Oooops! Saudi oil reserves 'overstated by 40%' (Long suspected, now apparently confirmed)

As far back as 2004, there was worry that the Saudis were fudging on how much oil they still had in the ground. Thanks to Wikileaks, we now have a little better idea. 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 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.

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.

(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.

"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"

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.

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