Ghawar Field In Perspective...Updated 4/2/19

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Ethan / JRyan
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By Grace Alone Go I...

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Ghawar Field In Perspective...Updated 4/2/19 Aug 17, 2018 22:08:14 GMT -5

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Post by Ethan / JRyan on Aug 17, 2018 22:08:14 GMT -5

A link from elsewhere with great information on Ghawar.

Ghawar Oil Field

Ghawar reservoir details
The world’s biggest oil bearing Ghawar reservoir, 280km-long and 40km-wide underlying 1.3million acres, is situated in the eastern part of the Empty Quarter desert along the western Gulf coast.

The main reservoir of the field, 100m in thickness and lying 2,100m beneath the surface, comprises of highly porous and permeable Arab-D Jurassic organic rich mudstones.

The field was estimated to contain about 70billion barrels of remaining oil reserves and 90trillion cubic feet of natural gas reserves at the beginning of 2013.

Ghawar Field In Perspective...

When we are talking about oil fields and the possible size...I would like to add some perspective. I keep thinking 1 Billion barrels for a multitude of reasons but the main one is Israel's immediate needs.

Some speculate that it is the largest ever. I do not feel that is reasonable but I will state that all things are possible with God but I do not think this will happen.

KyOil
The current largest field is Ghawar in Saudi Arabia. Its difficult to find info on its reserves, but its currently producing 5 million BOPD and has been in production for 70 years. Its average well produces 1,500 BOPD and the field is about 3,300 square miles. Only about 1/2 that area has oil wells as its irregularly shaped and not all the area is productive.

Here is why, look at Israel in relation to size of SA.

Here is Ghawar....in relation...at at 100 billion barrels the largest ever so far.

Notice how close this would be to other countries..

This could very well be the reason, the geopolitical reason for Zion to be quiet. I am not saying that is why, just stating it is a possibility.

A 50 million barrel reserve would be fine and accomplish many things for Zion. Cash flow being the largest.

When we talk of the largest ever, then it would be an issue of what countries take part in the bonanza as you can see the size does not work.

One last thing, here is the layout of Ghawar..

Guess where we are??

Last Edit: Apr 4, 2019 21:12:39 GMT -5 by Ethan / JRyan

By Grace Alone Go I

Ethan / JRyan
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Ghawar Field In Perspective...Updated 4/2/19 Apr 2, 2019 18:22:29 GMT -5

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Post by Ethan / JRyan on Apr 2, 2019 18:22:29 GMT -5

An interesting article today, thanks Moses!

The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed

(Bloomberg) -- It was a state secret and the source of a kingdom’s riches. It was so important that U.S. military planners once debated how to seize it by force. For oil traders, it was a source of endless speculation.

Now the market finally knows: Ghawar in Saudi Arabia, the world’s largest conventional oil field, can produce a lot less than almost anyone believed.

When Saudi Aramco on Monday published its first ever profit figures since its nationalization nearly 40 years ago, it also lifted the veil of secrecy around its mega oil fields. The company’s bond prospectus revealed that Ghawar is able to pump a maximum of 3.8 million barrels a day -- well below the more than 5 million that had become conventional wisdom in the market.

“As Saudi’s largest field, a surprisingly low production capacity figure from Ghawar is the stand-out of the report,” said Virendra Chauhan, head of upstream at consultant Energy Aspects Ltd. in Singapore.

The Energy Information Administration, a U.S. government body that provides statistical information and often is used as a benchmark by the oil market, listed Ghawar’s production capacity at 5.8 million barrels a day in 2017. Aramco, in a presentation in Washington in 2004 when it tried to debunk the “peak oil” supply theories of the late U.S. oil banker Matt Simmons, also said the field was pumping more than 5 million barrels a day, and had been doing so since at least the previous decade.

In his book “Twilight in the Desert,” Simmons argued that Saudi Arabia would struggle to boost production due to the imminent depletion of Ghawar, among other factors. “Field-by-field production reports disappeared behind a wall of secrecy over two decades ago,” he wrote in his book in reference to Aramco’s nationalization.

The new details about Ghawar prove one of Simmons’s points but he missed other changes in technology that allowed Saudi Arabia -- and, more importantly, U.S. shale producers -- to boost output significantly, with global oil production yet to peak.

The prospectus offered no information about why Ghawar can produce today a quarter less than 15 years ago -- a significant reduction for any oil field. The report also didn’t say whether capacity would continue to decline at a similar rate in the future.

Aramco wasn’t immediately able to comment.

Lost Crown

The new maximum production rate for Ghawar means that the Permian in the U.S., which pumped 4.1 million barrels a day last month according to government data, is already the largest oil production basin. The comparison isn’t exact -- the Saudi field is a conventional reservoir, while the Permian is an unconventional shale formation -- yet it shows the shifting balance of power in the market.

