the company diary [sic] farms and diary plants are located in this project. Forage production includes alfalfa hay, corn and sorghum silage and Rhodes grass hay, Wheat production and date production are also among Haradh Project activities.

I wonder if thats an underground aquifer or a river of some kind.

It's an ancient riverbed of sorts called the Wadi As Sah'ba. Wells drilled tap the Umm Er Radhuma aquifer, which covers most of Eastern Saudi Arabia. Artesian springs from this aquifer have produced the oases at Al Hasa (just east of the Uthmaniyah part of Ghawar) and Al Qatif (north of Dhahran).

There is a curious occurrence along the Wadi As Sah'ba near Ghawar, and I will have a post on it one of these days.


Joules, the Wadi is the source of water for the many oases in Saudi. However it is not, or was not, the source of the water used to irrigate the wheat fields. That water came from non-renewable fossil aquifer water. The Wadi is replenished from rains falling on the mountains in Western Saudi. However most of the water for agriculture in Saudi comes from non renewable fossil aquifers.

Water, energy, and limits to growth

Water production in Saudi Arabia reached a peak in the early 1990s, at more than 30 billion cubic meters per year. Today it is at around 15 billion cubic meters, less than half than the peak value. At peak, 90% of the Saudi water came from non-renewable aquifers.

And: As Countries Over-Pump Aquifers, Falling Water Tables Mean Falling Harvests

Saudi Arabia, a country of 25 million people, is as water-poor as it is oil-rich. Relying heavily on subsidies, it developed an extensive irrigated agriculture based largely on its deep fossil aquifer. After several years of supporting wheat prices at five times the world market level, the government was forced to face fiscal reality and cut the subsidies. Its wheat harvest dropped from a high of 4.1 million tons in 1992 to 2.7 million tons in 2007, a drop of 34 percent. Some Saudi farmers are now pumping water from wells that are 4,000 feet deep, nearly four-fifths of a mile or 1.2 kilometers. Recognizing its hydrologic limitations, in early 2008 the Saudi government announced plans to phase out wheat production entirely by 2016.

And from Ugo Bardi and The Oil Drum: Peak water in Saudi Arabia

These news come as a surprise, but not so much. Saudi Arabian food production has been based on "fossil water." It is water from ancient aquifers that can't be replaced by natural processes in times of interest for human beings. Fossil water is non renewable, just as oil is, and it is unavoidable that it has to run out one day or another.

Ron P.


I didn't say the wadi was the source of the water. But, there is a correlation between where the wadi is and where the fields are, no? I believe that is because the aquifer is somewhat closer to the surface there, or less saline there, or whatever.


iField ? I didn't know Steve Jobs got into the oil business.

Steve Jobs dabbles in everything from Ipods, Iphones, to iFields.

Steve Jobs is definitely not an iDiot(!)

I wonder if we have any readers from Saudi Arabia who could offer their insights on what is going on--under a pseudonym if appropriate.

It certainly looks like Saudi Arabia is looking under every sand dune and offshore to try to find oil, and pumping in areas that are expensive or yield low-quality oil. These actions would seem to suggest that most of the "easy oil" sources have been found, and more and more iffy, high priced sources are being worked on to try to keep production up.

more iffy, high priced sources are being worked on to try to keep production up.

Probably because at $70 + per barrel they can afford to do it and make a profit.

If you look at a chart of KSA production, it seems to have distinct phases:


Up to ~1980 this looks to me like a classic 'vertical drilling' bell shaped peak - peak year for vertical wells 1980.

From 1980-1990 production was deliberately held back to meet OPEC quota.

From 1990 to 2003 production was boosted by horizontal drilling but even using this production peaked about 1998.

From ~2002 they moved on to max vertical contact and this peaked very quickly around 2005.

That is a neat chart, Thanks!

It makes one wonder how much spare capacity there really is.

True Gail especially when you consider the somewhat inverse relationship between horizontal/max contact wells and production rates.

That's what I would say may be the carry-away lesson of the article, as an example of a cutting edge field development. It looks like they may have gone very rapidly into a declining production rate and had to add wells and injectors to make their projections. In particular, it makes their 2% annual depletion rate look pretty optimistic.

Exactly. The "phase diagram" reveals what we cannot see from looking only at the barrel produced as we use to do using the Hubbert method. I still think that KSA is chiefly a swing producer and the production amount is still due to the OPEC limits and price policy. But the effort and methods for maintaining the same production level tells a different story.

So KSA is like a person who is quietly lying in his bed and his doctor assures that he is all right - but nobody notices that he is clandestinely being transferred to the intensive care unit of a hospital. Now Ghawar is under intensive care.

Here's my entry into this sweepstakes:

KSA Production vs Consumption with %s 1965-2008

This is a stacked graph, nb. Exports = Prod-Cons. No doubt a bit gets scrambled up into stocks. The percentages are of the total volume. KSA's energy consumption is 60/40 oil/NG. EIA said demand was to grow (from whence I'm not sure) 8-10% by 2010, mostly for power generation + petrochemicals. 2008 showed 7.14% growth. Growth in power generation is sure and steady; a linear trend through their electrical generation history has an R2 of 0.98.

KSA could do a lot with solar or solar thermal. This sector is due to go through the roof; doing so would free up a lot of oil for export. Heavily subsidized prices prevent it from doing so, also perhaps wishing to save face in some fashion. Saudi Arabia deigning to burn fossil fuels - crazy talk!

Global Concentrated Solar Power Industry to Reach 25 GW by 2020 - Renewable Energy World

Very interesting figures. ELM is apparently alive and doing well in Saudi Arabia.

Since 1982, stated internal use as a precentage of stated production looks to have doubled through 2007, though I would add that absolute use has gone up every year.

Using the assumption that internal use will increase i.a.w. the present annual increase, and production has peaked, can anyone project the date that exports will equal zero?


Since 1982, stated internal use as a precentage of stated production looks to have doubled through 2007, though I would add that absolute use has gone up every year.

That is an artifact of the simple metric that went into this graph; since production was voluntarily cut back in the 80s consumption shows up as an inordinately larger percentage of the total. The actuality is worse, actually ;), go with the 1981 number of 7%, where they were producing at full, and consumption has trebled.

At the 2007-2008 growth rate KSA consumption will exceed production in far off 2058. Why do you ask, Mr Huber? ;)

That's assuming production stays flat, no massive alien invasions, stuff like that. 2007-2008 = 170.26 kb/d; 2000-2008 average diff was 102.47 kb/d, so that 2058 number is high case. I think this is why no one except bloggers cares much about consumption in producing nations, not that it isn't important, but...

Might as well say this following that graph. If you look at consumption numbers for a number of countries. And I urge you to find it on your own and do a bit of research as everyone should bone up on consumption/demand etc its important. What you find is that consumption tends to follow population growth which in general follows a linear pattern. Non-linear increase in consumption of oil are rare and as even rarer in oil importing nations.

Its a big topic in and of itself and its one I disagree on as far as ELM goes not that ELM is not real but that real consumption growth is seldom non-linear.

However if you suspicious about a oil producing countries actual production levels then non-linear increases in internal consumption are a bit of a red flag that all is not as it seems.

In any case one can readily take the linear trend and extrapolate it through the present and wonder why the sudden increase in internal consumption coincided with a rapid increase in the price of oil. Or one can accept the official argument that rising oil prices caused higher cash flows and the population of the oil producing nations then decided they needed to do donuts in the desert for four hours a day burning up the gasoline that still only cost them 25 cents a gallon regardless.

Of course no one else is going to explain how a lot more money is going to induce people to use a lot more gasoline that was already dirt cheap in the first place and not even and issue with per capita consumption already higher than the US in its heyday.

More likely oil consumption continues to rise in proportion to population in these countries which is roughly linear but as I said a topic worth of discussion. In any case there is a compelling case that some real declines are hidden in elevated internal consumption claims. So finally the assumption of a constant production rate with ELM is probably not correct. Better to assume that we are seeing and accelerated real decline rate and linear increases in consumption resulting in and ELM thats probably has a higher net export decline rate then what WT gets.

I'll play with those numbers someday, but right now I'm content messing about with examining historical demand, mostly just in the US, both for selfish reasons and since the EIA data is a magnitude more accessible than that of other countries. Population is interwined with GDP, with overall economic structure, and a host of other factors, plus oil consumption data itself is largely restricted to annual numbers in most nations, and then only back to 1980 with the EIA, precisely after when things became very interesting - peak demand really kicked in.

Have you played with Morgan Downey's Oil Demand Motion Chart? No setting for population but you can feed in per capita GDP.

the population of the oil producing nations then decided they needed to do donuts in the desert for four hours a day burning up the gasoline

We cannot forget that as extraction becomes more complex, the energy used in exploiting the oil fields increases. Hence, the horizontal drilling is more expensive and energy intensive than vertical shafts were. Likewise, injection of water and co2 is more energy intensive than natural pressure and simple jacks. This is, according to my understanding, a part of ELM. Plus, of course, increasing population, higher living standards, military defense of oil fields (probably the most overlooked, though seemingly obvious), and in some cases aid to Palistine, perhaps to the Taliban, or other governments and religious groups, and so forth.

A strictly linear growth would not seem possible. In fact, even as a function of population growth, in a young population with a high birth rate, nonlinear growth of oil use within the nations would be more likely than any other scenario.

As far as doughnuts in the desert... well, maybe some of the wilder princes? I dunno. Interesting thought though. :>)


There is a lot to it and your not considering expansion of NG usage use of residual fuel from refining instead of buring oil directly etc etc. Certainly in the US the aging of the baby boomer generation did not lead to substantial growth in oil consumption. Indeed it generally declined over the same period.

I've read enough to question this claim of exponential growth in consumption esp given as I said gasoline is dirt cheap and consumption is if you will saturated. Consumption changes in the US where very much and issue of price and it took significant increases to stall consumption increases.

I've been waiting to some extent till WT publishes his paper. And overall I agree with it just that its important to decide if its consumption increases or real declines being passed off as a sharp increase in consumption above the "norm". I've come to the latter conclusion. With that said it does not change the ELM conclusion except that actual export declines may be significantly higher as obviously geologic decline is not limited by the population and the decline rate can easily exceed what would happen with simple increased internal consumption. However obviously some of this is accounted for to some extent in the "official" numbers thus the results of the ELM calculation regardless of if the missing oil is from decline are internal consumption is basically the same.
To a point.

If I'm correct then Saudi production has been in decline for some time with peak somewhere in 1998-2003 you can read that off the original graph. If so then they are now well past peak and experiencing a gut wrenching accelerating in the decline rate. And this event is already also in the past.

Saudi Arabia is not long exporting much oil to the US less than 1mbd if I recall correctly from the EIA data correct me if I'm wrong.
The claim to be focusing on the Asian market however.

Asian buyers are taking record
volumes of West African crude oil this year as fuel consumption
rises in India, China and other East Asian countries, a Reuters
survey of trade sources showed on Monday.

Imports of cargoes of unrefined oil from Nigeria, Angola and
other African producers via Atlantic ports averaged around 1.79
million barrels per day (bpd) in the first quarter, up from
about 1.53 million bpd in the fourth quarter and close to 1.1
million bpd a year ago.

In the first three months of this year, Asia consumed about
40 percent of the 4.5 million bpd of West African crude oil
produced, up from around 25 percent in the first quarter of
2009, the Reuters survey shows.

Seems as if Asia is buying from Africa.

So the Saudi's are not shipping oil to the US and not shipping it to Asia perhaps just perhaps they are not shipping it at all.
If so then its not just ELM since it matches well with a real underlying decline that was foisted for a while as explosive growth in consumption and we are now at indeed past the divergence point where ELM coupled with intrinsic declines work out to some nasty net export numbers. You think WT ELM is bad if you include estimates of accelerated decline rates from advanced technology anywhere close to what we saw in Mexico the numbers are horrendous 20-30% net export decline rates.

Can I be wrong sure but the problem is if I'm even close to being right things get ugly fast. Its not prudent to blithely dismiss such and outcome and it does not require anything extraordinary for it to be true. What I'm saying is not far fetched and if it was really happening and the Saudi's admitted it then the reasons are not intrinsically shocking their fields are old and have been aggressively extracted. The only thing that makes such people even consider such assertions as questionable are simply unsubstantiated claims made by and about Saudi Arabia. For that matter in my opinion Iran is also playing the same game and so as Indonesia. Until recently Mexico seemed to be truthful and with in reason Russia. Norway and Canada probably telling the truth and so is Vietnam.

