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Reply #4: OPEC faces economic disaster. [View All]

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brokensymmetry Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Feb-25-06 05:37 PM
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4. OPEC faces economic disaster.
Oh, they'll get more per barrel, sure; but as depletion worsens, the cost of extraction goes up a bunch. Take Gwahar (hmm...maybe that's the wrong way to put it...). It now has a 55% water cut, as I understand it. So they have to pump 7 million barrels per day of seawater in, and then they must separate the seawater that comes out.

Add to this that the Saudi population, and the costs of supporting that population, have burgeoned.

We like to think of the Middle East as being rich. Some of their leaders are; but the vast majority aren't. In fact, even in Saudi Arabia, there are lots of poor people (Saudi Arabia Exposed : Inside a Kingdom in Crisis (Hardcover)
by John R. Bradley).

So, as oil peaks and their net income declines, I suspect you'll see bloody revolution. Iraq may have lit the fuse to a much greater problem.

Not good....
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