Ghawar, which measures about 174 miles long -- or about the distance from New York to Baltimore -- is so important for Saudi Arabia because the field has “accounted for more than half of the total cumulative crude oil production in the kingdom,” according to the bond prospectus. The country has been pumping since the discovery of the Dammam No. 7 well in 1938.

On top of Ghawar, which was found in 1948 by an American geologist, Saudi Arabia relies heavily on two other mega-fields: Khurais, which was discovered in 1957, and can pump 1.45 million barrels a day, and Safaniyah, found in 1951 and still today the world’s largest offshore oil field with capacity of 1.3 million barrels a day. In total, Aramco operates 101 oil fields.

The 470-page bond prospectus confirms that Saudi Aramco is able to pump a maximum of 12 million barrels a day -- as Riyadh has said for several years. The kingdom has access to another 500,000 barrels a day of output capacity in the so-called neutral zone shared with Kuwait. That area isn’t producing anything now due a political dispute with its neighbor.

While the prospectus confirmed the overall maximum production capacity, the split among fields is different to what the market had assumed. As a policy, Saudi Arabia keeps about 1 million to 2 million barrels a day of its capacity in reserve, using it only during wars, disruptions elsewhere or unusually strong demand. Saudi Arabia briefly pumped a record of more than 11 million barrels a day in late 2018.

“The company also uses this spare capacity as an alternative supply option in case of unplanned production outages at any field and to maintain its production levels during routine field maintenance,” Aramco said in its prospectus.

Costly Strategy

For Aramco, that’s a significant cost, as it has invested billions of dollars into facilities that aren’t regularly used. However, the company said the ability to tap its spare capacity also allows it to profit handsomely at times of market tightness, providing an extra $35.5 billion in revenue from 2013 to 2018. Last year, Saudi Energy Minister Khalid Al-Falih said maintaining this supply buffer costs about $2 billion a year.

Aramco also disclosed reserves at its top-five fields, revealing that some of them have shorter lifespans than previously thought. Ghawar, for example, has 48.2 billion barrels of oil left, which would last another 34 years at the maximum rate of production. Nonetheless, companies are often able to boost the reserves over time by deploying new techniques or technology.

In total, the kingdom has 226 billion barrels of reserves, enough for another 52 years of production at the maximum capacity of 12 million barrels a day.

The Saudis also told the world that their fields are aging better than expected, with “low depletion rates of 1 percent to 2 percent per year,” slower than the 5 percent decline some analysts suspected.

Yet, it also said that some of its reserves -- about a fifth of the total -- had been drilled so systematically over nearly a century that more than 40 percent of their oil has been already extracted, a considerable figure for an industry that usually struggles to recover more than half the barrels in place underground.

To contact the reporter on this story: Javier Blas in London at jblas3@bloomberg.net

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net, Helen Robertson, James Herron

Last Edit: Aug 18, 2019 17:03:02 GMT -5 by Ethan / JRyan

By Grace Alone Go I

Ethan / JRyan
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Ghawar Field In Perspective...Updated 4/2/19 Aug 18, 2019 17:38:16 GMT -5

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Post by Ethan / JRyan on Aug 18, 2019 17:38:16 GMT -5

I do not take this for granted as I do not hold to what Aramco says as being accurate and the IPO idea went silent for a reason but I also understand that as technology increases, there could be further advances to Ghawar that could increase output. I personally think the field is in decline but still it is a massive oil field and will remain relevant for years to come.

No… “The biggest Saudi oil field is [NOT] fading faster than anyone guessed”…
David Middleton / April 4, 2019

One of the comments (H/T to RicDre) on my post about Arctic oil exploration cited this article from Bloomberg/MSN Money…

The biggest Saudi oil field is fading faster than anyone guessed

Javier Blas 11 hrs ago

It was a state secret and the source of a kingdom’s riches. It was so important that U.S. military planners once debated how to seize it by force. For oil traders, it was a source of endless speculation.

Now the market finally knows: Ghawar in Saudi Arabia, the world’s largest conventional oil field, can produce a lot less than almost anyone believed.

When Saudi Aramco on Monday published its first ever profit figures since its nationalization nearly 40 years ago, it also lifted the veil of secrecy around its mega oil fields. The company’s bond prospectus revealed that Ghawar is able to pump a maximum of 3.8 million barrels a day — well below the more than 5 million that had become conventional wisdom in the market.

“As Saudi’s largest field, a surprisingly low production capacity figure from Ghawar is the stand-out of the report,” said Virendra Chauhan, head of upstream at consultant Energy Aspects Ltd. in Singapore.

[…]More mistakes at MSN Money

My first thought was that 3.8 million bbl/d (barrels per day) was a reasonable number. It had long been assumed that Ghawar was producing around 5 million bbl/d. An Aramco presentation on water cut management showed the production a little over 5 million bbl/d in 2004. Prior to Aramco’s decision to move toward an IPO (initial public offering), they were very secretive regarding production and reserve details. In order to be listed on major stock exchanges, Aramco has had to open their books up to independent auditors. The recent independent audit by DeGolyer & McNaughton actually boosted Aramco’s proved reserves. There are nearly 100 oil fields in Saudi Arabia, including several giants besides Ghawar. It just happens to be the biggest.