In fact if you want to take a model country of what I'm suggesting simply take a hard look at Vietnam as far as I can tell all there numbers are pretty legit, also they have steadily increasing internal consumption and falling oil production. I think they will no longer be a net exporter this year. And because of the war they also have a very extreme boomer cohort passing through so if any country is going to show explosive increases in per capita consumption its Vietnam. Next you can compare them with neighors such as Malaysia and Thailand and even the Philippians that have different demographics and GDP changes. And you have Indonesia and Malaysia as significant oil producers thus models for importers exporters and former exporters all with very similar economies exist in the region. My point is that you can readily use southeast Asia as a sort of model for the various factors effecting ELM to consider if a given country is hiding declines via elevated consumption claims. Obviously I've looked and my conclusion was the Saudi's are lying.


Good post, your points are well taken. Of course it seems like we should be using the advice from the movie "The President's Men" and "follow the money".

Oil consumption in the most developed nations (i.e, U.S., Europe and Japan) has been relatively flat. If China, India and the other Asian product exporting nations are buying from Africa and not Saudi Arabia, then Saudi Arabia should have what every seller hates...a shortage of customers, especially big customers.

So sooner or later (one would guess sooner) they would begin to experience what everyone hates, a real money shortage.

Have we seen any signs of this yet in KSA? Any Texan here (and I know there are plenty here!) should be able to verify that pain in the oilfields, either in price or production levels does not take long to be felt in the larger economy.

And speaking of money...some of you folks surely have a dollar price on what all of this oilfield development must have cost...did the Saudi's bear the bulk of this expense themselves? It seems important at this point to have some big customers waiting for that oil and willing to pay a pretty fair price for it. Are they out there?

It is easy to call the Saudi's liars (I have unwisely insinuated as much myself in years gone by), but they have had a history of delivering the may be more correct to view them as suffering from hubris or cockiness...because they have delivered the goods in such a big way for so long, they honestly believe there is no end..."the road goes on forever and the party never ends", hey, we've always done it...

your point memmel, "Can I be wrong sure but the problem is if I'm even close to being right things get ugly fast."

Once again, this is to me is the great fear about peak one knows when the floor may fall out from under us, and one day is as good as the next...why not tomorrow? Why not 4 years from now, or 10 or 22 years from now? Our reliance on oil as our primary, almost monopoly transportation fuel makes us vulnerable to potential catastrophe. In the interest of risk management alone we should find such a situation intolerable. But for now, let's look at the Saudi economy and see if they are suffering any worse than the rest of us from a real cash shortage in their economy. That would be a major clue to duck and cover your ass FAST.


LOL we probably can get the well logs for every single well in KSA before we know about the money.

Its not Saudi Arabia but obviously Dubai was thrown to the wolves.

And the Saudi stock market crashed a while back. Don (observer1) is a money guy and knows more.

But Shari banking is a strange world and of course your dealing with a Monarchy so state money is a fluid thing.

Very old post but it might be helpful to see what they did last time oil was dirt cheap and they needed money.

I will admit that I've avoided to a large extent diving into what money trail exists in the ME.

Speaking at the Reuters Islamic Finance Summit in Dubai Wednesday, Bakar said Saudi Arabia will lead the sukuk pipeline this year as it funds infrastructure projects.

Bakar said the kingdom has the economy and population to support such projects. He added that his firm has two to three mandates for sukuk issues in 2010, mainly coming out of the kingdom.

"I'm looking at two or three sukuk issues," he said. "There should be 10 to 15 sukuk issued throughout this year by the corporates in the Middle East, at least $400 to $500 million each if not more."

That in my opinion is not good news. I have read a bit about this but obviously if they are having problems with oil production and suddenly willing to enter into the money markets then its not a good sign.

But you would have to be very knowledge about Islamic financing the ME and KSA to know. And of course look at their buy side treasuries bonds etc etc whats their Sovereign wealth fund doing can you even really know ?

And of course although they have claimed little damage from the financial crisis one has to imagine whatever is going on in the murky world of high finance also has a big effect on the money trail.

Excellent idea but also I wish you well if you choose to chase it. I'll watch it a bit closer for sure but but I'm not sure what really possible or knowable. By definition the Saudi royal family is a conspiracy of some very wealthy and powerful people no tin foil hats required.

memmel, don't you ever sleep?

Very impressive analysis and deduction, though.

Wow, impressive sleuthing and analysis. If you're ever looking for work, I'm sure the CIA would love to have you on-board ;)

Tom Whipple (writes for ASPO-USA and Falls Church News Press) is a former CIA analyst. Sounds like a good work area for peak oil analysts--especially "Joules Burn."

Now starring in "Oilfinger"... "My name is Burn, Joules Burn."

So many wells, so little time

It comports with figures I have seen that S.A. added some 500 wells in 2006-2008, with zero increase in production [or, importantly, in exports].


Fantastic facts and analysis. Thank you for sharing it.

This is a nice piece of work. If I'm reading this correctly, it boils down to 'Better Superstraws Through Technology.'

/sarc on/
But don't you think real-time reservoir management will be critical when all the excess abiotic oil starts bubbling up to the surface?
/sarc off/

Simple, indisputable exposition of a complex topic - much appreciated.
Sweet interactive graphics - unless one is even a wee bit color-blind.
Wish I could resolve a "new producer" from a "new injector" on the maps - maybe try X's and O's?

Sorry about that, Chief.

The injectors are only on the periphery, so the four new ones are those that look blue/greenish.


Good article.

Now considering the well count. First if anyone has any knowledge of some other large project that suffered wellitis with a large increase in the number of wells it would be nice to know about it.

Next I've not read about this happening and given the technology employed to site the wells in the first place it seems doubtful that the new wells where added because of a major blunder.

I tend to seriously doubt that these new wells are blunders or and issue with the project. That does not mean that the real production levels either per well or in total are the same as whats claimed. They are what they are and we will probably never know for sure however what ever they are obviously production is high enough to make the investment.

Now although we don't have individual field data that matches this sort of activity we do have a very good fit if one considers regions.
When the US peaked there was a massive drilling campaign often resulting in marginal and or unprofitable wells being drilled.
I assume other parts of the world should show a distinctive and real increase in drilling as fields and regions decline.

Thus the additional wells here and in Khurais are probably not being drilled because of serious issues with the fields themselves but in a vain attempt to offset a major and serious decline in production elsewhere.

Now with that said the obvious culprit is the rest of Ghawar. So I'd suggest that not only is this good evidence that Ghawar is in decline but also that its decline rate is "surprising" some people.

Next one can speculate that these project where originally designed to offset declines in Ghawar's production i.e back when they where conceived for development the decline of the producing regions was either a concern or already starting. Given that it seems additional work was done to probably offset unexpected declines it makes sense that the original development was done to offset a lower expected decline rate.

The Haradh area, located at the southern tip of the Ghawar oil field, was developed in three increments of 300,000 bpd of Arabian Light crude oil capacity. The first of these increments, Haradh GOSP-1 (gas-oil separation plant), went on stream in March 1996. The second increment, Haradh GOSP-2, was commissioned in April 2003. The third increment, Haradh GOSP-3, came on-stream in January 2006, five months ahead of schedule, and also added 140 million standard cubic feet per day of associated gas processing capacity.

Thus going with the assumption that Haradh was developed to offset declining production in the other producing regions of Gahwar the knowledge of real declines or pending declines obviously existed before 1996 !

This has GOSP-2 comming online in 2000 a few years here and there don't seem to matter much :)

The exact dates are not super critical just that it seems reasonable to assume that the underlying goal was to offset declines in other producing regions in particular the rest of Ghawar. The basic time table coupled with this flurry of drilling suggests that not only has Ghawar probably been in decline for some time but that its decline increased unexpectedly later on. This could well have even been before 2006 even if decline rates are increasing you would still need to execute the original project as planned and then some.

The fact the project seems to have been expanded effectively at the same time as its original schedule suggests that the condition that was causing concern was pre-existing not something that came on as the project progressed.

And next given this speculation we can guess a timeline for the decline of Ghawar starting sometime in the late 1990's early 2000's and becoming increasingly serious by the late 2000's. This sort of time line fits well with assumptions about the underling reasons behind these projects.

Do we have any supporting evidence to suggest such a timeline is not just idle speculation ?

Well first and foremost the huge increase in price of crude over exactly the same period suggest that indeed a major source of crude could have readily declined substantially. This alone in my opinion is sufficient to support the strong possibility that Ghawar has already declined substantially in production.

On top of this on my blog I back calculated oil production from atmospheric C02 data and determined a real substantial decline in production over exactly the same period.

This paper along with the series preceding it in my opinion supports concern about the situation at the very least.

And last but not least given the nature of Ghawar and its position esp in global exports at the most basic level it makes sense that a emergency if you will in global oil production not tied to some war or other event would probably be related to problems in Ghawar problems in any other region simply cannot occur on a scale to dramatically influence world oil prices. No other single field produces enough to have its decline have such and impact. And combination of fields results in fairly large spread and much slower average decline. And last but not least given the size of this project if it was declines elsewhere in the world then this and other Saudi projects would have gone a long way to offsetting the declines unless Ghawar was in steep decline :)

And last but not least this casts some serious doubt on the validity of peak oil theory as if its true then most of them blew it.
Obviously I don't have a lot of faith in traditional peak oil theory as it uses industry data to predict peak oil. Given the above obviously industry data is not worth anything. Some reasonable sleuthing paints and entirely different picture and peak oil theorists dependent on industry data during and after the real peak oil event when the quality of the data is highly questionable cannot generate any realistic projections. GIGO.

Whats really interesting is this faith in the industry data comes even though most peak oil theories reject the obviously political bump in reserve figures by OPEC. The most blatant and questionable figures are rejected yet beyond that nothing is done.

Thus these series of papers on Ghawar are probably the most important one published concerning peak oil as they suggest using raw data that things are not as they seem the peak oil community has been way to complacent in its acceptance of industry data without fact checking.

Certainly its not easy to figure out ways to double check and cross check claims made by the industry but with some creative thinking as shown by this series its possible.

And obviously my conclusion is that most people have seriously missed the true situation. Small wonder that peak oil theory is not taken seriously as its relatively easy to mislead the theorists as they simply don't have the desire to check their data.

This work as I said based on raw data stands beyond the crowd and its importance and implications should not be underestimated.
Hopefully my suggestions at least cast a reasonable doubt on official numbers at least enough to suggest that and aggressive effort needs to be made to audit the industry data using creative approaches such as this. As long as the peak oil community is happy to accept GIGO then it will never be taken seriously.


There are other pieces of the puzzle which come to light when considering the import of Haradh to what is going on further north. All three phases of development have had major issues, and continue to be areas of activity. I decided not to do a comprehensive tell-all about Haradh in this post because it was better left as a simple premise with irrefutable evidence. Suffice it to say that a lot of new wells have been put in Haradh-II in the last few years, and Haradh-I had five rigs drilling new oil wells when last photographed in 2006. But, as is the case for Haradh-III, the nice Saudi Aramco story of technological progression from north to south has been cleaned up for prime-time television.

I do not believe that they are trying to get more out of Haradh than intended. There are scattered reports of them having to shut off MRC well laterals rather early to keep the water cut down, and when you do that, you have cut your capacity by one fourth to one third. After awhile, you're talking serious barrels, and the only way to get more is to drill more. Plus, the new well locations (even though we don't know where the laterals go) don't make sense from the perspective of their original plan. That is, the next step would be to put wells in the middle of the "V" rather than just put them where they already have drainage.


Hopefully I was clear that the additional wells where probably not according to plan. If not I was suggesting that they where added under duress. Now the key is interpreting why. As far as the Saudi claims on specific number from per well production levels to overall field production levels I take those with a big grain of salt. However these are big projects and in this case into a effectively virgin and well known field. Sure it has some problems yes like all projects but I don't agree with your conclusion that the new wells are because of problems in the field. Especially given the new wells you mention in other older projects and other fields.

