Skip to comments.Oooops! Saudi oil reserves 'overstated by 40%' (Long suspected, now apparently confirmed)
Posted on 02/09/2011 7:52:06 AM PST by SeekAndFind
The US fears that Saudi Arabia, the world's largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.
The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels - nearly 40%.
The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East. Many analysts expect that the Saudis and their Opec cartel partners would pump more oil if rising prices threatened to choke off demand.
However, Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, met the US consul general in Riyadh in November 2007 and told the US diplomat that Aramco's 12.5m barrel-a-day capacity needed to keep a lid on prices could not be reached.
According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then - possibly as early as 2012 - global oil production would have hit its highest point. This crunch point is known as "peak oil".
Husseini said that at that point Aramco would not be able to stop the rise of global oil prices because the Saudi energy industry had overstated its recoverable reserves to spur foreign investment. He argued that Aramco had badly underestimated the time needed to bring new oil on tap.
In other words, if there's a war between Israel and Iran, our goose is cooked. Saudi Arabia will be unable to pump enough oil to materially affect the price of a barrel of oil which could lead to nightmare prices exceeding $300 bbl.
Meanwhile, caribou graze peacefully in ANWR and Gulf oil rigs are being sent elsewhere because we have an administration that is allergic to crude oil. They break out in hives anytime someone mentions drilling.
In other news, solar plants are closing and no new nuclear plants are planned for the foreseeable future.
More BS from the “Peak-Oil” crowd.
...and scare the shiite out of the A-rab Saudis.
That’s how I see it too. The information i this wikileaks document is worth every penny we pay for it.
There is a new line of argument that I take for those who say we should not even start drilling for our reserves until other reserves in other countries are used up:
Let’s say it takes 5 years minimum for new drilling to produce usable stuff. That 5 years is used to set up all of the infrastructure. Would it be smarter to drill NOW and cap off the wells until we want to use them or would it be smarter to wait until the reserves are gone and then begin to drill?
What do you think would happen to the price of gas until the drilling is complete? What would happen to this country’s productivity? It is just insane that we continue to wait to at least begin to drill.
I am not much for tin foil hattery, but this is all starting to have a pattern.
Sweet! Build U.S. oil rigs now so when Saudi oil “runs out” we can rake in HUGE profit$$$!
(Unfortunately, the U.S. gubbermint doesn’t have this sort of sensible mentality.)
And the U.S. supply is probably understated by a factor of three or four.
Because no foreign nationals ever feed self-serving disinformation to State Dept types.
For all of Obama’s jawboning about nuclear, we have exactly 1 plant under construction and it was approved in 2007.
And we have approved government backed financing for 1 reactor in Georgia, which I think is a research facility and not really a power plant.
RE: we have exactly 1 plant under construction and it was approved in 2007.
Where is this plant located?
Yeah, but I think this has a ring of truth to it. It appears to be a confession of a truth western oil experts have long suspected; that the Saudis have pumped out most of what they have.
The Saudis didn’t get a limitless supply, and just like Pennsylvania and Texas, after 3/4 of a century of pumping oil the end is in sight. Now, it’s probably still a long way off; even 60% of what they claimed to have is a lot of oil. The economic problem is that they can no longer bring a daily supply to market to keep the price down.
I would not doubt that this was discussed by George W. Bush the last time he went to grovel before the degenerate Saudi king for more oil back in 2008. The Saudis have enough of an economic stake in America that they didn’t want a collapse like we are going through. If they could avoid it by opening up the faucets a little more, they would have. I think the Saudis told Bush “it’s not that we won’t, it’s that we can’t.” Bush, being a savvy oil man, knew he had to keep that under his hat.
The real problem is that the current regime should know these facts, and isn’t doing anything constructive in our own country. We should be drilling our brains out, building nukes, and converting our plentiful coal into synthetic fuel. But no, our leaders would rather tilt at windmills.
