Peak Oil: Simmons v. Saudis, Round Two
Neil King in Washington, D.C. reports:
Both Nansen Saleri, former chief of reservoir management at Saudi Aramco, and Houston-based investment banker Matthew Simmons are feeling good these days about the famous–and weighty–debate they held four years ago at Washington’s Center for Strategic and International Studies.
Are Saudi Arabia’s massive oil fields in great shape—or falling apart? Can Saudi Aramco help slake the globe’s soaring energy thirst far into the century—or has that ability already peaked?
Simmons, in his book “Twilight in the Desert” argued that several big Saudi fields, including the massive Ghawar field, were showing signs of serious strain. Their debate before a packed house at CSIS marked an unprecedented moment of openness for the secretive Aramco.
Saleri now says in an interview that time has proven Aramco right. Simmons “was saying four years ago that Ghawar was going to collapse and that Saudi Aramco was going to go into decline….[But] that precipitous decline never occurred,” he says.
Saleri, who left Aramco last year to create his own Houston-based reservoir-management company, insists Ghawar will keep pumping five million barrels a day far into the future. Aramco also managed to revive some other behemoths, like Abqaiq.
“Abqaiq became a renaissance story for Aramco,” he says, insisting that the field’s pressure remains strong and its water content is going down even after more than 60 years in production. Abqaiq “is doing fantastically,” Saleri says.
Simmons, reached by phone in Houston, says he feels equally vindicated—and increasingly alarmed. He based his book largely on information dug up in old technical journals. In recent weeks he has hit the archives again, with thoughts of writing a second book.
What he has found, he says, “is so unbelievably scary you can’t believe it.” He claims that there is mounting technical evidence that Aramco is struggling to deal with increasing volumes of water at its hugest fields. With water production going up, he says, oil production is going down.
“It is absolutely clear as a bell now that all of those fields are heading toward being another Cantarell,” referring to the massive Mexican offshore field, which is now in rapid decline.
So how different are the world views of Simmons and Saleri?
Saleri says he’s convinced technology will help revive aging reservoirs all over the globe, and world oil production won’t hit peak until well after 2050.
Simmons believes we may already have hit that peak. After his recent studies, he now fears he has “grossly underestimated how savage the post-peak oil reality will be.”
I do not believe that Simmons ever claimed that Ghawar would collapse. I think he claimed that Ghawar production was falling faster than the Saudis were admitting.
This would be a non-issue if the Saudis would provide the data, and it is primarily because of the Saudi secrecy that I tend to believe Simmons.
Also, the Saudis are doing an awful lot of drilling for a country that claims to be so awash in oil.
There are more rigs in Mexico. There are more rigs in India. There are nearly as many rigs in egypt. The Saudi’s are certainly doing more drilling than two years ago, but certainly not a lot relative to their production or relative to most other large oil producing countries.
If Simmons is right, the world economy is doomed. So let us embrace conservation and renewables as fast as we possibly can. We will eventually need to do so anyway, and if we do it now, the landing will be softer and the climate less severe…
There are many oil fields that produce alot of water some produce water from day one. This is another example of someone who does not understand the engineering jumping to conclusions. Ghawar is probaly the most studied oil field in the world. I cannot image someone with access old technical papers makeing a valid conclusion. There are a few of my papers I would like to have back.
The truth is you are all, including S and S, a bunch of guessers that have NO idea of what the future holds. So shut the pie hole.
Currently we are only able to get 50% of the fossil fuels out of the ground. New biotechnolgy is in the making which processes unpumped oil in the ground and turns it into methane. This should revolutionalize the industry and increase world-wide reserves.
Also, don’t discount huge new reserves found off-shore.
Simmons, as an investment banker in the oil industry would have a pretty good view of “new technology” looming on the horizon. I think he has stated, more than once, that no such technology has made an appearance. My inclination, based upon past track records and what I’ve seen of these optimistic predictions (and how different the operating regimes would have to be for the optimisitic predictions to bear out) is to go with Simmons on this one.