On the technical side I've never had any reason to question the Saudi's ability to plan and execute large projects and hit their design objectives questioning what the real numbers are is quite different from questioning the execution. In general they do what they plan to do and achieve it. Certainly they have to deal with problems like everyone else but I don't have any reason to believe that serious miscalculations have occurred in the planning and execution phase of their projects.

I don't agree with the conclusion that the new wells are because of intrinsic problems with the projects and that serious technical issues are the reason behind the extra wells. Thus assuming they are technically competent and I have no reason to assume otherwise then the new wells are a desperate attempt to offset serious decline elsewhere.

Certainly there are technical issues but I don't agree that thats the correct explanation not to mention almost impossible to prove :)
Sure technical issues can certainly explain part of the situation but I'd suggest its probably a fairly small part.

So I think they executed the projects and basically met original design goals however those turned out to not be nearly enough to meet their overall need because of issues elsewhere. Thats what I see in your data not a large number of serious technical problems in the field itself. As far as real production levels go given the design its certainly 100kbd plus but I'm no expert and can't say more than that. Was it every really designed to produce 300kbd ? Dunno perhaps someone with more expertise can comment on the possible production range for the configuration.

Obviously if I'm correct and the additions are to offset decline elsewhere then a range of possible real estimates on the original production levels and new production levels with the extra wells plus whats been done in other fields will give you some idea about the amount of excess decline they are trying to overcome.

I can tell you now there is only one field in the world that can decline at a rate sufficient to cause what your seeing.

The rest of Ghawar.

There is one facet of my observations that clearly points to shortcomings in the original 32 productions wells as opposed to adding new wells to produce even more oil from Haradh-III. Specifically, there were only 4 new injectors added. One of those seems to fit where there should have been one anyway, and the two at the northwest corner were probably put there because of issues they discovered when pressurizing the field in the last months of 2005.

If the new wells were to represent added production, one would expect a proportional increase in the number of injectors (16 or more), and more evenly distributed.

Why do you suggest this ?

If the new wells were to represent added production, one would expect a proportional increase in the number of injectors (16 or more), and more evenly distributed.

If the field has pressure it has pressure you noted they only add four more then thats what they needed.
Perhaps as production progresses and the field is much older you would get that sort of relationship but at this stage those
injectors are primarily for pressure and most of the field is still oil.

I don't understand your logic can you explain a bit more ?

Lurking experts perhaps may want to chime in ?

i think this is a "we just don't know" case.

additional injection wells may or may not be necessary to support additional production, it depends on the injectivity and location of the injection wells.

this presents a paradox: if aramco's modelling was correct a priori, then additional injection wells would probably be needed but if there modelling was a bust,well, it was a bust. they may not have gotten the injection right either. who knows ?.

i suspect aramco had a pretty good idea of what water injectivity would be.

Injectors provide more than static pressure; they provide flow. If you take 300,000 barrels per day of oil out, you have to put that much water in (more if water is coming out too). So, if they are taking (say) 450,000 b/day oil, that means an extra 150k b/d water has to make its way toward the center of the field. You are not going to do this unless you have a sufficient number of injectors, distributed appropriately to maintain sufficient pressure at where the new wells are.

Well no.

Consider a field that produced under natural pressure i.e no water injection at all you get what 20% recovery sometimes better.

Later on in the fields life I agree what your saying is important but early on depending on the nature of the field you don't even need water injection. And this is a very tight field so the initial role of water injection in such a situation should be fairly minor.
Note this is from simply reading about modern wells in other tight formations I've never even read about about secondary recovery being used at all as far as I can tell its all primary.

Where is FractionalFlow when you need him :)

This suggest that injection rates in tight formations are low and that water injection is primarily to prevent reservoir damage.
I'm not saying your wrong about the need to sweep eventually but its secondary. Also of course one has to imagine that you have a lot of leeway into the actual injection rate for a particular injector well. I don't see any intrinsic reason why the rate of injection cannot vary over a fairly large range. ( Expert help needed)
Given the way Ghawars been developed in general the initial infrastructure is almost certainly designed to handle how the field will change over many decades what ever was put in now was probably put in place in anticipation of conditions at least say ten years from now.
As I've said I think you have jumped to the wrong conclusion that the excess wells are related to problems within the project itself.

Again I don't know for sure but I disagree that your assumption of the need of significantly more injectors to ramp production.
Its not that simple.

the south end of ghawar is "tight" ?, relative to what ?

Well yes.

This is Ghawar without water injection:

With natural pressure from the aquifer, the water still has to come from the periphery. It doesn't just magically appear near the bottomhole of the well to replace what you have taken out. And the only way it gets from the periphery is to flow there, just like the water you inject from the edge of the field. Without water injection, fluid (oil or water) cannot flow from the periphery fast enough, the pressure drops below the bubble point, and you shut down your well. Even now in central Uthmaniyah, there are wells which are dead because the pressure is too low, and the oil pressure at the surface isn't enough to get it to the GOSPs.

So when water is injected, you create a band of high pressure which can cause water to flow uniformly towards the center to replace the oil that flows out. But if you just put in a few injectors, they are not going to be doing much to maintain the pressure on the other side of the field.

Bottom line: water injection maintains pressure by injecting water, and if you don't replace what has been taken out in oil (and produced water), you are not maintaining pressure. And if there isn't low enough resistance to flow of fluid (water or oil) between where you inject and where the well is, your pressure will continue to drop.

As far as the reason why they are putting in more wells, we are both speculating. You have your mind made up about what is going on in Ghawar, and I believe that colors your speculation. But the main purpose of this post was just to point out that they are adding them in difference to what they say, so let's just leave it at that.

Naive oil-patch question. What keeps water or any other substance injected into a field from back-flowing or seeping out from where you want to add the pressure to increase your flow rates? How do you keep the pressure going forward, continuous pumping in?

Well you can't some water will always escape and go a different direction. However you must remember it is an anticline, with a cap rock not only on the top but on the sides as well. The same cap rock that caps the oil also caps the water.

Also, there is always pressure at great depths. When you allow the oil to escape the pressure naturally drops but only in the area where the oil is pumped from. When you inject water you are only restoring the pressure to what it was before. The area all around, and below, the reservoir is already at a very high pressure. The injected water will simply re-pressurize the area where the pressure has dropped.

Ron P.

Here is one example of what happens:

Water from the Ghawar injectors was pushing towards the Harmaliyah field to the east, so Saudi Aramco decided they had better put in some wells to suck the oil up before it got pushed further east and out of reach.

Ah...good review in the link. I had seen that previously but forgot...thanks. It would be nice to keep this current thread going in updated form, perhaps TOD editors can do a new thread as "Updated". I have a feeling we will want to refer back to all this as things progress in spring/summer 2010.

You have your mind made up about what is going on in Ghawar, and I believe that colors your speculation.

I think your understating my position :) I'd argue that its extreme to highly radical "colored" simply does not do it justice.

I'm 100% confident I am beyond a shadow of a doubt and have no problem being extreme and perhaps "colored" if you really want to tone it done however I'd prefer a stronger term as I think I've moved well past that point. Often rude in some posts and I really don't care if people agree with me or not as given my position peoples opinions really don't matter. At best depending on how they think they can make changes in their personal life but thats their problem and I don't care either way. They can take or leave what I have to say.
In fact one of the hardest things to get across is the fact that what I think and what you think does not matter one bit if I'm right.
Nor does the opinions and position of anyone on this planet. We can no longer avert the whats going to happen at best we can make decisions now that may or may not help us later. The only thing that really bothers me is if I am right then the fraud committed by our leaders has played a huge role in putting us into a certain catastrophe. The way people thought in acted in the past is very much a part of whats got us into deep doodoo if I'm right. And if so well then simply out of vengeance I'd really really like to see the liars and crooks exposed for what they really are even though it does not change anything. I don't know about you but I'm not particularly happy about potentially living through the end of a civilization simply because what people think became far more important than reality and truth and the manipulation of how people think eventually resulted in a very ugly truth.

The fact I have a "colored" position does not matter its worse than that however ..

Am I right ?

Self-understanding is a good thing. But given your diagnosis of the situation, why do you comment on TOD?

Just asking...

Ultraistic Altruism.

Lets assume I'm correct.

1.) If so then our current system is based on a pack of lies at all levels to some extent this is becoming clear.
If so and if its exposed and documented and the full extent of what we have done is made public the future historians
should have a excellent written record of this time period. I'd believe this will help others avoid the trap we fell into.

2.) On a personal level obviously there is little reason to rise up in revolt or become violent the system will collapse soon enough on its own accord shaking it will do nothing. Thus your left with personal action. Well in general thats fairly benign and focused on becoming self sufficient how ever you feel is the best way. The advice is in general WT ELP ( Economize Localize Produce) I don't see that this is harmful to anyone. Even if later on things turn out for the better taking some time to try and take control of your life is simply a generically good thing. So any action is really pretty harmless to society and helpful to the individual if not society.
At worst your consumption levels fall and you don't help us spend our way out but Jevon's paradox assures us others will take advantage and consume what you voluntarily forfeited. This does not change the outcome really either collapse or we are better off and we return to growth. So overall pretty mellow.

3.) Karma, Its a small world perhaps someone actually listens to what I'm saying makes whatever personal moves they want to make and it works out for them. Maybe one day I'm a refugee fleeing some conflict and trudge up to a farmhouse begging for food. Perhaps this person finds out who I am and feeds me to thank me. The point is that individual decisions are themselves of no concern but life has this way of sometimes every now and then allowing a good deed to result in a benefit. Not all the time but if you don't try then you never know.

4.) Following on with Karma is the reverse in that if I am right and I chose to say nothing that act is wrong. Far better to do my best to state my position and take the scorn ridicule and disdain certain to be heaped on me by those far more intelligent and smarter than myself than to say nothing even if in the end I'm wrong and they are right.

So in the end because it is the right thing to do regardless of if I'm right or wrong.

Perhaps thats why I moved to doing open source development exclusively many years ago because in the end it was something that I felt was the right thing to do. The same underlying outlook that drives me to do that also makes me comfortable in taking this extreme position in both cases I believe I'm right and part of being right is to do the right thing and share your position with others.
Not doing so would be like writing a bunch of programs claiming they where open source then never giving them to the community.
Thus If I was unwilling to publicly state my position it would be exactly the same as doing open source development and never releasing why ?

So for me all that really matters in the end is that perhaps a few people read what I write and begin to doubt the situation and start searching for the truth until you can doubt you will never ever have a chance if the truth is as extreme as I claim. You have to take and ever more skeptical position to even hope to pull all the pieces together. At least thats how I did it at first I believed the EIA data for example then over time I simply hand no choice but to except that they where lies but then of course your left trying to guage the depth of the lie. Well turns out its a chasm, but you can only see it if you start doubting. Or at least its the only way I know as thats the path I took. Thus ultraistic altruism forces me to shout hey things are not as they seem but to see you must doubt and find the truth for yourself.

Of course as things unwind this becomes easier and easier everyday I suspect that a fair number of people have already realized what I have. Many of course did so long ago the intrinsic lies have been in place for decades simply festered. But you have to first doubt.

For the sake of argument assume the Saudi's are lying and already in steep decline the rest follows if you can't even make such and assumption and test it then why ridicule me ? Its standard logic to assume something is true then prove it false. I don't understand why people are so unwilling to take such a position and work through it. Perhaps because if they do they know damned well that its impossible to prove its false. In fact all reasonably independent faces point to the fact its true only believing the pronouncements of Saudi Arabia and the EIA as true can be used to discount the hypothesis. Not one single real verifiable independent fact supports the Saudi's not being in decline. And if thats true then what else is true ? You can be sure theres more. Thus if you can't prove that the Saudi's are not in decline then the entire house of cards comes tumbling down. And as I said it cannot be done with independent facts you have to trust the Saudi's and other agencies with vested interests to tell the truth to prove they are telling the truth. Thus only by believing a fallacy can you contradict what I'm saying.

I'm not convinced I'm the crazy one :)

I fear we have no way to predict the detail of this EOWAWKI. All past End of Your Civilisation events have revolved around the comparatively gradual unravelling of food supplies due to changing climates or politics or wars, a bit of localised rape and pillage and the odd bad case of the flu.

But this time we are confronted with the boolean event of either having oil (and sulphur, and food etc etc). Or not. In my country we have no internal resilience at all to the non-arrival of our twice-weekly tanker load. There is no national strategic reserve of crude, no local oil-for-fuel production, and no neighbours for 2000km in any direction we can scrounge some off.

