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WASHINGTON - Saudi Arabia has plenty of oil — more than the world is likely to need — along with an increasing ability to refine crude oil into gasoline and other products before selling it overseas, a top Saudi official says.

"The world is more likely to run out of uses for oil than Saudi Arabia is going to run out of oil," Adel al-Jubeir, top foreign policy adviser for Saudi Arabia's de facto ruler Crown Prince Abdullah, said Wednesday.

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The nation's oil minister said last month the level of 12.5 million to 15 million barrels daily could be sustained for up to 50 years.

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ahem.

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The problem of supply growth is best illustrated by the world's largest oilfield, Saudi Arabia's Ghawar field.

Ghawar is the Don Bradman of oil. Between 1948 and 1952 a series of wildcats proved around 170 billion barrels in the field. Early explorers thought they had made several discoveries over a 200 kilometre long stretch of desert, until they realised their finds were all the same giant structure.

Ghawar has provided between 55-60% of Saudi production since 1951. It currently produces almost five million barrels per day, more than half Saudi Arabia's output. Led by Ghawar, just five fields account for 90% of Saudi production.

Matthew Simmons, one of President Bush's oil industry advisors, has studied technical reports on Ghawar going back to the 1960s. Although none of these reports provide a meaningful conclusion by themselves, by piecing all the data together Simmons has concluded Ghawar may soon enter terminal decline.

Almost by definition, decline at Ghawar would mean the beginning of the end for Saudi Arabia's oil production. The country's undeveloped oil fields couldn't get close to matching Ghawar's immense size and productivity, so even a massive oilfield development program would not offset terminal decline at Ghawar.

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Eventually, over the years what flows from the well will be almost pure water. It's in decline as you say WW. But the Saudi Shayba oil field is fresh and young and needs little water.

Whether the Saudis can feed the world with their oil is a moot question. Oil companies are having a hard time finding new oil while demand for it is increasing world wide.

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"The world is more likely to run out of uses for oil than Saudi Arabia is going to run out of oil," Adel al-Jubeir, top foreign policy adviser for Saudi Arabia's de facto ruler Crown Prince Abdullah, said Wednesday.

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Originally posted by Rufus Polson:

Clearly either the Saudis have the bomb and aren't afraid to use it, or they've started buying into the Bush "rapture" thing.
Those are the only explanations I can envision for their warning that the world is about to run out of uses for oil.

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[ 10 June 2005: Message edited by: Cueball ]

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Bush's ludicrous statements about Iraq are increasingly reminiscent of the propaganda spouted by the former spokesman for the Iraqi regime -- except that they're not funny.

By Juan Cole

June 9, 2005 | The sheer dishonesty of the Bush administration whenever it speaks about the situation in Iraq was on display again during Bush's Tuesday press conference with visiting British Prime Minister Tony Blair. In recent weeks Bush has repeatedly expressed wild optimism, utterly unfounded in reality, about the political process in Iraq and about the ability of the new Iraqi government and army to win the guerrilla war. He has if anything been outdone in this rhetoric by Vice President Dick Cheney. This pie-in-the-sky attitude, which increasingly few believe, degrades our civic discourse, and it endangers the national security of the United States.

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simmons is the chief executive of a major energy-focused investment bank, which counts halliburton and the World Bank among its clients, he's a member of the council on foreign relations, he was an adviser to bush's election campaign and cheney's energy task force.

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Originally posted by CMOT Dibbler:

They have said exactly the opposite. They are lying of course, but since when has the house of Saud worried about the truth?

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VIENNA, Austria -- Oil prices settled at a record high above $60 a barrel on Monday, reflecting traders' concerns about strong demand and potential supply bottlenecks.

With $60 no longer a threshold - and with continued concerns about refining capacities - prices appeared set to go even higher, analysts said.

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Originally posted by DrConway:
Oil above $60/barrel now

I'm pretty sure we're above 1973 levels, since $12-15 a barrel back then works out to like $45 a barrel today.

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Yes, oil prices in 1979 were well above 1973 levels, but the year 1973 marked the first major oil price increase and benchmarking against that gives a feel for how high oil has got relative to that.

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Originally posted by DrConway:
I saw the article, silly.

Yes, oil prices in 1979 were well above 1973 levels, but the year 1973 marked the first major oil price increase and benchmarking against that gives a feel for how high oil has got relative to that.

A couple years ago someone said, IIRC, that oil would probably have to hit $100 a barrel to have the same kind of impact that the 1973 and 1979 shocks did.

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