Watching the World: The world energy dilemma

Jan. 23, 2012
As much of the world heads towards increased confrontation with Iran, one of the questions that will naturally arise is whether the loss of Iran’s oil supplies can be made up elsewhere.

As much of the world heads towards increased confrontation with Iran, one of the questions that will naturally arise is whether the loss of Iran’s oil supplies can be made up elsewhere.

Saudi Arabia’s Minister of Petroleum and Mineral Resources Ali I. Al-Naimi last week restated his country’s oft-repeated pledge to meet market demands as concerns rise over the possibility of reduced supplies due to sanctions against Iran.

Al-Naimi is highly conscious that his pledges often fall on deaf ears. Indeed, aware that some analysts doubt Saudi Arabia’s ability to sustain output levels of over 10 million b/d, Al-Naimi no longer gives them the time of day.

“We don’t take experts’ view into consideration. They can doubt as they want. Do you believe us or you believe skeptics? We have said many times that we meet customers’ demand. Period.” said Al-Naimi.

1.2 trillion bbl

This is the same Al-Naimi who told incredulous US officials in 2004 that Saudi Arabia’s previous recoverable crude oil estimate had more than quadrupled to 1.2 trillion bbl from the earlier 261 billion bbl.

“Saudi Arabia now has 1.2 trillion bbl of estimated reserve,” Al-Naimi told a conference on US-Saudi energy relations, adding that “This estimate is very conservative.”

“Our analysis gives us reason to be very optimistic. We are continuing to discover new resources, and we are using new technologies to extract even more oil from existing reserves,” the minister said.

Doubters will surely roll their eyes, but the Saudi oil minister has certain facts on his side—a point attested to by a forthcoming book.

The World Energy Dilemma by Lou Powers offers a fascinating inside look at Saudi Arabia’s potential, and one well worth reading. After all, Lou Powers—a petroleum engineer of 50 years’ experience—knows whereof he speaks.

16 million b/d

In his book, due out this spring, Powers recounts his experience as chief petroleum engineer at Aramco during 1978-79 when he was called on to help implement a program to boost Saudi oil production to 16 million b/d.

As part of his book, Lou has some 300 graphics, many of them taking up Saudi reserves and production. But no less important, Powers speaks highly of current Saudi technical expertise.

“3D reservoir models with high-speed gigabyte cells represent the most recent technological innovation announced by Aramco, and almost all of their reservoirs have huge, high-speed 3D models,” he says.

According to Powers, “this area of Saudi Aramco’s business is first-class, and they may now be leading the world in their technology as it applies to understanding the rock properties of their reservoirs and how to predict the future.”

Are the doubters listening?

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