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Wikileaks - Saudis Cannot Pump Enough Oil To Hold Prices Down; Reserves Overstated By 40%

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hatrack Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-09-11 09:48 AM
Original message
Wikileaks - Saudis Cannot Pump Enough Oil To Hold Prices Down; Reserves Overstated By 40%
Edited on Wed Feb-09-11 09:48 AM by hatrack
EDIT

However, Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, met the US consul general in Riyadh in November 2007 and told the US diplomat that Aramco's 12.5m barrel-a-day capacity needed to keep a lid on prices could not be reached.

According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then possibly as early as 2012 global oil production would have hit its highest point. This crunch point is known as "peak oil".

Husseini said that at that point Aramco would not be able to stop the rise of global oil prices because the Saudi energy industry had overstated its recoverable reserves to spur foreign investment. He argued that Aramco had badly underestimated the time needed to bring new oil on tap.

One cable said: "According to al-Husseini, the crux of the issue is twofold. First, it is possible that Saudi reserves are not as bountiful as sometimes described, and the timeline for their production not as unrestrained as Aramco and energy optimists would like to portray." It went on: "In a presentation, Abdallah al-Saif, current Aramco senior vice-president for exploration, reported that Aramco has 716bn barrels of total reserves, of which 51% are recoverable, and that in 20 years Aramco will have 900bn barrels of reserves.

EDIT

http://www.guardian.co.uk/business/2011/feb/08/saudi-oi...
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poopfuel Donating Member (228 posts) Send PM | Profile | Ignore Wed Feb-09-11 09:49 AM
Response to Original message
1. Whoa! n/t
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ZombieHorde Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-09-11 09:51 AM
Response to Original message
2. Interesting. nt
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hobbit709 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-09-11 09:57 AM
Response to Original message
3. The Seven Sisters have always lied about how much oil they had.
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GliderGuider Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-09-11 11:23 AM
Response to Original message
4. Finally, a bit of truth on the topic.
And a good estimate of 2012 as well. That's probably when we'll be able to tell that we've rolled off the production plateau we've been on for the last 6 years, and start picking up downhill speed.
Bravo Wikileaks! :yourock:
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NickB79 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-09-11 12:18 PM
Response to Original message
5. Ah crap
The ghost of Matt Simmons strikes from beyond the grave!
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Finishline42 Donating Member (167 posts) Send PM | Profile | Ignore Wed Feb-09-11 01:51 PM
Response to Original message
6. OPEC reserves
If you look at the reserves of the OPEC countries, there was a large increase after a rule was passed that restricted exports based on a percentage of reserves. Refer to the link below and the dramatic rise in reported reserves in the mid 1980's

http://gantdaily.com/2010/10/21/those-supposedly-balloo... /

First, OPEC countries which include Iraq, Iran and Kuwait are on the honor system when it comes to reporting their reserves. There is no independent audit to confirm whether their reported reserves are accurate or not.

Second, OPEC nations sell their oil according to quotas, which are based partially on their reported reserves. The more reserves a nation reports, the more oil it is allowed to sell. This particular quota system went into effect in the 1980s, and almost immediately all OPEC nations oil reserves jumped significantly. These nations have a direct, vested interest in exaggerating their reserves, not only to make more money, but because petroleum income directly translates into regional power. The chart below is well known to those who follow peak oil issues, but everyone should be aware of how this works when OPEC countries start announcing big new finds or growth in existing reserves.

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pscot Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-09-11 01:53 PM
Response to Original message
7. Wasn't that the central thesis
of Matt Simmons Twilight in the Desert?
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hatrack Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-09-11 01:56 PM
Response to Reply #7
8. Yep, that was really the guts of the book - blow-by-blow on big field structures . . .
And a fair amount of attention to massive upward revision in the late 1980s of "proven" reserves.
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GliderGuider Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-09-11 03:25 PM
Response to Original message
9. It explains what's happening to their net exports
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CRH Donating Member (671 posts) Send PM | Profile | Ignore Wed Feb-09-11 07:55 PM
Response to Original message
10. Todays New York Times environmental blog, ...

http://green.blogs.nytimes.com/2010/11/14/is-peak-oil-b...

~~ snip ~~

Thats the conclusion of the International Energy Agency, the Paris-based organization that provides energy analysis to 28 industrialized nations. According to a projection in the agencys latest annual report, released last week, production of conventional crude oil the black liquid stuff that rigs pump out of the ground probably topped out for good in 2006, at about 70 million barrels a day. Production from currently producing oil fields will drop sharply in coming decades, the report suggests.

The agency does not see energy doom on the horizon, however. By its estimation, after a short dip in production, crude production will reach an undulating plateau of about 68 million barrels a day between 2020 and 2035.

~~ snip ~~ end excerpt

The article prattles on about additional demand will be realized by unconventional oil (read tar sands), and increased use of natural gas.

Then it is stated that the I.E.A.'s 2008 report projected production to slowly climb for several more decades.

The best part is, suggesting that an 'undulating plateau' will save us until 2035. But, don't look at the graph at the top of the page. If you do you will quickly find the smoke and mirrors. In light blue a sliver appears that is labeled, 'crude oil fields yet to be developed'. This holds us at the 68 million barrels a day plateau until 2015. Then miraculously, the turquoise sliver appears, 'crude oil fields yet to be found'. Without the oil yet to be found, the decline is to near 55 million barrels a day by 2035. The slope is worse if you lessen the effect of yet to be developed fields that are supposed to start helping us immediately.

You need to see this graph, and taken together with all the past 'mis and dis' information, a logical person would buckle up, the ride is about to get bumpy.

For your added pleasure, the next paste is from the same page of the NY Times blog. All of a sudden they might be realizing what a few have been screamin' for over a decade.

From a section headed ... About Green

~~ snip ~~

How are climate change, scarcer resources, population growth and other challenges reshaping society? From science to business to politics to living, our reporters track the high-stakes pursuit of a greener globe in a dialogue with experts and readers.

~~ end excerpt ~~

Why am I not receiving comfort from the saying, 'better late than never'.
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happyslug Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Feb-09-11 09:46 PM
Response to Original message
11. Duplicate from Yesterday, February 8, 2011
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