My other take on this is that once Saudi oil production starts to decline, you are going to have some serious political instability in the Kingdom. It will only get worse as time goes by. There is no sustainable economic activity there, thanks to their adherence to their barbaric medieval religion. My guess is that they will run through their oil money, and sell us back all our property (or sell it to the Chinese). In 20 to 25 years, their empire turns back to sand (a prize for anyone who can quote artist and song).
And keep in mind that the Chinese and Japanese get their oil from the middle east (we get more of ours from Canada). Watch them try to open up OUR reserves for their own use.
They’re hiding that oil, Texas oil is being hidden they did not peak in 1973 at 3+mbd and drop to less than 1mbd today because of something stoopid like PO (which is a CIA plot). No sir them resevoirs is filling up as we speak and a huge conspiracy is taking place right before our eyes. Now don’t get me going on the Alaskan North Slope oil conspiracy where they supposedly peaked in 1988 at 2mbd and now down to less than 1mbd. (I think whats her name knows about this but is in on it)
Those resevoirs are filling up faster than we burn it, PO is a giant conspiracy hatched by the NWO and its secret tentacles, I know it I read about it on the internet.
Would god let us run out of oil? I think not.
The GOP needs to start hammering Obama on this. He has talked on and on about “clean energy” and “green jobs”. Oil just hit an all-time high for February and we are in danger of skyrocketing oil prices derailing the economy. He has violated a court order and stopped production in the Gulf. Where is his energy plan? Even if everyone bought electric cars, solar and wind power aren’t enough for the grid. North Dakota is booming because of “oil jobs”. Imagine if we opened up full production here all of the good jobs that would be created. Manufacturing is already mostly dead in this country and construction will be stalled for years. We have natural resources we refuse to exploit. Exxon Mobil is about to invest 15 billion dollars in a LNG pipeline in Papua New Guinea—we have tons of natural gas in this country we could be tapping. We should have nuclear power plants going up all over the place, which would provide lots of “good jobs” as well.
Obama needs to be hammered for his incoherence regarding an energy policy here, and the how he is stifling the creation of “good” jobs, not fictitious green jobs that never materialized. (There’s a solar plant in Fremont, CA, that’s received hundreds of millions in tax subsidies and they are still laying off people. A plant in high-cost California can’t compete with China.)
"Watts Bar 2
"While the focus is on new technology, TVA undertook a detailed feasibility study which led to its decision in 2007 to complete unit 2 of its Watts Bar nuclear power plant in Tennessee. The 1177 MWe reactor is expected to come on line in 2013 at a cost of about $2.5 billion. Construction was suspended in 1985 when 80% complete and resumed in October 2007 under a still-valid permit, and is progressing on time and budget. Its twin, unit 1, started operation in 1996. Completing Watts Bar 2 utilizes an existing asset, thus saving time and cost relative to alternatives for new baseload capacity. It was expected to provide power at 4.4 ¢/kWh, 20-25% less than coal-fired or new nuclear alternatives and 43% less than natural gas."
“Beam me up Scotty! There is no intelligent life to be found here!”
This is total bullsh!t. in 2007, the price of oil went from 51 per barrel to 100 per barrel (January 2008). Gas averaged 2.80 per gallon.
This operation was one done by the Saudis to increase the price of oil. Just marketing.
With the new technologies the Saudi reserves are probably understated, perhaps by as much as 3x.
That’s what I see. Well said. Agree with everything you wrote here.
Confirmed by who? Wikipedia? C'mon folks, just because I'm eating food at the same rate I was a ten years ago, doesn't mean that there is any less food in my refrigerator.
This controversy is nothing new to FR long timers. We’ve been discussing this off and on for the past decade.
Most experts agree that most of the 5-7 years it would take to pump new oil would be caused by environmentalist filing court actions against the drilling. IN reality if we were on a “war plan” we could have operational rigs pumping in less than one year. Once we started pumping our own oil we would not run out for about 200 years. We could become a major oil exporter. We then could be dictating foreign policy to the Muslims and not worry about the radical extremists.
the House of Saud being untruthful with the infidels? The dickens you say! /sarc
It has been so long ago I can’t remember the date. I will never forget the event.