Either the trucks will keep shipping 1000km food to our supermarkets, or within 5 days of the tanker not arriving (within say 2 weeks of our oil supplier coming second in the bidding war for some crude) our shop's shelves will be empty and it will be Instant Dark Ages by Sunday.

I just read a quote from a local artist that fits this situation..."Sanity is the ability to identify Insanity".

Thanks Mike for all of your work. I admire the narrative and the rational for the "hunting" of Saudi. Pattern Recognition from disparate data is hard to explain to those that have not trod "the same path".

Now where is Fractional_Flow? This is the kind of post that he/she would pop in for a comment. Does the smiley indicate that you are in contact or know the whereabouts?

Memmel, I think you're being a bit harsh on the peak oil researchers. There's been a lot of discussion all along -- certainly since I started taking part in the discussion in the late 90s -- of the dubious quality of reserve and production data, and various efforts have been made to work around it; there have also been plenty of analyses that took the official figures and said, "Okay, even if this is correct -- and it's probably way on the optimistic side -- we are in deep fertilizer."

That being said, of course you're right that these very close analyses of specific fields give us another set of data points that are of huge value, and Joules' work in particular is a must-read. I don't think there's any doubt at this point that Saudi production capacity isn't anything like as stable as the Saudis claim, and may decline a lot sooner and a lot more steeply than the more sanguine analyses have tended to suggest.

I don't think I'm being harsh I'm sorry one of the basic tenets in science is to validate your experimental data.
This fundamental step has not been met by peak oil theorist. I'm sorry its simply not been met. Until you have some way
to validate the data then the theories are worthless as predictive tools and are at best qualitative.

Not only can they be off by a mile I'm convinced they are. They blew it completely. There are a number of ways to check the data produced by the oil companies and I'd argue that all of them suggest that the current predictions of peak oil based on industry data are simply wrong. Sure I'm being harsh but the price movement alone should have been enough to cause people to seriously question whats really going on.

And I'm being harsh for a reason. If my conclusion is correct and peak oil is not and event that occurred recently but well in the past then I think its obvious that our society is going to have some serious problems in the near future. Timing becomes important.

Sure I could be wrong however if peak oil was well in the past and we are well down the backside depletion curve and nothing has been done to address the issue then our options right now are very limited if they exist at all. My opinion is that the general peak oil community thats taken up the issue of peak oil yet has completely utterly missed its occurrence and the implications is worse than simply dismissing the situation. Its like someone becoming concerned about the housing bubble in 2003 then deciding based on data from the housing industry that any real bubble would peak in 2010 followed by a slow decline in housing prices.

You may laugh at that example but thats exactly how peak oil is proposed to happen by its supposed proponents for all intents and purposes its the same problem as one would have using the housing industries data at face value. If its stupid to do it with that industry which is huge why on earth do we do it with the oil industry ?

Both are critical core industries sized in trillions of dollars one obviously was a complete shame how about the other ?
If you willing to believe the oil industry to the same level you believe the housing industry then your at least off to a good start.
If I'm right then both are equally rotten and its important to expose them.

Look at the damage that has resulted from the housing industries pack of lies if I'm even close to right about the oil industry then harsh is the correct way to act. If you think the collapse of the housing ponzi scheme was bad then consider oil.

After years of studying peak oil and researching it I've found my conclusions compelling enough to cry wolf and mean it.

You can of course dismiss me fine but what if I'm right ? What if the data from the oil industry is so bad that the real situation is significantly different from what the public is presented with ?

Heck the situation in banking show another huge industry full of deceit given the depths of the problems there one would have to think that the suggestion that similar serious issues exist in the oil industry should at least be considered ?

If you choose to look I'm confident that you will find the depths of the lies and deceit in the oil industry rival those in the banking industry with similar dire consequences. Again the price of oil alone should at least suggest we are in a oil crisis
of the same scope as our financial crisis it should have been sufficient to spur the community to question the truth yet it has not.

So I'm sorry this possibility has simply not been addressed by the peak oil community thus harsh is the correct response.

You ARE wrong...but I forgive you

Interesting article.

I agree with memmel in general, but I don't think there's anything that remotely resembles a "peak oil community." At best there's the IEA, and they have dropped the ball, as is evidenced by the continued downward yearly revisions to production estimates.

Even if there were a peak oil Greenpeace or equivalent...what exactly are we supposed to do? Take to the high seas like pirates and board tankers from Saudi Arabia?

Same approach people took with the housing bubble ignore the industry and focus on the data that matters.

For the housing bubble the key metric was rents incomes and mortgages ratios. Thats all that mattered the fundamentals.

I for example took the route of looking at atmospheric C02 levels if we burned it then its gonna be in our atmosphere.
Its not.

This example start counting wells.

The claims of a ghost fleet full of oil well a lot of the tracking data is on the web see you you can find this ghost fleet.
And I call it a ghost fleet because it does not seem to be there.
I've looked at VMT also.
Look at the Baltic Dirty Tanker indexes and clean tanker indexes. Fleet additions and scrapping.

These millions of cars that China bought well they had to be built somewhere that was a massive purchase I see nothing that indicates that they where ever built. The auto industry should have been running like gangbusters with a new auto industry the size of the US emerging yet GM went bankrupt.

Right a post on the oildrum not even a key post just something in the drumbeat perhaps start getting people aware of any and all data that pertains to oil production and consumption that might not be tainted.

I've suggested looking at asphalt and bunker fuel as canaries in the coal mine if you will.

Be creative think about it. Another one I've brought up for example is sulfur production its dirt cheap but its become increasingly expensive dirt and went through its own major price spike. This was roundly dismissed because the world is not "running out" of sulfur however that not the point the point is pricing pressure at all on sulfur is a HUGE red flag and most of the worlds sulfur is produced from oil and natural gas. For there to be any pricing pressure on sulfur you would have had to have a serious decline in one of its major sources. Well NG is not yet in steep decline that leaves oil. I posted and people did not really get it perhaps since I was more concerned about a future world with low oil NG production and its implication on sulfur. No oil no sulfur no industry period. No EV's nada nothing.

But back on track my point is plenty of secondary indicators exist find them post them and watch them.

I've looked at a bunch and sulfur and CO2 are fundamental enough and both say we are well past peak that I'm comfortable in suggesting that the true does not match what we have been told. Find your own pet indicators and debate and follow others.
Follow the money as posted above.
Validate reserve claims vs actual production for fields were this is available and they are well past peak.
Count wells !!!

Almost every single one points towards as I said the truth not matching what we are told. Its not as easy a problem as the housing bubble but its also not impossible.

I suspect that if you try these types of approaches eventually you will turn into a raving lunatic claiming the oil industry is lying its ass off.

Then I'll have a club :)

Brilliant Memmel! I'm off to plant some more beans!

Memmel's theories are interesting, but I find it difficult to follow the logic when he throws statements about data from disparate sources and then extrapolates five steps beyond what he's actually proven. To take just one example, it would be good if he could back up his claims about sulphur with some graphs of price & production, and links to source data. And then see what happens in discussion, to see if reasonable alternative explanations of known facts appear.

Of course, I would be absolutely delighted if Saudi oil production was about to fall off a cliff - provided the rest of the world follows the sort of decline path predicted by more knowledgeable peak oilers than I'll ever be. I've said before, and will say again, that the House of Saud is the most evil regime on Earth (can you tell me any other country named after its ruling family?). Having these monsters in charge of a treasury stuffed with so much money, and its custodianship of the Islamic holy sites of Mecca as well, has had incalculable effects on societies around the world.

If Memmel & a couple of other commentators are right and Ghawar collapses in the near future, this will have two very positive effects. Firstly and most immediately, it will be the end of the House of Saud. Their subjects will be livid and their overseas sponsors (both the old ones of Britain & the US, and the ones they're now courting in China & India) will be "very disappointed". We'll then see exactly how thin the base of an absolute monarchy is. And once they're gone (to be replaced, no doubt, by an "Islamic Republic of Arabia", with a lot less oil to play with), some fundamental changes will start filtering through the Islamic world.

Secondly, the world will wake up to the reality of Peak Oil. The collapse of Ghawar will totally explode the credibility of all Cornucopians, who rely on the popular assumption that Saudi Arabia is floating on an inexhaustible supply of oil. Once the truth is out in public and not being covered up by the media & the oil industry, the human race might start turning its abundant energies and intelligence to solving the real problem that it can at last see.

So, while I remain sceptical, I'd love it if Memmel could actually prove his hypothesis.

The collapse of Gawhar will explode a lot more than cornucopian credibilty. The human race will never widely accept the truth about peak oil. The truth is that the peak oil problem has NO SOLUTION, therefore the "abundant energies and intelligence" of which you speak can have no effect whatsoever on the ultimate outcome. Sorry.

To take just one example, it would be good if he could back up his claims about sulfur with some graphs of price & production, and links to source data. And then see what happens in discussion, to see if reasonable alternative explanations of known facts appear.

I tried...

You would have to dig out my original postings on the subject.
More to the point I urge you to do it yourself. You can read about the history of sulfur production its critical role in our economy our current sources of sulfur (oil,ng) and the implications of these sources going away.

Your not going to figure it out by me spoon feeding you how things work you have to do it on your own. Only after you grok that our society has two basic supports oil/ng and sulfur and the oil and sulfur come from the same place can you appreciate the implications
of a world without large quantities of cheap sulfur.

It was not that hard to find these links in the google search on the left.
I've brought the issue up several times.

My degree is in chemistry so when I groked the implications I freaked as the implications of the end of cheap sulfur are even more chilling then the end of oil. Our current civilization has and absolute death sentence hanging over it. No cheap abundant sulfur no large scale economy. And there is no such thing as substitution for and element. Even if we managed to offset the decline in oil we will still be wiped out by this situation. Their simply is no replacement source for sulfur that matches the scale achieved by extracting it from oil no other sulfur source exists that can provide massive quantities of sulfur literally cheaper than dirt.

Of course the ironic part if you read about the history of sulfur and understand its position is the willingness of the governments of the world to first deal with acid rain and then later push through ULSD. I assure you I'm not the only one that understands the role that cheap sulfur plays in the economy. I find that the fact that one of the few "white knight" noble moves by the worlds government to combat pollutions serves to offset declining sulfur production as oil declines very very ironic.

I always kind of wondered why the government was so tough on sulfur yet let so many other issues slide well I can now answer that question. The mixing of localized Nitrogen oxides into the problem clouds the issue however I now consider that secondary.

This is a very good place to start understanding the role and issues surrounding sulfur in the modern world.,9171,805879,00.html

Certainly you need the history before this point but the role of extraction of sulfur from NG and oil in "saving" modern industrial society begins here. Without the influx of large quantities of cheap sulfur we would have never made it to where we are today.

If my conclusion is correct and peak oil is not and event that occurred recently but well in the past then I think its obvious that our society is going to have some serious problems in the near future.

Memmel, the EIA data for oilproduction are generally considered as reliable. How could Peakoil be well in the past ?

Well yes they are very reliable but in the sense that oil industry sponsored research into AGW always shows its not a problem.
Or tobacco sponsored research can never link smoking with cancer.
Subprimed is contained.
Our banking system is sound.
Housing is not in a bubble.
BLS adjustments to unemployment.

Depending on what you mean then yes EIA data is 100% reliable.

Never pass and opportunity to quote Upton Sinclair

"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"

The probability that the EIA will fail to announce the existence of peak oil until well after the fact is close to 100%.
Its safe to take this assumption as a fact.

If so then the fact they have steadily changed their tune over the last several years and esp moved to the "peak demand" bandwagon
is very telling. Just the move from a story of infinite growth alone is a big move.

If I'm right then one would expect the EIA to be the least reliable source for the truth and the most reliable at continuing to try and claim nothing has changed. Thats simply the way these things work and any understanding of history supports this.
Thats why its important to understand the implications behind when these institutions are forced to back down and start becoming more truthful. They only do it under extreme duress after all hope of kicking the can down the road and allowing time to resolve the problem before it needs to be addressed honestly fail.

What the EIA says is almost compeltely useless garbage outside of this bending if you will under the conditions I'm claiming.
Only a truly independent audit could hope to uncover the real situation and yes these happen but only after the truth is obvious.

