[whataretheysaying] Mary Madigan: Saudi Oil Production Declining?

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Posted by Mary Madigan:
Saudi Oil Production Declining?
http://whataretheysaying.powerblogs.com/posts/1172891012.shtml


   Via [1]Pajamas Media:

     A number and graph heavy analysis from [2]The Oil Drum on the 8%
     decline in Saudi oil production in 2006. "On the whole, media
     coverage of OPEC production cuts appears to be almost completely
     unmoored from the data the agencies are reporting. The entire
     âproduction cutâ may be a public relations exercise to disguise
     other processes."

   From the [3]Oil Drum report:

     Overall, I feel this data is clear enough that I'm willing to go
     out on a limb and conclude the following:

     * Saudi Arabian oil production is now in decline.

     * The decline rate during the first year is very high (8%), akin to
     decline rates in other places developed with modern horizontal
     drilling techniques such as the North Sea.

     * Declines are rather unlikely to be arrested, and may well
     accelerate.

     * Matt Simmons appears to be right in [4]Twilight in the Desert,
     but the warning did not come until after declines had actually
     begun.

     I suggest that this is likely to place severe political strains on
     Saudi Arabia within a year or two at most...

     ...Finally, it's interesting to note this Saudi Aramco press
     release celebrating their achievements in 2006:

     2006 was a year of outstanding accomplishment. That was the message
     coming from the Feb. 21 meeting of the Executive Committee (Excom)
     of the Board of Directors in Dhahran. âThe company reacted rapidly
     to changes in global crude oil supply and demand during the year,â
     said president and CEO Abdallah S. Jumâah, relaying the results of
     that meeting in a teleconference Feb. 25. âAmbitious programs were
     proposed to expand future crude oil production and gas processing
     capabilities, and for increasing refining capacity both in the
     Kingdom and overseas.â 

     and

     Among 2006 accomplishments were the optimization of upstream
     operations, and development and depletion strategies to meet crude
     demand and increase maximum sustained capacity to 10.7 million
     barrels per day (bpd).

   When should we doubt what the Saudis say? When they open their mouths.

References

   1. http://pajamasmedia.com/2007/03/saudi_oil_production_declining.php
   2. http://www.theoildrum.com/node/2325
   3. http://www.theoildrum.com/node/2325
   4. http://www.amazon.com/Twilight-Desert-Coming-Saudi-Economy/dp/0471790184/ref=pd_bbs_sr_1/103-3498536-4418232?ie=UTF8&s=books&qid=1172822098&sr=8-1