TVA decided to continue unit 1 but suspend work on unit 2 at Watts Bar. They let a contract for a high security guard station to permit entry to unit 1 and block of unit 2. My contract was for providing and installing bullet resistant glass. I provided and installed all the glass per specs and got paid in full.
Months after my work was complete, a TVA (read that Union) carpenter told his buddies the glass wouldn’t break and struck it with a hammer. He broke the innermost of the several layers of the 1.75” glass. TVA provided a change order for a new lite and I sent a crew to remove and replace the damaged glass.
Months later, I received on my telex a long message from TVA indicating that the work was not according to specs and the glass must be replaced within some ridiculously short time before final acceptance or I was subject to some liquidated damages of $500 thousand per day. The label on the glass was different and indicated the thickness was 1 3/16 not 1 3/4”
Well, I knew that was wrong because it would have been obvious to my glaziers because the glazing tape would be far too small to fill the rabbet. Any way I hit the trail for Soddy Daisey to see what was the problem. Sure enough the etched label was different and incorrect. Loud pleas to the manufacturer got results, but not in time to meet the deadline before the mortal daily liquidated damages took effect
Then, lo and behold, a miracle. Three Mile Island melted. All nuclear operations were placed on indefinite shutdown. The work at Watts Bar was stopped. The new glass was produced and eventually we were allowed back in to replace the mislabeled replacement.
Why did I not check it? The firsts replacement was shipped directly to TVA stores at Watts Bar, not to my shop.
My company did all the glass work at Watts Bar and at Sequoyah.
Their carpenter breaks it with a hammer and they threaten you with $500,000/day fines. Nice.
I'm sure that one day, they'll be right, and will loudly say so. Meanwhile, I'll not lose too much sleep over it.
As past history indicates - AND as long as the gov't keeps its fingers out - oil prices are entirely self regulating. When they go up, driving goes down, and prices soon follow. Simple Supply and Demand.
(a prize for anyone who can quote artist and song).
ooh. oh let me guess. Jimi Hendrix, castles Made of Sand. least thats what comes to my mind.
FWIW, the Saudis really have not yet started secondary recovery like TX and most old US oilfields. Most oilfields produce about 30% of oil in place naturally, then require reservoir pressure maintenance, mostly by water injection, to continue recover, albeit at a lower rate and higher cost.
If the Saudis could go to massive scale secondary recovery quickly, say over 4-5 years, they still are likely going to have production rate decline, despite reserves going up. If they have already been counting secondary recovery potential as reserves, then the the global capacity probably is in a bind. This is not due to limits of mankind’s abilities, but due to the restraints of governments.
Bob Dylan, Times They Are Changing?
Tell us what you’ve seen
In faraway forgotten lands
Where empires have turned back to sand
I can’t talk anymore CIA has found out that I have exposed the peak oil hoax. I’m on the run.
OK, rings a bell, but I cant pin it down. ELP? King Crimson?
When America gets serious about drilling domestically, you will see the prices go down. I am not even talking about output, just planning to drill will drive the cost of oil through the floor.
Artist: The Moody Blues
Album: On the Threshold of a Dream
Song: Lovely to See You
True, but if you did not restock your fridge, I suspect it would be empty. Saudi Arabia has not found a really major field since the 1970s and they have looked. At this point they aren't reflecting a decrease in reserves for the oil that has been pumped since they boosted their reported reserves [also without actually finding any new oil] in the 1980s.
BTW, peak oil is not about reserves, but the rate at which oil can be produced. I have an interest in an oilfield in OK that back in the 1930s had individual wells that produced up to 1000 barrels per day. There is still a lot of oil there. I supect there will still be production there long after I am desd. However even if every well in the part of the field I have an interest was put on a high volume submersible pump that field will never approach 500 barrels per day out of the 25 existing wells or out of economically viable new wells on the thousand or so acres of the property.
Thanks to Wikileaks [and] The Guardian: The US fears that Saudi Arabia, the world's largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show... The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East.IOW, nothing new, no facts, just more veiled threats from the Kingdom. Thanks SeekAndFind.