They are no more relevant to oil than the official US unemployment rate is to the real unemployment rate both can be dismissed for the most part outside of watching the directions or vector of their announcements. Both sets of numbers are flawed in the same way as both organizations will detach their announcements from the underlying truth to make sure they remain reliable.

Thank you for taking the time to write such long, well researched comments.

To say nothing, JM, of the ultimate impact of extending high production rates. It may provide a few years of 'higher' production, and then the depletion rate will be seriously raised as well. Much as the Mexican fields have shown of late.

And, that 2% rate depends on those proven reserves that are "probably way on the optimistic side." Deep doo doo may prove to be a pleasant interlude before the serious fertilizer strikes that rapidly approaching oscillating atmospheric accelarator!




I believe that Memmel is probably correct. The worst proposed scenarios aren't as bad as things will actually get. Carter probably should have declared a national emergency and started another Manhatten style project to address the issue in 1976. I would bet that even if he had, we would eventually say that he hadn't done enough. You see, that's the real problem with our energy conundrum...there is NO POSSIBLE SOLUTION! What we are all experiencing is the front end of a giagantic biological event: a large scale human die-off. It cannot be avoided. It took humans more than 10,000 years, from the time of the first cities till now, to reach this critical juncture. Not one bit of our so called progress was centrally planned. Just clever monkeys aquiring better tricks over evolutionary time. If the physicists are right,(and of course they are), then we are about to experience the end of the growth of the energy base of our civilization. If the biologists are right,(and of course they are), this means that we will very soon see the end of population growth and begin to experience it's inevitable SHARP decline.

The real problem is that human's are just not psychologically capable of dealing with unsolvable problems. It just drives people nuts. We have so many ways to deceive ourselves, to blind ourselves to the obvious reality, that it is really not too surprising that we keep getting it wrong. Memmel is right to point out how we underestimate the scale of all kinds of problems habitually and systematically. Peak oil researchers are subject to the same disability. It's just human nature. In the big picture scheme of things, humans are not smarter than yeast.

from a systems perspective economic and population growth are very similar when looking at their throughputs and feedbacks. This suggests the two systems should react in similar ways when faced with problems. We know that the economic system can and does experience rapid and catastrophic collapse so the potential is also there for something similar happening to population growth.

Memmel, you and I may differ on the future price of oil but we are in complete agreement on this issue. After following Saudi production, and Saudi's actions, their news releases about exploring in the Red Sea and the occasional slip of the tongue by Saudi Officials, I have come to the conclusion that Saudi Arabia is about to drop a bombshell on the world. That bombshell will be that their exports about to start declining dramatically. I don't know what excuse they will use, probably that they cannot find buyers for all their oil.

Saudi Arabia

One challenge for the Saudis in achieving this objective is that their existing fields sustain 5 percent-12 percent annual "decline rates," (according to Aramco Senior Vice President Abdullah Saif, as reported in Petroleum Intelligence Weekly and the International Oil Daily) meaning that the country needs around 500,000-1 million bbl/d in new capacity each year just to compensate.

That statement was made in 2005. They claimed a year later that they had gotten the natural decline rate of 8% down to just over 2% by drilling new MRC wells in those old fields. But I would bet the decline rate is at least 8% in those old wells today. After all, all that was accomplished by all those new wells were that they were able to suck the oil out a lot faster.

Saudi Arabia’s Strategic Energy Initiative

Without “maintain potential” drilling to make up for production, Saudi oil fields would have a natural decline rate of a hypothetical 8%. As Saudi Aramco has an extensive drilling program with a budget running in the billions of dollars, this decline is mitigated to a number close to 2%.

You wrote:

On top of this on my blog I back calculated oil production from atmospheric C02 data and determined a real substantial decline in production over exactly the same period.

Could you give us a link to your blog?

Ron P.


I agree with you that Saudi oil production is about to drop. Do you think the recent price movement of oil might mean that the markets are beginning to sense the same thing? If so, then we can throw out the forecasts that have oil climbing steadily this year and not really spiking hard until 2011. Instead, I think we might have a super spike much sooner. Like starting now.

Naw, price movements have many other things controlling it other than production. We will get higher prices, that has already started to happen, but then those higher prices will knock the economy back down, creating more demand destruction, knocking oil prices back down even as the supply declines.

Ron P.

I agree with you about the stairstep nature of the progression downward. But the last time we had DRAMATICALLY HIGHER prices (a super spike) before the economy was knocked back. What makes it fundamentally different this time around? Sure the economy is more brittle, but the road to depletion is eroding surplus capacity very quickly. On the other hand, what if even a moderate price shock is enough not just to destroy some demand, but to topple the economy altogether? As I see it, this dance of death has two very easy ways to end suddenly and only one impossibly delicate way to keep the music playing all the way down. At some point the two dancers (a reasonable oil price and a functioning economy) must part company, and forever go their separate ways. Oil up, economy down. I think that will be a lot sooner than most people think. Hopefully I'm just wrong.

Last time the economy was booming. And there is always a lag time. The suddenness of the spike, just a few months, and the robust economy allowed the prices to spike much higher than they normally would before the economy got knocked for a loop.

This time the economy is already in the dumps. If prices get above $100 that will be enough. In fact I would be very surprised if they get that high again, in today's dollars that is.

However there could be a huge spike in prices if something very dramatic happens. If the spike is sudden enough then prices could go as high as $200. But not for long. The economy would be knocked in the dirt big time from oil prices that high.

And that dramatic something just might be the world learning that those massive OPEC reserves are largely fictitious. Or it could be Saudi announcing that they will never produce more than 9 million barrels per day again because.... they are keeping the oil in the ground for future generations, or something similar.

Ron P.


Thanks for the answer. I agree that a superspike could go as high as $200. I agree that it wouldn't last long either. I believe, however, that that spike is probably inevitable and likely soon. The Saudis might just make an announcement of the kind you suggest. Or Mexico. Or Canada. Even a very small producer would have a big impact on the price of oil. I remember Jay Hanson had a ficticious possible future senario that had Norway making such an announcement. In his story they do it just to wake the world up. In the real world someone will do it when it is advantageous strategically and when the rest of the world is so stressed that they are powerless to stop it.

I'm not sure that something so dramatic would have to happen for us to have a killer price spike, though. The black swans are everywhere all at once these days. Matthew Simmons seems to think that a big spike is possible (likely?) too.

I don't think we will see a price spike this time around. A spike means a sharp rise in prices followed by a fall. For this to happen something else in the economy has to give. The first time around it was a mix of the housing bubble and financial bubble. Outside of their other problems bubbles actually do provide one benefit when they pop they give the economy breathing room.

We are in the last bubble possible which is the Sovereign borrowing bubble. This one is un-popable in the sense that when it goes there is nothing left. So we are in a sort of infinite force, immovable object scenario now. Nothing can give.

So this time around I expect oil prices to simply move relentlessly up until the system collapses this is quite different from a bubble.

You can think of oil as the weapon used to commit murder but the actual cause of death is not the weapon its the results. Massive heart attack from a bullet lodged in the heart, Blunt trauma to the head, Bleeding out from a slit jugular.

Thus the cause of death if you will will be Sovereign default and collapse of the associated governments and fiat currencies. I don't think the cause of death is and issue the only question is the nature of the instrument used to commit the murder.

Certainly many other potential murder weapons exist today however oil is the one thats inescapable becuase of its fundamental role.
A fiat based economy where everyone is willing and able to look the other way to keep the game going probably can only be taken out by a fundamental blow all others can be solved by massive expansion of debt and follow on inflation.

Thus I think oil will be the murder weapon simply because no other potential weapon can actually kill the beast or multi-headed hydra if you will.

If you accept that then the question falls down to what form it takes. Its already tried being a spike to the heart and that wounded yes but did not kill. The probability is the next approach will be different.

I'm going with sort of combo of a slit throat followed by strangling the victim as he bleeds out.

So a rapid and relentless rise in oil prices first they go up fairly rapidly but then they go well beyond what anyone thinks is possible as everyone expects a spike. So at first the oil weapon will look like the spike or knife attack that we already survived so people will be worried but not scared but then it evolves into a strangulating high and relentlessly climbing price situatation as the back side of the expected spike never arrives.

This evolution if you will is actually a result of the victim struggling in the case its governments piling on insane levels of debt to prevent collapse the more they avert collapse the higher oil goes. So its even more macabre than it looks as the actual final cause of death depends on the active participation of the victim to occur. Effectively its basically deciding to commit suicide while someone is trying to murder you. A messed up ending to a messed up world.


I think we are in fairly good agreement about the shape of things to come. I don't necessarily think we will need a super spike in oil prices to end the world. After the drop from the last spike, oil prices rebounded at a faster rate than they had at the beginning of the spike itself. I'm not sure of the exact production numbers, but as I understand it, after the demand destruction from the big spike, we began using only about two million barrels a day less than before. I'm pretty sure that daily consumtion has been rising since that initial drop. As production numbers creep up slowly we begin to face price pressure again. Very recently the tension has started to intensify, with oil beginning to rise noticeably faster and the stockmarkets (proxy for the economy) beginning what will probably be their terminal slide. Immoveable object meets irresistable force.

How will it all end? Markets are far more chaotic than most people appreciate. I think the tension will continue to build until we have a horrible oil price spike that wipes out the entire economy. Or we have a terrible economic crash anyway just from the continued stress, like you suggest. I think a big warning sign will be when we begin to see oil rise while the stockmarket falls on a ongoing, daily basis. Once that condition prevails, the markets could crash almost immediately as anyone with any sense bails on a loosing game. So it doesn't really matter whether we have a big spike or not, the outcome is much the same. I guess my main point is that I don't think we will have to wait too much longer to find out. The most recent rise in oil prices (last 3 weeks) could easily morph into a super spike. Also the most recent decline in stock prices could easily morph into a killer crash. If oil prices rise again significantly next week, we may find ourselves in the zone much sooner than most would believe possible.

I think a big warning sign will be when we begin to see oil rise while the stockmarket falls on a ongoing, daily basis. Once that condition prevails, the markets could crash almost immediately as anyone with any sense bails on a loosing game. So it doesn't really matter whether we have a big spike or not, the outcome is much the same.

Thats exactly my conclusion also. Associated with this is rising interest rates. So when you see falling market, rising oil prices and rising interest rates then your rapidly approaching the end.

Any other combo is escapable at least for a while. The rising interest rate part is important because its recognition that the only resolution to the Sovereign debt crisis is hyperinflation or default. It closes the spigot on the government of course to late but once the door is closed its closed. The falling market is recognition that credit has failed and that massive over capacity will exist effectively forever for a world living within its means. And last but not least rising oil prices block attempts at expanding demand.

Only when the situation deteriorates to the point that all three are true is there no way out. We are of course not quite there yet however the possibility is steadily increasing. Eventually the US government will borrow enough money that interest rates are driven up as people finally accept that the ability for the US to pay is remote. Already the debt load is high enough that if they do go up then we cannot repay our debt therefore they will be driven higher.

This is a fantastic article on the issue.

You can see that we are already toast unless we get a miraculous recovery. So the interest rate gambit or position is already in places its really simply a matter of time until outright default is triggered. Its a done deal outside of when it actually happens.

Oil seems to have gone up progressively so barring some unseen event it seems to be already on course.

This of course leaves only the stock market and divergence between the market and oil. So your holding the last nail for the coffin so to speak. This probably set up conditions to send gold skyrocketing however one has to consider that that is a monetary issue and can be dealt with fairly easily. It certainly will get very interesting between the gold bugs an the CB's.

But also recognize that we are talking about a huge increase in volatility as fiat wealth goes careening around the planet. We literally simply don't need a fraction of our current fiat wealth much less the debt. The post collapse economy would have a tiny fraction of the notational and real wealth that exists today.

With everything the absolute contraction of the system distorts how things work. One one hand debt default and deflation is destroying huge amounts of notational wealth backed by debt on the other hand cash is in huge excess vs any possible investment that yield a return. So you have a paradox of not enough money and way way to much.

The trifecta occurs when the wealth or real dollars simply gives up and moves to cash positions as the only viable position. All possible investments are losers therefore holding cash is the only possible investment. At this point the currency used to simply keep your cash in becomes a major issue and you get extreme volatility in the forex markets couple that with interest rates moving sharply and you can imagine the chaos.

