| During the last two
months we now have seen two articles with alarming news about the production
of crude oil from Kuwait. The first came in November by James Cordahi and
Andy Critchlow at Bloomberg and was entitled: Kuwait Oil Field, World's Second
Largest, 'Exhausted'. A quote from the article:
The plateau in output from the Burgan field will be about 1.7 million barrels
a day, rather than as much as the 2 million a day that engineers had forecast
could be maintained for the rest of the field's 30 to 40 years of life, said
Farouk al-Zanki, the chairman of state-owned Kuwait Oil Co. Kuwait will spend
about $3 billion a year for the next three years to expand output and exports,
three times the recent average.
To boost oil supplies, ``Burgan by itself won't be enough because we've exhausted
that, with its production capability now much lower than what it used to
be,'' al-Zanki said during an interview in his office in Ahmadi, 20 kilometers
south of Kuwait City. ``We tried 2 million barrels a day, we tried 1.9 million,
but 1.7 million is the optimum rate for the facilities and for economics.''
Reuters has just (
) delivered a second alarming message: OPEC producer Kuwait's oil reserves
are only half those officially stated, according to internal Kuwaiti records
seen by industry newsletter Petroleum Intelligence Weekly (PIW). "PIW learns
from sources that Kuwait's actual oil reserves, which are officially stated
at around 99 billion barrels, or close to 10 percent of the global total,
are a good deal lower, according to internal Kuwaiti records," the weekly
PIW reported on Friday. It said that according to data circulated in Kuwait
Oil Co (KOC), the upstream arm of state Kuwait Petroleum Corp, Kuwait's remaining
proven and non-proven oil reserves are about 48 billion barrels. Officials
from KOC were not immediately available for comment to Reuters. PIW said
the official public Kuwaiti figures do not distinguish between proven, probable
and possible reserves. But it said the data it had seen show that of the
current remaining 48 billion barrels of proven and non-proven reserves, only
about 24 billion barrels are so far fully proven -- 15 billion in its biggest
In March 2003 I asked Jean Laherrere about his opinion about the reserves
in Kuwait and this is part of his repaly from March 17, 2003.
From the incomplete scout data the picture of Kuwait oil is as follows.
From the technical data the cumulative discovery of oil +condensate is plotted
versus the cumulative number of New Field Wildcats to give the "creaming curve"
which is modelled with two hyperbolic curves with an ultimate of 100 Gb.
Figure 1: Creaming curve
It shows that the undiscovered potential is small in Kuwait
The cumulative discovery versus time is plotted with the cumulative production
(adding 2 Gb in 1991 as the loss of the fire in the Gulf war), the difference
gives the remaining reserves
Figure 2: cumulative discovery and production,
as remaining reserves
The remaining reserves from the technical data are compared from the political
reserves given on the OPEC site since 1981 which are the data published in
the Oil & Gas Journal (Kuwait + 1/2 Neutral Zone), data which is also
taken as reference by the BP Statistical Review. World Oil is slightly different
Figure 3: remaining reserves from political and technical sources
But if political data and technical data were similar up to 1983, they completely
diverge in 1984 when Kuwait decide to increase its reserves, followed later
in 1990 by Saudi Arabia. But strangely the reserves of the Neutral Zone,
owned half and half by Kuwait and Saudi Arabia did not increase at all its
reserves as the joint owners did no agree about the timing of the increase.
It is a joke to see OGJ data being the same since 1991 at 96.5 Gb as if the
new discoveries were replacing the production even the loss of 2 Gb in the
Gulf war in 1991.
The reported ultimate of the Greater Burgan is 59 Gb but it is difficult
to check the reliability of this estimate as the data are incomplete (stopping
in 1998 for the annual production) and the field production was disturbed
by the constraints on production because quotas, and the Gulf war, and not
yet showing a reliable decline (since its peak in 1972 at 2.4 Mb/d)
to indicate its real ultimate value.
Figure 4: Greater Burgan oil annual production
versus cumulative production
Jean makes today the following comment: The cumulative production of oil
and condensate at end 2004 is about 38 Gb including 2 Gb lost during the
1991 fires. IHS 2005 reports cumulative discovery at 93 Gb, when WM 2005
reports 72 Gb, giving a remaining reserves of 55 or 34 Gb at end 2004. IHS
is usually too high and WM a little too low so 40 Gb seems to be the average.
It is interesting to see that OPEC P reserves estimate was about IHS 2P value
from 1970 to 1984 and obviously Kuwait value jumped in 1985 in the quotas
fight started by Kuwait keeping the remaining value flat when no new discovery
and reserve growth is not justified is obviously wrong. Kuwait seems in fact
to return to the pre 1985 value of cumulative discovery. The creaming curve
shows that there is little hope of new discovery.