27 July 2008


I sat down with a friend who works in Saudi Arabia last night and had a long conversation. For obvious reason I cannot revel his name. Also his job does not give him access to production numbers, and certainly not decline rates, so he can only tell me what he has observed in his many years in Saudi.

He says there have been dramatic changes in Saudi in the last few years. He says there has been a massive influx of new employees in ARAMCO. Many of them, he says, are from Venezuela, anti-Chavezites who were fired by Chavez during the strike...

...And here is my assessment, my educated guess, at what is happening in Saudi. I think Saudi is at least 60% depleted and only heroic efforts are keeping them from a steep decline. They have found that they can keep production up by greatly increasing the injection water and poking more holes in their fields. Their new wells are horizontal and therefore suck only from the very top of the reservoir. I believe that Saudi is only a year or two away from hitting a decline wall. Reviving old mothballed fields like Khurais will hold the decline off for awhile but when it hits it will hit with a thud.

I believe that Saudi reserves, as well as well as all other OPEC reserves are grossly exaggerated and that is the bombshell that will rock the world when that fact is finally realized by the mainstream media. (Full Thread)