Many people recognize that the stock market is pretty insane already with crazy valuations. I think this problem of cash with no place to go is the primary driver right now. As long as this excess cash puts pressure on the market the market will remain elevated.
This is why the follow on market crash to a bear market rally is so devastating because its caused by wealth simply giving up on investment period and attempting to hunker down by moving to cash.

And last but not least in the big picture this is the final outcome of the deeper underlying problem of concentration of wealth.
As the system approaches its collapse point the top players have taken all the money they won but in doing so they also eliminated all possible investment opportunities having gutted and ravaged the economy in the process not to mention leaving it heavily in debt.
Thus just as they take all the money they also lose it all as they are unwilling to redistribute their hard won wealth to restart the economy again. They fail to realize that in having won the battle they lost the real war. In fact this "sloshing" of concentrated capitol around the world does a very good job of masking the true state of affairs even after the debt bubble bursts. There is plenty of money to buy existing assets for pennies on the dollar if you will. At first people think they are buying cheap and will be even wealthier when things turn around. However most assets not even money have zero value. Crazy to think that money itself can lose all value but lets say you have 100 dollars and the store only has five loaves of bread for sale. Say five dollars a piece. You can pay 25 dollars or 100 dollars it makes no difference as there simply are no more loaves of bread to buy. And of course no reason to sell as what would you do with the money :)

Thats the paradox of absolute system wide contraction and I think its playing out right now. A lot of people are still focused myopically on debt and debt default or expansion however I think our economy has already moved past this point the eventual default on almost all outstanding debt has already been priced in. Further debt defaults will have surprisingly little effect on the economy.
Mish in particular although a fantastic guy has not yet moved past the fact that defaulting debt now has no real economic consequence.

Primarily of course because the willingness of governments to engage in the end game moral hazard and backstop default ensures that defaults are now of no economic consequence. Everyone assumes and eventual bailout perhaps not of the original parties but eventually the debt will end on some governments balance sheet and the creditors made whole.

With that I think you can see how it feedback into the trifecta death event when even this no longer works.

And last but not least I think you see why oil is important as if oil prices remained low then money could flow into more economic expansion and the party start again regardless of how insane things get if we could restart some growth no matter how meager we could blow one more bubble leveraging the hell out of the meager growth via renewed credit expansion. It does not matter if it takes 100 dollars of debt for 1 dollar of growth fine inflation can always rebalance. However high oil prices ensure that its no longer possible to create any intrinsic growth regardless of how much money you have and thus act like the 100 dollars and five loaves of bread scenario. Thus in the end after everything is said and done its this absolute contraction in intrinsic basic resources esp oil that ensure that no money game on earth can change the situation.

And last but not least don't worry about debt and defaults that not where the game is now playing out they literally don't matter anyone that was trying to use debt is already out of the game they just don't know it yet as we now have way way to many all cash players.


Great post. That all really makes a lot of sense. The collapse is a massive state flip of a complex, nonlinear, adaptive system. It cannot go slow; instead it must race to a new lower level to redress the energy imbalance. Once the process is rolling, it will take on a life of it's own. And there is simply nothing that can be done to stop it. Thanks for the link as well.

Once the process is rolling, it will take on a life of it's own. And there is simply nothing that can be done to stop it.

I've gotten a bit of grief in this thread but your response is why I continue to post. As people recognize there is nothing we really can do about it and just accept it and do the best you can then it turns out you happen to pick the best solution.

To slightly change the topic observer1 (don) and I where discussing markets complexity etc and he is the guru not me.

One of us made the point that its like hunting prey you cannot capture a market with science no matter how good a hunter you are
the winds of fate and chance simply play to big a role because of the underlying complexity. The outcome simply is not predictable.

But the expert hunter more often than not bags his prey. How ?
Well he actually cannot explain it as its not expressible.

I've hunted Saudi Arabia in this sense and bagged them. All I know to do is explain how to follow my trail I cannot prove I bagged them. However if you choose to follow the trail and the signs and hunt yourself you will find at the end a rotting elephant carcass with the ivory horns sawn off and taken long ago.

Thats what I found when my hunt ended and if you take the same path you will find the same carcass as there is only one.

People don't understand and I don't know how to explain but if you know anything about hunting fishing or even searching for edible mushrooms or finding a lost item in your house then you will understand the process. Asserting that it must pass some arbitrary set of rules is like saying you can only find that lost gadget in a certain prescribed way.
How is not important its the result of the search.

This is where and how my approach and the "traditional" approach part ways I don't care what tools I employ in my hunt as long as they work and are reliable I'll use them even leaps of intuition are viable as long as the resolve into a cohesive solution. I cannot prove the leaps but if you follow the trail then you will see how the coalesce into the solution and the leaps are not leaps at all rather obviously the correct choice.

Now that I found the fetid remains that are the result of my hunt all I have to say is its here and this is the route I took to get here your free to choose your own given the stench I'm fairly certain you will rapidly find it esp with a bit of help.

Check out my blog its now in my bio and posted on this thread I think. Once peope get over the outcome the real shit happened long long ago back in the 1980's with Regan. The dirt is not now but back then. We never did drop our oil consumption and Saudi Arabia never cut to under 4mbpd thats actually the big one not whats happening today but what happened after Carter. Thats when the now dead carcass called Saudi Arabia developed a serious case of gangrene. Everything happened back then it just took time for the end game to play out.

Many things that happen during the 1980's where completely fabricated it turns out the truth is entirely different.

Volcker was chairman of the Federal reserve during this period once you realize this and realize Obama called him back then you know the real truth. People who don't know what really happened have no clue about the importance of Volcker is.

Paul Adolph Volcker is not helping Obama fight the onset of massive stagflation we are obviously in the midst of extreme deflation his role is far far more important and far more ominous. Once you follow the trail to the kill you will realize and understand the implications. Until you do you have absolutely know idea how important this one man is. I did not until I worked everything out.

Once I did ...

memmel...I for one enjoy the breadth and thought-provokedness of your posts, but seriously, you need to slow down or your brain will burst. I'm only half kidding here, but I wonder how can you be so prolific sometimes. Don't take this as criticism...just amazement.


Please don't ever stop the rant. This has been something of an epiphany for me as well. I'm starting to understand what it is that makes people so determined not to acknowlege the obvious. Fear. Not the fear of the pain and suffering that is an inevitable byproduct an apocalyptic event. That's definitely a real feeling that comes with the territory, but that feeling is more aptly described as dread. No, the fear I'm talking about is the fear we are forced to live with every day. The fear of each other. We are social animals. We live our lives in constant need of acceptance by the group. What we fear most is exclusion from the group. When I first stumbled across the website in 2005, I was stunned. It took me all of about 45 minutes to run through and eliminate all the possible proposed solutions to the energy problem in my mind. It seemed SO obvious. I figured that I'd better tell everyone I know. Big mistake. People will instinctively begin to move away from any individual who expresses serious lack of faith in the collective effort. The individual will come to be seen as an outsider. This is the scapegoat mechanism in action. Social conformity is just baked into the system. This causes what looks to me like a kind of willful blindness. Irresistable. I took the bait and railed against the ignorance. After a while (as in years) I finally began to lose my frustration with trying to change people's minds and instead I reached a kind of acceptance of the fact that people really just don't want to know. But poking holes in the fetid, rapidly decaying corpses of our most cherished belief systems turns out to be a hell of a lot of fun. And a really decent science experiment too. The end of our world presents an amazing oppportunity. It opens a window into the deepest inner workings of the human mind. Our last chance to truely understand ourselves and our place in the universe. One of the original meanings of the word apocalypse is the lifting of the veil. The end of all illusions. It is only when the system begins to break down that we can really see how everything works. Here's to exciting times ahead. Keep up the good work.

PS---I've been reading this site regularly for about five years. Two weeks ago I registered and joined the conversation. Two things:
1. I'm very glad I finally worked up the nerve. This is very intellectually stimulating and everyone should very proud of the good work accomplished here.
2. If, after five years on the sidelines, I find myself suddenly compelled to jump into the fray, something is definitely up. I don't know exactly how I know, but...

It's that Peak Oil "Spidey-sense" you get after 5 years of reading comments.

Thanks !

And don't stay on the sidelines.

I suggest if you have the time that you take a hard look at the late 1970's/1980's. Also read my blog its in my bio.

The crap started way back then with Volcker, Regan and the Saudi's.

Not only did the Saudi's not cut back because of the oil glut they where the source of the glut. And Americans did not cut back on oil usage in fact it surged during the early 1980's later on with the CAFE standards and of course a steady move off oil for industrial use and expansion of NG the Saudi's pulled back and indeed conservation actually worked. But it took time to transition several years in fact. There simply was no sudden drop in consumption.

More interesting and the part I don't fully understand is the games Volcker played. Just like now the sudden spike in oil prices was deflationary not inflationary as demand for debt had to decrease as more income was spent on oil products. He is a brillant man and claimed inflation was happening. However we where in the midst of Austrain school deflation. As far as I can tell his gambit was brilliant he raised interest rates recapitalization the banks and spurring them to lend igniting inflation not fighting it as claimed.

What important is Americans went on a debt bing despite the high interest rates.

This post is ok and at least the author thinks outside the box.

So much happened that its confusing as hell to try to figure it out. I think like today all kinds of tricks where tried and they probably don't know what actually worked. In any case in my opinion our "modern" era really starts in what was done at this time.

Here I give Mish a bit of grief and what do you know he reads my mind.

So the fact that cash is piling up with no place to go has some supporting facts.

Thanks for this excellent posting Joules,

what I am puzzled about is the strange water / oil relation:
Oil production, MBD 300
Water injection, MBD 560

In a conventional oil play with water injection als a secondary Secondary recovery measure this should correspond to a water cut of about 50%.

However Saleri states that

"the field is maintaining its production capacity at 300,000 bpd, at virtually no water production, at virtually no water production"

This roughly goes in line with Saleri's graph:

horizontal wells

The effect of "smart wells" according to Saleri.

This performance should be quite similar to what is achieved with normal horizontal wells, which have a low water cut for quite a while - until when the water table reaches the level of the horizontal well - causing a rapid increase of the water cut, which means a quick drop of the oil production. This is what the graph does not show (which may happen after the 15 years, if not earlier)!

horizontal wells

A so called MRC well from Saleri's article, which is obviously horizontal.
(BTW: Does anyone know what is so "smart" about these wells?

Now the miracle is that more water is being injected than oil pumped out.
So where does the water go???

So I suspect that either the injection/production numbers are wrong (but I wouldn't know why) or it is not true that the statement "virtually no water production" is not true.

Interestingly, Saleri already admits:

"The principal sub-surface challenges and their pre-project risks (premature water breakthrough, loss of oil production, high-decline rates) were for the most part managed."

In a de-biased form from PR-speak this sentence probably means that these are really serious issues.

Does anyone know what is so "smart" about these wells?

I believe that it is a reference to the monitoring equipment that stops or slows water injection so as to reduce water cut. This would decrease overall flow, but increase quality. Interestingly, it may also prolong life of the wellhead, IMO.


Closing the loop on intelligent completions - Offshore

Data acquisition and wellbore control are merged in the latest generation systems. This combination makes it possible to manage day-to-day operations with real-time reservoir models and to act on this wealth of well data to open, close, or choke individual well intervals to improve field-wide benefits.

Middle East management

In 2007, the Haradh-III development in the giant Ghawar field in Saudi Arabia led the industry in its application of advanced drilling techniques, multilateral wells, intelligent completions, and permanent monitoring systems.

The intelligent fields concept was incorporated to continuously monitor key reservoir parameters and real-time data transmission from downhole to the desktop. The surface infrastructure was designed with the communication and power facilities required to connect all the wells to the field SCADA. The field communication infrastructure was on an open architecture to integrate the well controls as an independent subsystem to the field control system.

The field was developed with 32 54 [ed.] maximum reservoir contact (MRC) multilateral wells with intelligent completions on 28 wells. This reduced the well count required while achieving higher productivity from each well.

Studies show a resulting delay in water encroachment and improved flood front conformance and recovery, with lower water production and reduced opex.

Edited that for them in one spot.

Thanks. Dated Sept. 1, 2009.

