Saudi oil propaganda
Saudi Arabia’s Crude Oil Reserves: Particulars or Propaganda?
Posted by ace on June 15, 2008
The Oil Drum
This post originally ran 4 MAR 08, but it seems with the recent discussions about Saudi Arabia and OPEC (for example these pieces by Jad Mouawad and Fatih Birol) that the information in this post, in addition to the over 20 very important and related posts by TOD researchers linked at the bottom of this post in summary, is quite important to the recent discourse.
Furthermore, on 22 JUN 08, Saudi Arabia's Oil Minister Ali Al-Naimi will "convene a meeting of representatives of producer and consumer nations and firms operating in the production, export and trading of oil to discuss the jump in prices, its causes and how to deal with it objectively". Kuwaiti oil analyst Kamel Al-Harami added that this meeting "is an opportunity for a transparent and clear dialogue between producers and consumers to collectively explore solutions to the world's energy crisis, now and in the future". Perhaps there is a chance that Saudi Arabia and other OPEC members will offer some transparency about their oil reserves to the world at this important meeting in one week's time.
Executive Summary
1. Saudi Aramco has effectively used propaganda methods for at least the last fifteen years to convince many governments, corporations and individuals to believe their statements. However, Aramco’s statement that it is the world’s leading oil producer is now false as it now second after Russia since 2006. Nevertheless, Saudi Aramco’s repeated statement about remaining recoverable oil reserves being 260 billion barrels (Gb) is still generally accepted.
2. In 2004, Saudi Aramco stated that its oil initially in place (OIIP) has been growing steadily since 1982. There is considerable doubt about the validity of this increase, given the lack of new oil discoveries and the unusual nature of its steady continuous increase. Aramco stated the OIIP was 700 Gb at year end 2003 while a more realistic estimate is 580 Gb.
3. Aramco may have some high recovery factor fields such as Abqaiq and Shaybah, but an average recovery factor range from 30-37% is assumed for the total OIIP in Saudi Arabia’s fields. The trend of the recovery factor for Saudi Aramco indicates that there has been no effect on the recovery factor by recent technological advances in producing wells. Saudi Aramco has kept remaining recoverable crude oil reserves constant simply by artificially increasing the OIIP each year since 1982, accompanied by an unrealistically high average recovery factor of 52% since 1988.
4. Saudi Aramco’s propaganda campaign is failing. Saudi Aramco is no longer the world’s leading crude oil producer. Saudi Aramco’s statement of 260 billion barrels of remaining recoverable reserves is almost certainly false. Instead, the remaining recoverable crude oil reserves are probably less than 100 Gb, instead of 260 Gb. It is time to call on Saudi Aramco and the other OPEC members to tell the truth about their reserves.
(Continued here.)
Posted by ace on June 15, 2008
The Oil Drum
This post originally ran 4 MAR 08, but it seems with the recent discussions about Saudi Arabia and OPEC (for example these pieces by Jad Mouawad and Fatih Birol) that the information in this post, in addition to the over 20 very important and related posts by TOD researchers linked at the bottom of this post in summary, is quite important to the recent discourse.
Furthermore, on 22 JUN 08, Saudi Arabia's Oil Minister Ali Al-Naimi will "convene a meeting of representatives of producer and consumer nations and firms operating in the production, export and trading of oil to discuss the jump in prices, its causes and how to deal with it objectively". Kuwaiti oil analyst Kamel Al-Harami added that this meeting "is an opportunity for a transparent and clear dialogue between producers and consumers to collectively explore solutions to the world's energy crisis, now and in the future". Perhaps there is a chance that Saudi Arabia and other OPEC members will offer some transparency about their oil reserves to the world at this important meeting in one week's time.
Executive Summary
1. Saudi Aramco has effectively used propaganda methods for at least the last fifteen years to convince many governments, corporations and individuals to believe their statements. However, Aramco’s statement that it is the world’s leading oil producer is now false as it now second after Russia since 2006. Nevertheless, Saudi Aramco’s repeated statement about remaining recoverable oil reserves being 260 billion barrels (Gb) is still generally accepted.
2. In 2004, Saudi Aramco stated that its oil initially in place (OIIP) has been growing steadily since 1982. There is considerable doubt about the validity of this increase, given the lack of new oil discoveries and the unusual nature of its steady continuous increase. Aramco stated the OIIP was 700 Gb at year end 2003 while a more realistic estimate is 580 Gb.
3. Aramco may have some high recovery factor fields such as Abqaiq and Shaybah, but an average recovery factor range from 30-37% is assumed for the total OIIP in Saudi Arabia’s fields. The trend of the recovery factor for Saudi Aramco indicates that there has been no effect on the recovery factor by recent technological advances in producing wells. Saudi Aramco has kept remaining recoverable crude oil reserves constant simply by artificially increasing the OIIP each year since 1982, accompanied by an unrealistically high average recovery factor of 52% since 1988.
4. Saudi Aramco’s propaganda campaign is failing. Saudi Aramco is no longer the world’s leading crude oil producer. Saudi Aramco’s statement of 260 billion barrels of remaining recoverable reserves is almost certainly false. Instead, the remaining recoverable crude oil reserves are probably less than 100 Gb, instead of 260 Gb. It is time to call on Saudi Aramco and the other OPEC members to tell the truth about their reserves.
(Continued here.)
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