Report On ASPO Conference - Matt Simmons Says Ghawar In Decline

EDIT

"Just days before the Aspo meeting, Ali al-Naimi, Saudi Arabia's oil minister, claimed the desert kingdom could move from producing around 9m barrels a day, to 12m or even 15m. This has been consistently stated but, so far, unfulfilled by the kingdom and its state oil company Saudi Aramco. What is more worrying is that Naimi for the first time put a limit on that level of production: around 15 years. Previously, the Saudis had said they could pump at this level for 50 or even 100 years.

Matthew Simmons, Aspo delegate, adviser on George Bush's energy plan, and investment banker, is a leading expert on Saudi oil production. He is sceptical about all the Saudi figures and his book on the subject, Twilight in the Desert, is causing waves in the industry, despite not hitting the shelves for another fortnight. "No one can know how much oil Saudi Arabia has left underground," Simmons says. "A handful of people at Saudi Aramco think they know, but no one really does. Why? Because Saudi Aramco has a kind of omerta, a code of silence that runs through it.

"I met a guy a few years back, at a conference where I was the keynote speaker. He was a senior engineer working for Aramco, senior enough to be flown to Houston to hear me speak. Afterwards, I asked him the size of Saudi Arabia's biggest field, Gharwar. Not in terms of reserves, just its physical size. It was something I could have looked up on a map, but I thought I would just ask him. He said: 'It's about 130 miles long and 15 to 20 miles across, but don't ever tell anyone at Aramco I said that or I'll lose my job.'"

This revelation set Simmons thinking. "How could this senior figure be so scared?" he asks. "After all, he wasn't telling me anything I couldn't have found out myself. It amazed me and set me looking at Saudi production in a whole new light." Now Simmons believes that Gharwar, the biggest oilfield on the planet, is definitely in decline. "It's got to be," he says. If he is right, there is little left to replace it and the beginning of the end of oil could be upon us sooner than we think."

EDIT/END

At least a few people in Europe are paying attention . . .

http://society.guardian.co.uk/societyguardian/story/0,,1491029,00.html

The last time I browsed Deffeyes’ website, he was citing the figure of one barrel of water being pumped with every 3-4 barrels of crude. He also reports that "water coning" -- the unwanted displacement of oil by pumped-in seawater -- leads to geologic changes that further degrade the oil quality and recoverability.

Simmons, coming from finance and economics, has a more conservative tendency to hold back until his i's are crossed and t's are dotted. So this is actually a strong confirmation of the accelerated decline scenario.

I gather that it's kind of like pouring sugar in your gas tank so that the gasoline pump will have less distance to pump from.

--p!

Deffeyes' estimates may be a bit low, or he may just being conservative.

On a related note, I was delighted to see that Twilight In The Desert is finally coming out - but we still have to wait another two weeks - grrrr!!!

a good thing.

It doesn't have to be a good thing, of course, but it could be. The choice is up to us.