We probably can't expect Haliburton to come clean, but I'll help to give them a head start:

The field was developed with 32 maximum reservoir contact (MRC) multilateral wells with intelligent completions on 28 wells. However, it soon became clear that, because of _______________, this was insufficient. So, we put in several extra-intelligent ones.

What is this, Moore's Law? Sounds like these things already do everything short of your taxes.

Just finished a book on "The Nanotech Pioneers" and recall reading about some nanosurfactant. Maybe in a few years they'll be able to just molecularly disassemble the reservoir rock.

Got quite a technoptimist buzz from that book, too. You go, Craig Venter! Although his March '08 goal of 18 months to oil pooping bacteria unceremoniously went by last fall.

Well pre-installed down hole cutoffs.

Digging more for the actual cutoff stuff.

Basically you pre install a cutoff and I assume measure water cut in each branch if you detect water breakthrough you
either choke or cut off the offending branch. Note you don't have to cut it off completely just reduce overall water cut
down to what your GOSP was designed to handle. Say for example you have a branch with a 70% water cut well you just have
to choke it to get overall cut down to say 30% or 50% or whatever your design is.

One has to image that the GOSP is designed to handle something closer to the final expected water cut in the field say at least 30% to 50% or something like that. I can't imagine that the ability to handle some sort of reasonably high water cut was not part of the original design.

I was not able to find any reference to the actual specs for the GOSP itself as far as to its maximum water separation capacity.

Suffice it to say unless the project is a complete disaster which seems to be the claim of this paper early in the life of the field even if there are some problematic wells water cut should not be a major problem.

Certainly the move to smart wells is a good way to handle the notorious super-K fracture problem that seems endemic in Ghawar were you hit problematic channels.

According to this article water does not even exist :)

But it gives you some idea about the GOSP's.

I'm not saying that these are not challenges however I don't agree with the conclusion that the increase in well count is from problems with water. Indeed as one of the papers mentions these projects span decades with a tremendous amount of engineering going into their development. Certainly the almost panic like addition of more wells is the result of something very serious happening however I don't think its problems endemic to the projects themselves. Ghawar's Super-K problem has been and issue forever and despite this the Saudi's have produced a substantial amount of oil from the field it is the largest one in the world or at least was :)

Given the production history of the field itself I have to seriously question the assumption that water in a new development increment is causing a technical disaster. And of course given water cut problems in older parts of the field one has to imagine that the GOSP was probably designed with even more water handling capacity then in older ones.

Given the number of additional wells if your claiming water is a problem then the original wells would have to have horrible problems to the point that they are difficult to handle at the GOSP designed for a higher eventual water cut. Now I can't quite see how drilling a lot of additional wells just as likely to have their own problems would solve this. Its like creating two problematic wells instead of one. And this would be and engineering boondoggle of the century and plenty of contractors are involved. I've not heard repeated rumors of serious problems of the magnitude suggested. We do get periodic rumors that Ghawar production is declining however.

If you read my posts you will see I believe very little that comes out of Saudi Arabia probably count the facts I'm willing to believe on one hand :)

1.) I believe that they do practice well rotation letting well rest for significant periods preventing or reducing water coning issues esp for horizontal wells.
2.) Given the above practice their real daily production rates are significantly lower than maximum capacity.
3.) If forced they can and will stop well rotation and produce full bore leading of course to serious problems later from bypassed oil to water.
4.) They have done 3 on several occasions and suffered the results.
5.) In addition I think they maintain on average about 500kbd of longer term swing capacity perhaps less but given their production levels and the need to maintain the infrastructure some sort of reserve to smooth production is almost a must.

6.) Absolutely all out for 30-60 days they might still do and additional 1mbd but they would pay dearly with coned wells bypassed oil and all kinds of problems damage to the reservoir itself etc. Yes they can commit suicide if they want to prove they have spare capacity.

7.) They are very technically competent underlying the propaganda you are dealing with one of the top oil producers in the world in decline or not and it has been for decades so I don't question their technical competence simply that their real problems are obscured.

So certainly there is some truth in what they say and even I'm not claiming it does not exist. The key however is to try your best to figure out whats true and whats fiction. Given how long Ghawar has been produced and all the data we have a lot of it coming from this series and a few related on the oil drum I'd argue that the evidence is in favor of serious declines in the older sections of the field with and attempt to expand production in the newer Haradh increments with additional wells. The price of oil suggests that this is not working out too well (pun intended).

Memmel, thanks a lot for your insightful comment!

I don't agree at your final remark:

The price of oil suggests that this is not working out too well

No. The common rule that the price depends on the demand/supply relation only applies to a free market regime. But this is not the case with oil, as 0PEC meanwhile has re-gained its monopoly (= cartel) position (even the IEA admits that there are only 3 non-Opec countries left that can increase their production). Supposing that the IEA is still on the optimistic side we can assume that Opec is already keeping the rest of the world in check concerning the price of oil.
And the price regime in a cartel world is fundamentally different. It can rather be compared to the market of a drug dealer:
1. The drug dealer (= OPEC) knows that his client (here: the oil-addicted world that is too slow to adapt) desperately needs his stuff, so theoretically he could ask a sky-high price for it.
2. On the other hand the dealer knows that the purchase power of his client is limited, and too high prices would eventually kill his client (= cause the world economy to break down).
3. The dealer cannot afford a break down of his client as in turn he depends on his client (e.g. KSA's economy is almost completely based on its oil exports).
4. So although the dealer has the complete power on his client and the prices he has to manage a delicate price/demand equilibrium - if possible by optimizing his revenue without killing his only client (=world economy).

Well think of it this way you have a bakery and your running low flour so you naturally increase our prices.
At first your customers may balk and your scenario holds but lets assume that you continue to run low on flour.
I.e your running out. It really does not matter what happens to your customers as eventually your going to be out
of flour and not have any bread to sell at any price.

And sure at first your customers will bitch and moan and try to cut back but your selling bread not drugs and they have to eat
so they can and will pay what ever price they have too. Eventually of course before you run out of flour you simply don't have
enough for all potential customers at basically any price. No matter what price is used all the customers cannot get the bread
they need. This is and absolute worsening shortage situation and "traditional" market dynamics simply don't apply as its a binary
condition some will get bread some won't does not matter how much money they have simply their position in line.

I'm doing my best to keep this simply but you can see that you fall into the trap of allocation and rationing which distorts the market. Eventually of course your customers sense your on your last load of flour and thats it you get your bread and live a bit longer are don't and you die.

Now KSA is this baker and he knows that he is running out of flour sure he will try and keep his customers happy but he recognizes that his own demise and that of his customers is rapidly approaching. Whats really interesting is in general he tends to continue to do business instead of simply shutting down and absconding with the last load of flour perhaps since he knows if he did his former customers would hunt him down anyway and take it by force.

Regardless this is not really a market situation covered by traditional economics its simply that as you approach the end you might as well act as if everything is normal with some short term issues until its not. However whats important is the perspective of KSA who takes the role of the baker in this scenario obviously they recognize that their own demise is rapidly approaching so they really don't care about their customers. They will do what they can to prevent a panic that resulting in someone attacking them but other then that ...

I think that its important to understand peak oil from the prospective of the producer not just the consumer we are perhaps focused to much on the consumer side while the producers recognize that if anything their position is even more precarious.

Their customers can readily take them out (Iraq) and in general their own citizens once they realize the party is up may also revolt ( KSA, Iran, Venezuela, Nigeria etc etc ). In fact its a pretty safe bet that Iraq is only the first producer that will either be taken over or collapse internally all the others probably will in turn. Indeed several producers will probably collapse before the customer base itself collapses. And example is Nigeria or Mexico or Iran the highest probability is that one or more of these producer countries will collapse or be invaded well before the actual final collapse.

Of course that will only inflame oil prices and speed the cycle and there or other issues that suggest we won't last long but the key point is that its not the customers that will be taken out first when you have multiple bakeries all running low on flour but a few of the bakeries.

In the case of oil of course the customers have a probably foolish hope they can substitute for oil and go on but the producing nations are done regardless no matter what the outcome is.

I'd argue every single oil exporting nation on earth knows this I don't think they are worried about their customers except as potential invaders.

Thus we are now playing a much more fundamental and brutal game thats rapidly devolving to basics.

more water is being injected than oil pumped out.
So where does the water go???

So I suspect that either the injection/production numbers are wrong (but I wouldn't know why) or it is ... that the statement "virtually no water production" is not true.

On the contrary (mild sarconol) Water injected, and then returned is not production - after all, we knew we were pumping it in, so aren't surprised when it comes back.

On the other hand, water in excess of what we pumped in... that would be "water production" (and would probably mean that we were getting water pumped into other fields coming out here)

Simples. ;-)

not sure how sarcastic your mild sarcanol is so here goes:

water production is water produced from oil producing wells without regard to where it comes from.*

now, if you are talking about reservoir voidage, produced water is subtacted from injected water.

the volume occupied by one barrel of water at surface conditions is for practical purposes one barrel at reservoir conditions. one barrel of stock tank oil plus the solution gas contained at reservoir conditions occupies maybe 1.5 barrels(maybe you are already aware of this) but 450 barrels of water would be required to replace 300 barrels of oil at reservoir conditions.

if aramco is increasing pressure, excess water injection would also be necessary.

then there is the factor of water injected into the aquifer as joules burns has discussed in another field(don't recall the name) 17 miles or so east of ghawar.

*more than one technician i have worked with wanted to count make-up water (from water supply wells) with reservoir production.

So you are thinking of a rather "creative bookkeeping" solution of the miracle of the "disappearing injection water"?

This is what came to my mind, too. Such a creative solution might look like this:
Saudi Aramco distinguishes two types of production wells:
a) wells for oil production (which prevent a high water cut due to their intelligent design) and
b) wells mainly for water production (e.g. leaking from Super-K fractures - although I am really not sure if this makes sense hydraulically). The water wells are not included in the official statistics, which might also explain the "surprising" addition of extra wells.

In Saleri's statistics only the production (and water cut) from the official oil wells is counted.

So the inofficial water wells are what the credit default swaps were for the financial markets: They rub up Aramco's "water cut" balance by clandestinely sucking away the "bad" water production and no one notices - except us ;-)

drillo -- I wish there was a simple answer. Such reservoir dynamics can be so complicated that even if we had every bit of KSA data it might be difficult to reconcile. I could offer a number of scenarios that would completely support the numbers tossed out by the KSA. But that wouldn't mean it was true. Sometimes there's a great correlation between injected water vs. produced oil. In other cases there's zero correlation. I once saw an operator inject 500,000 bw and produce 2000 bo. Where did the water go? It moved downdip away from the oil reservoir. Just becaue an engineer makes a Power Point presentation with an arrow showing water moving in a certain direction it doesn't mean the water is going to follow that route. And one can inject 100's of thousands on bw into a formation and produced oil with no water cut. But only for a while. The injected water will help maintain reservoir pressure but as the water leg reaches the perfs the water cut will begin. I don't know the field very well but given its age I find it hard to believe there is no water cut associetd with this new pressure maintenance effort.

i am puzzled by the kinks in the flowlines serving wells identified as oil wells vs gas wells. do you or anyone else know why they put kinks in their oil flowlines ? i'm guessing it has something to do with expansion and contraction of the pipeline with rising and falling temperatures. sort of a knuckle joint, but i don't know.

i am wondering if it is possible that the "gas" wells(permian khuff) are producing a significant amount of condensate with the gas and are thus designed the same as an oil well and treated through the gosp's ?

I've asked the readership about that before. To allow for pipeline expansion (the desert heat) is one answer that was given. But then, why not gas pipelines? Perhaps it is the heat from the oil. But then, why are the water injection lines kinked?

However, the gas pipelines definitely do not feed into the GOSPs; they lead to one of the large gas plants.

thanks for the response. that leads to even more questions.

yes, i understand that the gas wells are connected to the gas plants. but are these "gas" wells necessarily gas producing wells, or possibly gas injection wells ?

it seems that the identity of a well as either oil or gas is based on 1)the kinky path of the flowlines and 2) the connection to either a gosp or gas plant.

a gas/condensate well with a significant volume of condensate could look exactly like an oil well from a birdseye view. gas wells do not necessarily yield the same condensate. so wells in one part of the field could be lean enough to be processed directly through a gas plant and others could require separation of the stock tank condensate before entering the gas plant.

i found these abstracts on ksa gas condensate fields, one for ghawar and one for "yufutsu", a 5k(16,500')depth reservoir:

“Compositional Grading in the Ghawar Khuff Reservoirs”

the abstract states that condensate content decreases with depth( contrary to normal). so I am supposing that condensate wells would be located near the crest of the anticline with injection wells, if any, off-structure.


