Posted on 12/22/2014 5:28:28 AM PST by thackney
Why Saudis Decided Not to Prop Up Oil
http://www.wsj.com/articles/why-saudis-decided-not-to-prop-up-oil-1419219182
Dec. 21, 2014
The move has also exposed cracks inside the Saudi ruling circle. In October, as the oil-price slide accelerated, billionaire Prince al-Waleed bin Talal, a nephew to King Abdullah, castigated Mr. Naimi in an open letter for appearing to shrug off price declines. Belittling the impact, he wrote, “is a catastrophe that cannot go unmentioned.”
At about that time, Mr. Naimi’s deputy, Prince Abdulaziz bin Salman, another nephew of the king, worried to colleagues that the kingdom’s budget couldn’t bear lower prices long, said people familiar with the matter. The offices of Prince Abdulaziz and Prince al-Waleed didn’t respond to inquiries.
Maybe it’s a million/day. My memory/math is not so good.
Optimizing hydraulic fracturing enhances gas production in Saudi Arabia
http://www.worldoil.com/April-2013-OPTIMIZING-HYDRAULIC-FRACTURING-ENHANCES-GAS-PRODUCTION-IN-SAUDI-ARABIA.html
Hydraulic Fracture Geometry Evaluation Using Proppant Detection: Experiences in Saudi Arabia
https://www.onepetro.org/conference-paper/SPE-168094-MS
Wow. Thanks thackney.
Does that data indicate to you that SA is nearing the end of their reserves?
Or is fracking used routinely to decrease increase production costs even in cases where the field isn’t depleated?
No.
Or is fracking used routinely to decrease increase production costs even in cases where the field isn’t depleated?
The industry has used hydraulic fracturing for many decades. It is not a sign of the end. It is used when the cost to do it is justified by the greater production after that stimulation.
Don't read more into it than a somewhat expensive stimulation method that typically produces enough oil/gas to justify its use.
The US uses it far more commonly than other nations, but it is used in many nations.
“I think the Saudis take a longer view of the oil market than the rest of OPEC. They really do plan and invest. That doesn’t make the allies, but they are not fools.”
I hired on at Aramco to join its reserves group years ago.
Their reserves process was as weak as any I had ever seen, so I don’t place much stock in at least their technical acumen.
How long ago was that? I remember Saudi using one of the Cray Supercomputers for their reservoir modeling many years ago.
“Or is fracking used routinely to decrease increase production costs even in cases where the field isn’t depleated?”
there are many different types of reservoirs in which oil and gas exist.
We are a mature country when it comes to developing oil and gas. The easy pickings is over and we have to develop those resources contained in much more difficult (read tight or low permeability reservoir) than what was developed in the first hundred years of the oil industry.
The only way to potentially get this oil out of the rock is to fracture it to improve the delivery rates of individual wells. It works, but one must be selective on which rocks to try to frac that might make money.
There are other reasons to frac, but the preponderance here in USA is it is necessary for the poorer quality reservoirs that contain oil that have yet to produce.
That is the bad news. The good news we are blessed with an extremely large, a magnitude larger, amount of oil contained in these type of formations.
I never went and declined their offer due to 9/11.
Yes, we reservoir engineers used the Cray, Cyber 205, and still use powerful desktop to do reservoir simulation. I did my first in computer modeling’s infancy in 1974.
My original comment of "plan and invest" was more in mind of Jubail Industrial Complex and having large cash reserves. Some of my past companies worked on large additions at Jubail. I was never associated with the work, but they are building one of the world's largest petrochemical complexes, rather than just depending on Crude Oil alone.
“OPEC now has very little pricing power. “
That’s the key. When demand rises or supply falls enough that reducing production increases the price they will reduce production.
Until that day, if it ever comes, they have no reason to reduce.
September 11th, 2001: My wife and I were attending orientation in the Houston Aramco office to move to Saudi. They evacuated the building but our class voted to stay and finish and the instructors agreed. Much of the small class had flown in from other parts of the country.
Plans changed.
“Optimizing hydraulic fracturing enhances gas production in Saudi Arabia”
The reason they frac is their primary reservoir the Khuff is deep and tite.
The reason they go spend lots of money even to go after it is due to
1. their perceived need to develop natural gas resources to complement their oil
2. the need to continue a fuel stream to the country’s desalination plants. These are absolutely required to keep fresh water available to the crops and human needs.
3. there are rich liquids produced with the gas
4. they have lots and lots of gas bearing resources
Now that right there just breaks my heart. Too bad ole Cheese-edd is not around to live through it. He'd probably be declaring war on the US and ask his pal Osama Obama to surrender.
I see the reason is the same as we frac. Because it pays to do so. And because they don't have enough of that production without spending those dollars.
“Their reserves have not been verified in over a decade. They could be almost out and either not know it or don’t care.
“
Speaking as one who is familiar with reserves and the ME, they have abundant resources and are most certainly not almost out. The largest oil field in the world which has produced for 60 years is located their and accounts for 1/2 of all oil production to date from SA.
‘I see the reason is the same as we frac. Because it pays to do so. And because they don’t have enough of that production without spending those dollars. “
well, both their deep gas and our current unconventionals require fraccing to be economical at all, so I guess it is the same.
My difference is there are many reservoirs that cannot be drilled and developed profitably without fraccing, and then there are other reservoirs that can, but can be enhanced via fraccing.
“September 11th, 2001: My wife and I were attending orientation in the Houston Aramco office to move to Saudi. They evacuated the building but our class voted to stay and finish and the instructors agreed. Much of the small class had flown in from other parts of the country.
Plans changed.”
Wow, we could have been next door neighbors in the compoundment in Dhahran.
Was Benson Hill your contact?
I don’t remember the name Benson Hill. There was a woman that helped coordinate my video interviews with the Saudi’s, but I don’t remember then name.
Only time I had interviews where I got a “coach” to stay in the room with me and provide hints and suggestions while I spoke to a team via the cameras and video.
I just said they have not allowed independent verification of reserve resources, not that they are out. Just that we don't know for sure how much is left.
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