If you end up being surprised by the big story of the next decade, you can’t say, “nobody told us.” Instead you’ll have to say, “we didn’t listen.”
Stuart Staniford (Ph.D. in physics) has been conducting a very careful and detailed investigation of all that is publicly known about Ghawar in Saudi Arabia, which is by far the world’s largest and most important oil field. This field has been managed by injecting water below the oil, which causes the remaining oil to rise toward the top of the reservoir where it can be more readily pumped out. The following diagram is an example of the kind of evidence Stuart has looked at to determine how high the water level was at different locations and different points of time. The figure comes from a Society of Petroleum Engineers study, and shows the location of the oil water contact at different dates.
The original source did not identify the exact location or details for the diagram, but Stuart believes it represents a slice from the northernmost thumb of the field:
If that matching is accurate, it implies the following values for the oil water contacts over time:
|1975||-6550′ ± 50′|
|1979||-6475′ ± 50′|
|1980||-6450′ ± 50′|
These three points are indicated by light blue rectangles on the figure below. Stuart combined the slope implied by these three points with that inferred from a number of other sources for this field to extrapolate the blue line in the figure below. The graph also includes a couple of more recent inferences (the fuchsia and orange rectangles) from public information that Saudi Aramco likely did not believe would reveal this sort of detail, but that Stuart, through careful sleuthing, believes he can infer.
By far the most important evidence Stuart brings to bear is based on an effort to reconcile various maps of the detailed geologic structure of Ghawar. With this and estimates of the permeability and porosity of the rock, one can then infer how a particular production rate (in thousands of barrels per day) would translate into a rise in the oil water contact over time. Stuart’s analysis appears to be quite detailed and sophisticated, including for example a modest planar slope to the oil water contact at a fixed point in time arising from differentials in water salinity. Stuart’s inferred path is shown in the red line above. Although one might quarrel about any single piece of evidence, the agreement of the inference from the various sources seems pretty compelling.
The following diagram shows the implication of Stuart’s computer-based simulation. The left panel displays the estimated extent of the oil before development, and the right panels show Stuart’s best guess of what is now left. The far right includes a separate modeling of the gas caps on top of the oil, whereas the middle does not.
If Stuart’s analysis is correct, it seems very likely that production from the northern part of Ghawar must have already entered a period of sharp and irreversible decline, which would account for the otherwise unexplained drops in Saudi Arabian oil production over the last two years.
To put this in perspective, the panels above represent only a small part of the 175-mile-long Ghawar oil field, specifically the section designated on the diagram below, in which red denotes oil and light blue the injected water:
Whether this picture describes a particular historical or simulated future condition is not known. In its original setting, the figure was intended simply to illustrate how Saudi Aramco’s detailed simulation model worked. But Stuart believes the figure accurately describes the condition of the field in 2004, and shows the same level of depletion in the north as implied by his own calculations; indeed, the inference Stuart draws from the above figure shows up as the fuchshia rectangle on the earlier graph of the slope (third graph shown here).
Now, one might conclude from this last picture that we’re only talking about depletion of a small part of the total Ghawar field. But based on the features of the rock, this is by far the best part, historically accounting for half the production from the field. Stuart acknowledges that
Southern Ghawar, by contrast, can maintain plateau for decades to come, but there is only 1.7mbpd of production there on last known figures.
Here I have only skimmed the surface of Stuart’s painstakingly detailed analysis. But let me briefly comment on what it means and why he did it. Neither Stuart nor I have a particular agenda here. The Saudis have been deliberately concealing the data that could settle this speculation quite conclusively. And yet, accurate information about what is ahead is absolutely vital in order to help us all make the adjustments and adaptations necessary for what is to come. Stuart observed that nobody had a compelling fix on the facts, even though the story may prove to be one of the most important events of our lifetime. For that reason, he decided that it was worthwhile for someone with his abilities to wade through all the detailed information available to try to form the most accurate picture of where things currently stand.
After Stuart’s monumental research, I really think the burden of proof is on those who claim that Saudi Arabian production can continue to increase. At this point, we need not the conclusions of experts nor the reassurances from Aramco, but hard data to support the claims.
If Saudi production is permanently on the way down, we have just entered a new phase of history.