Press release from ASPO, The Association for the Study of Peak Oil&Gas
ASPO and Peak oil theorists challenge Saudi Arabia
Kjell Aleklett, President of ASPO
In Paris, March 2, 2008, Ali al-Naimi, oil minister for the world’s largest crude producer, Saudi Arabia, and one of the oil industry’s most influential figures, has been discussing Peak Oil. He has stated that Saudi Arabia, which already has the world’s biggest proven oil reserves, plans to add another 200 billion barrels of oil to its proven reserves. He said this was “to reassure the world that we are not going to run out of oil in the next five to ten years as peak oil theorists say.” Full story at AFP
So what are the facts behind this claim of an extra 200 billion barrels? According to a seminar given in Washington in 2004 representatives from Saudi Aramco reported that Saudi Arabia had an initial 700 Gb barrels in place. Today, with cumulative production from Saudi standing at 119 Gb and 260 Gb in reserves (but admitting to only 131 Gb in developed reserves), the Saudi’s claim a recovery factor of 54%.
If another 200 Gb of the 700 Gb of oil in place is added to reserves, the recovery factor now increases from a very significant 54% to an incredible 83%. The average global recovery factor to date is only 29%, and even the great expert on the subject Merling of Statoil believes that there is only a possibility of increasing this average number to 38% in the future.
At the 2004 seminar in Washington, Aramco also said that they believe there is an additional 200 Gb of oil in place still to find in Saudi Arabia. Could these be the barrels that minister Ali al-Naimi is talking about? If so, he forgot the recovery factor.
Developed reserves of the order of 130 Gb are used to current underwriting levels of production, but a future production rate of 12.5 Mbps requires developed reserves of the order of 150 Gb, and if production for the last year is of the same order as new projects coming online, developed reserves will simply remain constant. It is the uphill struggle facing the Saudi’s in the coming years; a struggle made even more challenging because they then will have to develop 4.5 Gb every year just to maintain the new rates of production.
If Saudi Aramco were to follow the same rules for classification of reserves as BP, ExxonMobil, and Shell, then their reported reserves would not be 260 Gb but only 130 Gb. Reclassification of reserves on paper will not yield more oil, and if it is true that Saudi Arabia must find 200 Gb in real new reserves in the coming years to prevent Peak Oil, then I would have to say that Peak Oil is here, right now, and not in some unspecified future.