With about half of Ghawar’s EUR (estimated ultimate recovery) having already been produced, the field should be in decline. It will produce for another 40 years or so, but the rate should slowly decline over time. The Bloomberg/MSN Money article claims that Aramco’s 2019 bond prospectus shows the maximum production rate to be 3.8 million bbl/d. If so, it’s now producing at a slightly lower rate than the entire Permian Basin and would reflect a 2% decline rate, less than half of the typical 5.7% decline rate for mature oil fields. This shouldn’t surprise anyone. Even if the article was accurate, it would fall into the No Schist Sherlock category.

However, it turns out that the Bloomberg/MSN Money article was not even wrong.

[T]here is fairly little in this prospectus to give us a sense of Aramco’s coming production numbers in a week, a month, a year, or ten years. Nevertheless, an article was published on Tuesday claiming that Aramco’s supergiant oilfield Ghawar is “fading faster than anyone guessed,” and it helped move oil prices higher.

The article incorrectly asserts that capacity at Ghawar field has dropped, though we do not know this to be true. Ghawar has long been the largest and most productive oilfield in the world, and the article accurately states that it produced 5 mbpd as recently as 15 years ago. It is the most famous oilfield and it is seen as a staple of oil production in the industry, so any news that it is getting old and declining sparks fear of “peak oil” among traders.

In truth, the Aramco bond prospectus provides little information about Ghawar’s current or future production. The only information it does provide is in the form of something called the “MSC.” This term is refers to the capacity that Aramco is required by law to be able to access within a three-month timeframe.

The Saudi Hydrocarbons Law sets the total Saudi MSC at 12 million bpd. In other words, Aramco must be able to ramp up production from whatever level it is producing to 12 million bpd in just three months time, and Aramco must be able to hold the 12 mbpd level for one year. In accordance with this requirement, Aramco breaks down that production by field. So, if for some reason it becomes necessary for Aramco to increase production to 12 million bpd, Ghawar field’s responsibility is to produce 3.8 million bpd.

Investing.com

Being curious and knowing a little bit about the oil & gas industry, I downloaded Aramco’s nearly 500-page prospectus and did a little research (about 5 minutes’ worth)…

The Company maintains MSC in accordance with the requirements of the Hydrocarbons Law. MSC refers to the average maximum number of barrels per day of crude oil that can be produced for one year during any future planning period, after taking into account all planned capital expenditures and maintenance, repair and operating costs, and after being given three months to make operational adjustments. As at 31 December 2018, the Company’s MSC was 12.0 million barrels of crude oil per day. The spare capacity afforded by maintaining MSC enables the Company to increase its crude oil production above planned level rapidly in response to changes in global crude oil supply and demand. The Company also uses this spare capacity as an alternative supply option in case of unplanned production outages at any field and to maintain its production levels during routine field maintenance. The Company generated revenues by utilising the spare capacity provided by MSC of SAR 133.0 billion ($35.5 billion) from 2013 to 2018.

Saudi Aramco

From the Aramco prospectus (p. 88):

mmbl = million barrels, mmboe = million barrels of oil equivalent, mmbpd = million barrels per day

“Liquids” refers to proved reserves of crude oil, natural gas condensate and natural gas liquids. “Combined” refers to proved reserves of liquids plus natural gas. “MSC” refers to the maximum sustained production rate “during any future planning period.” It does not refer to the current maximum production rate. Ghawar could be producing much less or much more than 3.8 mmbpd. The MSC rate is more of a minimum rather than a maximum. Aramco is basically guaranteeing that Ghawar’s maximum sustained production rate will be at least 3.8 mmbpd for the foreseeable future (“any future planning period”).

The really funny thing is that Wikipedia has already incorporated the Bloomberg/MSN Money mistake…

“The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed”. April 2019.

List of oil fields, Wikipedia

Note to Wikipedia, Bloomberg and MSN Money…

Last Edit: Aug 18, 2019 17:39:38 GMT -5 by Ethan / JRyan

By Grace Alone Go I

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Ethan / JRyan: Remember, Life is but a short time. Eternity is what actually counts. These are strange days for all, especially the nation of Israel. The well is but a blip in the big picture. Pray the Ancient of Days spares us in the coming weeks... Aug 9, 2024 14:06:42 GMT -5

Ethan / JRyan: Well it is getting more insane now......Pray for peace, the search for oil can wait. Oct 3, 2024 7:00:06 GMT -5

Ethan / JRyan: Why the rise on no news? Nice but odd don't ya think? Nov 8, 2024 10:00:37 GMT -5

Ethan / JRyan: What a nice day but look at the volume? WOW Nov 14, 2024 15:22:15 GMT -5

Ethan / JRyan: Clueless as to why but not complaining.......Amazing really. Still a HUGE risk. Nov 19, 2024 10:32:59 GMT -5