Is the Ghawar Oilfield Running Out of Oil?
Admitting that the worldwide oil supply is in a state of decline seems to be something that leading politicians and industry executives simply won't do.
However, an increasing number of industry analysts feel that this indeed might be the case. Those who believe this to be true point to the situation in Saudi Arabia, the largest oil producer for the past 30 years, or so. For quite some time, industry watchers have postulated that Ghawar, the biggest oil field in the world, has reached its plateau of production.
For those uninformed about Ghawar, it is by far the largest conventional oil field in the world, measuring an estimated 175 miles by 20 miles. Currently, some say that the field produces between 4.5 and 5 million barrels of oil per day by outside observers, in excess of six percent of worldwide production. The officially stated maximum sustained crude production capacity is 8.5 million barrels per day, though actual daily output is a closely-guarded state secret. Thus far, approximately 60 billion barrels have been pumped out of Ghawar since production began back in 1951.
Ghawar's total proven reserves, also known as 'recoverable' oil, still left in the ground, have been estimated at just over 70 billion barrels by Saudi Aramco, the nationalized oil company which is the largest of its type in the world. The word 'recoverable' is extremely relevant, as the total amount of oil in the ground is less significant than the amount that can easily be harvested at a given level of extractive technology. While modern techniques can certainly boost the amount of oil that can be extracted per oil field, the question of how expensive the operation turns out to be remains extremely pertinent. Once oil extraction becomes too difficult, and therefore expensive, it becomes economically infeasible to attempt to remove the remaining supply.
Saudi Arabia comes under particular scrutiny because of its importance in the world oil markets. It has long been acknowledged as the world's largest producer of oil, and has acted as a 'swing producer,' modulating oil extraction rates to balance to the global market in concert with the other nations in the Organization of Petroleum Exporting Countries (OPEC).
Some worrying signs clearly indicate that the largest oil field in the world might be in permanent decline. Early in 2006, a Saudi Aramco spokesman admitted that its older fields are now declining at a rate of 8 percent per year. The direct implication is that Ghawar is past its 'peak' of production. The spokesman continued that measures were being taken to offset the decline, but that the only viable solution to declining crude supplies is to locate new fields, and it is beyond debate that oil field discoveries have not kept pace with burgeoning worldwide demand.
If Ghawar is indeed in decline, it likely means that the rest of the world is as well. Of the 'super-giant' oil fields, four are officially in decline: China's Daquing, Mexico's Cantarell; Russia's Samotlor; and Kuwait's Burgan. In spite of the fact that Ghawar has not officially been so declared, the implications of the facts noted above are clear.
About the Author: Matthew Paolini is Citybook.com's technical director for the Phoenix, AZ online Yellow Pages division.
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Print Article | Download PDF | 141 views | Jun 20 2007
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