Originally posted by: dmcowen674
Bank Of Montreal says Saudi Arabia Reserve is in irreversible decline
They are injecting water, the fields will be dead very soon :thumbsup:
4-12-2005 Bank says Saudi's top field in decline
"The combination of the news that there's no new Saudi Light coming on stream for the next seven years plus the 27% projected decline from existing fields means Hubbert's Peak has arrived in Saudi Arabia"
Coxe uses the phrase 'Hubbert's Peak' to describe the situation. This refers to the seminal geologist M King Hubbert, who predicted the unavoidable decline of oilfields back in the 1950s.
The Bank of Montreal's analyst Don Coxe, working from their Chicago office, is the first mainstream number-cruncher to say that Gharwar's days are fated.
One factor contributing to the scrutiny the Gharwar field faces is the huge amount of water injection used.
Water is pumped into an ageing oilfield in order to maintain high pressure inside.
Coxe goes on to ask why new Saudi fields, not just ageing ones, are also water injected.
Pumping salt water into a field is standard secondary recovery measure. What matters here is the water cut of Ghawar, the single largest field in the world; it produces more oil than the entire US does in the lower 48. Back in 2002, Ghawar was averaging about 35% water cut, meaning that 1 out of 3 barrels of fluids was the water they pumped in to up the pressure in the field. By upping the pressure, it's easier to get more oil, and plus the oil is lighter than water so it "floats" to the top. I've seen reports by engineers that say Ghawar was up to 55% water, which is very bad for a mature field. It basically means that the field is depleted and will never reach production levels before However, Ghawar isn't just any old field. The latest Aramco presentations say that the water cut is down to the mid 30s range.
Ghawar is damn near its peak. The Saudis themselves say that Ghawar is 48% depleted. If we go by the original Shell geologists, then Ghawar is about 95% depleted (58 billion barrels extracted compared to 60 billion barrels recoverably). Personally, I think hte number will be closer to 80 billion barrels, as Ghawar hasn't really started to decline.
This doesn't touch on the type of oil Ghawar is producing, which is split between Arabian Light (the good stuff), Arabian Medium and Heavy (the not so good). We have a glut of medium and heavy, and they are also harder to distill and to refine. Heavy oil sells for about 12 or so dollars. But the real gauge is light oil, which is responsible for the majority of gasoline. That is what West Texas Intermediate is and what Brent is as well. Light oil are the first fractions that are extracted, because it is light and floats to the top, making it the easiest to extract. Unfortunately, light oil is definately in decline world wide. Medium and heavy are also oils, but we've mainly used them for asphalat and tires. Medium and Heavy oils also usually have a higher sulfur content. This makes it very difficult to refine, because you release sulfur particulates into the air. This is a major component of smog and generally atmospherical malaise.
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