More
following the George Monbiot article...
The
Rest Of The Oil Fields In Saudi Arabia Are Pretty Disappointing
8
July, 2012
From
the viewpoint of those who suggest that there is no problem, the
discussion that swirls over the future of global oil supplies often
seems to focus on the large volumes of oil that still remain in place
around the world. The critical point, however, is not that this oil
exists, but rather the rate at which it can be recovered.
This is
perhaps most obviously pertinent to the discussion of oil coming from
the Bakken formation in North Dakota, where the rapid decline in
individual well performance means that a great many wells must be
developed and remain on line in the out years to sustain any
significant flow past peak. As I noted last week, it is a point that
clearly was missed by Leonardo Maugeri, and equally by George
Monbiot,
who has finally been swayed to the side of the cornucopians, after
years of doubt.
But
the issue of individual well flow rates are an increasingly critical
factor when future oil production in oilfields around the world are
considered, and this holds equally true when the fields in Saudi
Arabia are discussed.
The
history of oil production from Saudi Arabia has largely come from
individual wells that produced in the thousands of barrels a day. In
order to sustain that production over decades, it has been necessary
to ensure that 1) the pressure differential between the well and the
rock are sustained; 2) that the rock has an adequate permeability to
ensure that flow continues at a steady state; 3) that the oil itself
is of relatively low viscocity and is thus able to easily flow
through the rock; and 4) that there is a sufficient thickness and
extent in the reservoir to allow such sustained production.
All
of those factors came together in the giant fields that provided
high levels of production over many decades, most particularly in
the northern segments of Ghawar.
Yet
those conditions are less commonly congruent in the fields that
Aramco must now exploit to address the coming falls in production
from the historic sources.
These “best of the rest” (as the late
Matt Simmons called them) must now increasingly carry the burden of
sustaining Saudi production fail, individually, on differing grounds
from meeting those earlier parameters. Collectively and in the face
of Ghawar’s decline, they will only be able to sustain production
to their original targets and will not provide replacement
production as the oldest and larger begin to fade. I would remind
you of the curve that Euan put up back in 2007.
Figure
1, Euan’s production estimates from 2007.
|
Euan’s
overall estimates for total production have not been met, rather KSA
chose to reduce the volumes that they provided to the world market
in order to sustain a higher price for their product. I would note
that it was their recent production of an increased flow into that
market that provided the cushion for the rest of the world, so that
it can view the current sanctions on Iran (which came into full
force at the beginning of this month) with considerable equanimity –
at least for the next few months. That supply has provided the
backup as Iranian exports are reported to have
already halved.
Now, if supply starts to get tight, it won’t be the fault of the
KSA.
But
in regard to the longer term question of total flow, will KSA
increase their production to the 12 mbd that appears as some magic
figure in the tables of the cornucopians as they look toward the end
of the decade? I think not. Euan’s plot, if perhaps a little
pessimistic over the rate at which Ghawar is declining, is
nevertheless true from an overall perspective of the changes we can
anticipate. Bear in mind that Aramco was only then moving to
increase the size of their drilling fleet from historic levels of
around 20 rigs to as many as 200 in the years since. And it is that
change, with the underlying realities that it implies, that must be
recognized when looking into the future.
As
the largest fields are depleted, so production moves from them to
smaller fields in the region. And as those fields are depleted,
production moves to yet smaller and initially relatively uneconomic
fields that now have value. But to achieve the same production, a
greater number of wells must be drilled, as their individual
production levels and operational lives are now shorter.
The
Kingdom has been building production in a number of different
regions over the past ten years. These have added considerably to
overall Saudi capacity, but even if they are being drawn down at
only 2% p.a. (as has been claimed in the past) slow reduction makes
it more difficult for them to be the source of additional production
to meet any future increase in demand/replacement of depleted
reserves. As I list the fields, remember that when Ghawar‘s
decline becomes evident, these fields are already in production, and
so it must be the smaller fields that lie beneath them in the
hierarchy that will then have to carry the burden.
Qatif has
been producing 500 kbd since 2004, from a field that started with a
projected 6.2 x 31 mile size, with 151 development wells, and an 8.4
billion barrel reserve. Both it and Abu Sa’fah lie near Abqaiq and
Berri.
Abu
Sa’fah, which was expanded at the same time as Qatif to 300 kbd,
is an offshore field that covers 6.2 by 11 miles, and in the
expansion had 90 wells and reserves of 6.1 billion barrels. (Half
the revenue from Abu Sa’fah goes to Bahrain as JoulesBurn
has explained and
that arrangement continues with Bahrain getting the revenue from 150
kbd of oil.)
Figure
2. The location of Qatif and Abu Sa’fah (JoulesBurn)
|
In
2007, Aramco brought 500,000 bpd of Arabian Light onto the market
through the Khursaniyah development. This included the onshore Abu
Hadriya, Harmaliyah, and Fadhili fields, though it first began
production at
a lower volume in 2008.
The associated gas plant ran through some troubles and delays before
coming on line in 2010, and this also
delayed the time over
which the field came up to full production.
Down
at the other end of Ghawar, there are a group of oilfields found
since 1967, including Hawtah and Nuayyim, in the
Central Region.
The group of fields, referred to as the Hawtah Trend or Najd
Fields has
had problems in the past with sand inflow into the wells, and there
is some debate as to whether the reserves in the region total 10
billion or 30 billion barrels of light,
sweet crude. Hawtah itself produces around 150 kbd, but the
associated fields brought this up to 400 kbd.
Nuayyim
came on line with an additional 100
kbd in August 2009
Figure
3. Named Saudi fields, with those coming on line or expanded in
2009 being emphasized. (Energy-pedia)
|
Haradh
has been discussed earlier as part of Ghawar, and the major addition
that came that year was at Khurais, which added 1.2 mbd to supply
potential. Increase in production from Shaybah brought another 250
kbd to the total.
Khurais,
was mapped by JoulesBurn
in 2008,
and it was here that the need for additional drilling rigs became
more evident in getting all the wells brought
on line in
time for the scheduled start of the upgrade. With that completed,
the increase of 1.2 mbd, which actually comes from the three
adjacent fields of Khurais, Abu Jifan and Mazalij, began production
in June 2009.
In
terms of the production of the heavier oils that are taking a
greater portion of the marketable Saudi product, it has been
suggested that KSA has planned to increase production at Zuluf,
which has some 8 billion barrels in reserve, to a capacity of 1.2
mbd from 500 mbd (but
with 200 mbd mothballed).
Up
on the Kuwaiti border lies the Hout oilfield, where work is now
being developed to capture increasing volumes
of natural gas now
flared from the field. This is one of the four fields that the two
countries share, and which includes Khafji, Lulu and
Dorra. Most of the oil goes
to Japan.
Khafji came on line in 1960, and Hout in 1963. The fields have
produced around 4 billion barrels of oil, and are now producing
at around
610 kbd.
Bids for the new development are now due in September.
I
will leave Shaybah and Manifa until next time.
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