“Interpretation of the Unusual Fluid Distribution in the Yufutsu Gas-Condensate Field”

I've looked at the wells so much I can tell when they are still drilling them what type they are:

Gas wells are rather distinct, they are all connected to the same pipeline network feeding into the gas plants, and they rarely have kinky pipelines. The difficulty is distinguishing oil wells from water injectors -- that requires seeing what is connected to what.

Gas injectors? I've looked at Shaybah, but I haven't been able to pick them out from amidst the oil wells.

Not that it would be an efficient use of resources, but wouldn't lowering the pressure in the gas transportation system lower the temperature thereby providing some ability to manage / mitigate excessive expansion? No such opportunity would be present in an oil pipeline.

I've asked the readership about that before. To allow for pipeline expansion (the desert heat) is one answer that was given. But then, why not gas pipelines? Perhaps it is the heat from the oil. But then, why are the water injection lines kinked?

Joules, your reply left me a little confused. All long distance steel lines in all climates must have expansion joints, not just oil lines in the desert. The gas lines must have expansion joints also. Were you looking at a photograph of a gas line with no expansion joints? If so would you please post it, or the link?

Curved lines sometime do not have expansion joints in the curve because the line can expand into the curve. But as soon as the line begins to run straight it must have expansion joints.

Ron P.

Great work, Joules!

Your post makes me think that Saudi Arabia's surplus capacity statements are only statements. Saudi Arabia probably has far less surplus capacity. Instead of drilling more wells at Haradh-III they could have simply used some of their claimed surplus capacity unless there wasn't any spare capacity.

Saudi Arabia produced 8.25 mbd in Feb 2010.

In July 2008, I believe that Saudi Arabia produced at full capacity and that the annual extraction rate was high at just over 5%. The average extraction rate from Jan 2005 to Dec 2007 was 4.4%. In Feb 2010, the extraction rate was above average at 4.7%. These extraction rates are based on a URR of 185 Gb which relates to fields in production and excludes static fields such as Manifa as well as fields yet to be discovered.

Saudi Arabia has no more new megaprojects until Manifa originally scheduled for 2013 but has been delayed to 2015.

That means that Saudi Arabia will probably have to drill many more wells at their existing fields, as they have done at Haradh-III, to slow their oil production decline rate.

I assume that Saudi Arabia's production rate will stay about 8.35 mbd to the end of this year. However, in 2011 I believe that the production rate will start to drop based on my assumption that the annual extraction rate will not exceed 5%.

A URR of 185 Gb is assumed for the above chart. If another 25 Gb is added for Manifa, other undeveloped fields and fields yet to be discovered then the very long term production profile is shown below. The near term production rates are not impacted and instead only the long term rates are increased to about 1 mbd in 2080.

Firstly - great espionage works by Joules. Kudos.

In reading your post JB it strikes me that water flooding of Haradh-III maybe is part of a greater scheme.
Knowingly Haradh-III is the farthest south portion of Ghawar and assuming that the overall Ghawar field is most shallow in the middle or further north (dome shaped underground?) it would be smart to start water flooding here.In doing so they get out 'that' local oil here and at the same time they start the final propagating squeeze of the oil from one side of that giant overall Ghawar-play =>> A water-version of that THAI-procedure!?

Secondly- a question for Ace. Btw,interesting posts from you as always.

I'm focused on this info of yours

If another 25 Gb is added for Manifa

but I am not seeing any bulging in your graphs, just small ripples!

Q: Why is that ?
Shouldn't we assume they will do this on a greater scale than .3 mbd a couple of times before 2020?

Because 25 Gb is roughly the same as Norway's URR for oil - now :
Norway rose her offshore-oil-production by 2 mbd over 5 years 1990-95, I know pre_planning/constructions is an issue here- but the offshore situation in the Golf is much better than that of the North sea and looking at the map the Manifa- fields they are much more concentrated than those in the hostile N-sea.

.... or is it just politically decided that Manifia should be slowly developed perhaps ?



Manifa probably has recoverable reserves of about 10 Gb which should be enough to produce 0.9 mbd.

The other 15 Gb was my estimate for fields not yet planned to be developed as shown in the chart below by the oil in place for static fields. Jack Zagar produced this chart for an ASPO 2005 presentation called "Saudi Arabia - Can it Deliver?"

Oil production from these undeveloped fields will help to reduce future decline rates but the 2005 peak is highly unlikely to be exceeded.

Holy Crap, ace!
Is that chart of yours saying that total Saudi reserves will be nearly 80% depleted in ten years?

I guess we're just going to have to get cranking on finding those four to five new Saudi Arabias every year;) Mars, maybe?

the top graph is not going to zero- it's hitting 5 mbd in 2020 according to Ace, which is bad enough IMO.

It's following a trend out to its conclusion, logical or otherwise. As long as KSA maintains actual capacity you'll never get anywhere; for instance, in Dec 2000 they cut production 107.14 kb/d. Extrapolate that trend and they'd have been producing 7234.96 kb/d (all liquids, btw) in Jan '03. Obviously that didn't happen.

Their troughs of production (to reinflate price) have a noticeable frequency; you could compute an average for these and make an estimate as to what level their production should rebound to by such-and-such a date, assuming the capacity is truly in place.

Here is Sam's projection for Saudi net oil exports, from our 2007 paper (the projected 2005-2015 net export decline rate is shown):

The observed Saudi net export decline rate from 2005 to 2008 was 2.7%/year, as annual US oil prices went from $57 to $100 (EIA). This is in marked contrast to the observed Saudi net export rate of increase of 8.3%year from 2002 to 2005, as annual US oil prices went from $27 to $57.

Circa 2005/2006, I started describing the probable impending decline of (North) Ghawar and the certain decline of Cantrarell (the two largest producing fields in the world at the time) as "Two warning beacons heralding the onset of Peak Oil." From 2002 to 2005, combined net oil exports from Saudi Arabia and Mexico went from 8.7 mbpd to 10.8 mbpd (close to one-fourth of total world net oil exports, EIA)--as annual oil prices rose from $26 to $57. But from 2005 to 2008, their combined net oil exports fell from 10.8 mbpd to 9.5 mbpd, a decline of 8%, as annual oil prices went from $57 to $100. This was, IMO, a huge confirmation of the "Warning Beacons" thesis, but our government/finance system can't handle to concept of a finite earth, so these warning beacons continue to be largely ignored.

Saudi Arabia probably has far less surplus capacity. Instead of drilling more wells at Haradh-III they could have simply used some of their claimed surplus capacity unless there wasn't any spare capacity.

ace, one would think so, indeed. And that planned CO2-EOR project in Ghawar and looking for oil under the Red Sea, is that (also) just to increase spare-capacity or anticipating on future economic growth ?

Yep, roflpwnt.

The day before yesterday on the news: "72 years ago the first oil was found in KSA."
That was 3-3-1938. Ghawar was discovered in 1948 and put on stream in 1951, so next year it is 60 years that they get oil from it. Recently memmel published that 50 and 70 years are the numbers that always have been critical for an oilfield and oilproducing regions.

This link came out of the drumbeat.

Any one that critiques my position is free to substitute oil company for all references to the meat packers prove tjhe truth then refute my position.

Mike, your position is highly valued by quite a few people, I believe !
There are brilliant minds on this site, and you are certainly one of them ! From a constant lurker ;-)

memmel - Enjoyed the discourse. Was nice to sit back and play the lurker and let you do all the heavy lifting. Pattern recognition: What we geologist lives and die by. Yes...lots of computers and high tech seismic. Lots of numerical analysis. But at the end of the day I like one prospect because it looks like the one I drilled before that worked. Not fool proof of course. But the nature of exploration is that you don't have enough definitive data to draw a solid conclusion. If that information existed then the prospect would have already been drilled. Sound familiar? If defintive KSA details were available would we be having a debate about its future oil production? I won't comment as to whether I recognize the same pattern as you. But I've spent a good bit of my 34 years evaluating production acquisitions where the sellers spin their production history. There are common patterns. All in the eye of the beholder, eh?

BTW: speaking of hunting long ago I read of a technique for closing on game. Given typical great eye sight and hearing sneaking up will never be an option. The technique: be a deer. Move across the open as a deer would...slow, cautious but with no attempt to hide. Didn't work very well the first couple of times. But eventually I got it to work at times. Took the better part of an hour but I once crossed 300 yds of corn stubble to close within 50 yds. Caught my scent at the last moment and bolted. But I was so tickled I didn't really care. Pattern recognition: I patterned like a deer and not a predator. You seemed to have learned to pattern yourself. Continued good hunting!

My day job is embedded linux everything from boot loaders through the the apps putting the distro together from scratch using a variety of semi-broken tools. Nothing against opensource of course but its alsway slightly broken esp for arm systems.
My speciality is WebKit based browsers on top. Any its a complex system that can break in mysterious ways. So creative use of a few clues is a must. So I'm used to dealing with all kinds of crazy issues. Thus although its different from what you do I think the underlying skills of handling something thats too complicated to understand all the pieces at any one time is the same.

As far as hunting goes yes I used to hunt but I'm more the fisherman type. I rarely use any sort of detectors. Your technically working blind but your not as you get a feel for where the fish are. Same thing as hunting be the fish. Of course fish are not nearly as intelligent as deer so thinking like a fish is doable even after a few beers :)

I think artists basically combine all of these concepts into one esp sculptors. They deal with a lot of technology and also "hunting" they art they are trying to create. I used to talk with them all the time they actually do a crap load of chemistry in their work and have a lot of knowledge about stuff if you will. I wonder sometimes if really artistic people don't take to art because they can see the patterns in people and they don't want too its no fun. I don't want to generalize but I'd argue artists often don't socialize a lot past a small group of close friends. I think this is because of their nature they can see to much.

Obviously I'm well on my way to "tuning out" if you will one I'm obviously not happy with what we have done two perhaps things will get really really tough and if so one of my preparations is to enjoy the relative peace of the present and not worry about the future. Thats not to say I'm not preparing and being prudent but also at some point in the end enjoying your time on earth no matter how hard it gets is what matters not to the point that you destroy your future but also not putting stuff off that makes great memories.

I brought that up because somehow it fits this additional detachment is a part of the understanding process. I've lived and traveled all over the world and in I think 17 cities in the US in every region so I've been a bit of a gypsy thus never been attached to much to stuff in the first place.

Thanks for your post it means a lot to me I have a lot of respect for you and I've learned a lot from your posts.

My day job is embedded linux everything from boot loaders through the the apps

Can't you find a way to embed some in the vicinity of Saudi Aramco's Intranet :-)

we keep hearing about rising water production in ghawar. there is no way, over the long range, that it can be avoided. how sbout artificial lift ? is there any evidence of artificial lift installations on any wells in ghawar ?

that should be an early warning system. if the situation in ghawar is as bad as some on this board are claiming, evidence of artificial lift installations may be visible.

Yes its almost 5 am in the morning and my bug is fixed so I'm not going to go digging but Saudia Arabia is using artifical lift fairly extensively in some fields I believe parts of Ghawar included. Its been over a year since I read though.

One of the things I do is if I can find the names of the companies that contracted with KSA then you can often go to their website and glean a lot of info about the project and what they did for the Saudi's often with lots of juicy numbers.

Most companies that land contracts in Saudi Arabia treat it as a very big deal and it is for them.

The reason I bring this up is I gleaned all my info on artificial lift off the providing companies website.

But I'm off to bed so ...

yes we have heard about gas lift in abqaiq and submersibles in other applications, but ghawar ?

Artificial lift can mean different things. Water or gas injection are somewhat unnatural, but you probably mean actively pumping oil out from the wellbore. This has not been done in Ghawar to my knowledge, although they have used multiphase pumps on the surface to aid in getting the oil/water to the GOSP.

Elsewhere, gas lift (as opposed to gas injection) is used in several offshore fields, and electric submersible pumps are used in Khurais, Hawtah, and also some offshore fields.