Wednesday, March 14, 2007

Could Saudi Arabia Be More Than 70% Depleted?

by Jeffrey J. Brown

Texas and US Lower 48 oil production as a model for Saudi Arabia and the world
by Jeffrey J. Brown & "Khebab"
published on 24 May 2006 by GraphOilogy and the EnergyBulletin.

Matt Simmons, in his excellent book, “Twilight in the Desert”, warned that Saudi Arabia probably has far less recoverable oil reserves than they claim to have. Since Saudi Arabia is the world’s largest oil exporter, it is critical that we understand what their true reserve status is.

The Hubbert Linearization (HL) method gives us a way of estimating the Ultimate Recoverable Reserves (URR) for a region, using historical production. Therefore, we can estimate the URR for a region where accurate recoverable reserve estimates are hard to obtain, for example regions like Saudi Arabia.

In the captioned article, I argued, based on “Khebab’s” technical (HL) work, that Saudi Arabia in 2005 was at the same stage of depletion that the prior swing producer, Texas, peaked, in 1972.

Because we have so much data for Texas, we can get a fairly accurate estimate of URR, probably about 62 billion barrels (Gb), or what I will call Probable URR.

In the article, I noted that Texas peaked in 1972 at 57% of probable URR. Recently, Robert Rapier, on The Oil Drum, has raised some questions about what could have been predicted prior to the Texas peak. As a result of the questions that Robert raised, I have gone back and reexamined the data, and I have come up with some troubling conclusions.

Hubbert Linearization on Texas Oil Production
Hubbert Linearization on Texas Oil Production (Crude oil + condensate).

When I first did a HL plot for Texas, I used the data from 1958 through 2004 to get an estimated URR of 66 Gb. Khebab used a slightly different set of data to get an estimated URR of 62 Gb. In any case, the Texas data show a strong linear pattern from 1958 to 1965, with an inflection from 1966 to 1972, where the plot again showed a strong linear pattern.

Qt is an estimate of URR, based on the HL method. If we focus on Khebab’s HL plot, a linear plot using the 1958 to 1965 data would have given us a Qt that is reasonably close to the Probable URR. However, if we use the 1958 to 1972 data, it would give us a Qt of about 85 Gb, about 37% larger than the Probable URR.

Saudi Arabia has shown a strong linear pattern from 1991 to 2002, with an inflection from 2002 to 2005. If we use the data from 1991 to 2005, it suggests that Qt is approximately 186 Gb.

Hubbert Linearization on Texas OilProduction
Hubbert Linearization on Saudi Arabia (Crude oil + condensate).

However, if we use the Texas model, and discount the recent inflection, which is probably an artifact of the swing producer maximizing production prior to the peak, it suggests that the Saudi Qt is only 150 Gb, which in turn suggests that Saudi Arabia is now over 70% depleted, with about 40 Gb in remaining recoverable reserves. This is approximately one-fourth of the most commonly used estimate of remaining recoverable reserves, and it is a very small fraction of the ultimate possible reserves that the Saudis now claim to have.

Jeffrey J. Brown is an independent petroleum geologist in the Dallas, Texas area.