SIX OPEC NATIONS HAVE 70.5% OF WORLD'S PROVEN OIL RESERVES

Saleh M. Billo
King Saud University
Riyadh, Saudi Arabia

The Arabian Peninsula proper is, a great half basin open to the north, and comprises about 90% of the total area of Mesopotamia (a part of modern Iraq)-Arabian Gulf, eastern Rub-al-Khali lowlands. The Tethyan trough was marked by relative stability during most of the Paleozoic.

During Permian time this trough started to sink while simultaneously precipitating carbonate which gave way to marls and shales that were deposited in this trough into Eocene time. During Miocene and Oligocene time a shallow water reef-complex developed which became the Asmari limestone. This limestone or its equivalent, was deposited over the entire trough, and is the leading producer throughout the Iran, Iraq, Arabian Gulf region. It ranges from 1,000 to 2,000 ft in thickness and is overlain by Fars Anhydrite which is about 1 0,000 ft thick and consists of marls, limestones, and anhydrites and deforms plastically forming a cap rock for the traps.

The area is characterized by structural traps consisting of extremely long anticlines trending Northwest-Southeast. The Kirkuk oilfield (Fig. 5,6) is an accumulation of petroleum on a normal anticline which is 63 mi. in length and has a closure of 900 ft. The reservoir rock is the Asmari limestone of Middle Eocene to Lower Miocene age. Production within the reservoir is due both to porosity and fissuring. Oil is also produced from the rich oil pools of southwest Iran from the Asmari limestone (Upper Oligocene to Lower Miocene) in Masjid-i-Sulaiman and Haft Kel fields (Fig. 5,6). When a well is drilled (into the Asmari limestone of Iran) no appreciable production is obtained until a fissure is penetrated even though the drill may pass through bands of highly porous rocks. Samples of cutting showed porosity ranging from 2 to 5%, but the permeability was only between 0.00005 and 0.5 md. It is generally estimated that at least 80% of the recoverable oil is stored in the porous limestone while only 20% exists in the fissures. Although the oil is contained within the Asmari limestone, production is obtained only through fracture permeability. As in the Asmari limestone, but a slightly contrasting example is that faulting and fracture systems in the Castile varved anhydrite of Texas and New Mexico have given access to hydrocarbons that nurtured a population of sulfate-reducing bacteria, where bacterial activity resulted in the biogenic replacement of anhydrite by calcite, increasing permeability of fractures by about 10%. Diagrams of laboratory data from individual formations show that some convincing linear trends may be established when the porosity and permeability values are plotted on semilogarithmic coordinates and there is an average of about tenfold increase in permeability for a 3% increase in porosity. Paradoxically, although the fracture system in the Asmari limestone is so well developed that a pressure drop caused by production of one well will be detected in a well several miles away and the fracture system enables an entire field to be drained by a few wells, the fractures also cause a severe drilling problem and lost circulation is common.

One of the largest oil fields in the world is the Ghawar oilfield in Saudi Arabia (Fig. 6). One of the longest folds is the En Nala axis which extends from the southern end of Ghawar north to include, probably, Fadhili and Khursaniyah-a distance of more than 250 mi. (Fig. 6). In most cases, all the present and ancient structural accumulations of petroleum in Saudi Arabia, debarring Dammam and perhaps Khursaniyah, are in this sort of soft warping. Dammam exemplifies a seemingly deep-seated salt plug (Fig. 3,6).

NEW PLAYS AND RESERVES

The Saudi Arabian Oil Co. (Saudi Aramco) announced last June about the discovery of a new Paleozoic oil field, in Al Hawtah region, 190 km south of Riyadh at a depth of 6,300 ft, producing 8,000 b/d, with API gravity of 49 and 0.06% sulfur. The oil find substantiates the potential for considerable discoveries outside the former Aramco concession in areas reckoned as highly prospective. Aramco has augmented its exploration program since 1986 on a government directive extending the company's exploration area to the limits of its original concession (Fig. 6).

Since 1987, Aramco has also operated 2 land seismic crews, and five exploratory wells were completed with deeper pool nonassociated Permian Khuff gas reserves found in Khursaniyah field, north of any previous Khuff gas discoveries, and Khuff gas reserves were expanded at Shedgum, Uthmaniyah, and Ain-Dar; moreover the Jurassic Arab A reservoir in offshore Abu Sa'fah field was tested and found oil bearing. High-tech and streamlined exploration programs have boosted the kingdom's oil reserves, which added up to 169 billion bbl in 1987, to 252.384 billion bbl, and its gas reserves to 177.294 tcf at the end of 1988. The present infrastructure is capable of meeting domestic, regional, and international hydrocarbon exigencies, and by keeping pace with the ongoing and renascent endeavors, the petroleum reserves are contemplated to arrive at 315 billion bbl of oil, and 253 tcf of gas. Saudi Arabia's daily average production of crude oil reached 4,928,000 bbl in 1988 compared with 3,991,000 bbl in the preceding year.

Six OPEC members, five of them Gulf states, now have 70.5% of the world's proven oil reserves. According to revised estimates, the total increases of "big six" reserves in the last five years have been 308 billion bbl to a total of 699 billion bbl. These countries-Saudi Arabia, Iraq, the UAE, Kuwait, Iran and Venezuela-now account for 77% of the noncommunist world's oil reserves. Going backward, the reserves were 58, 39, 95, 98, 100, and 255 billion bbl for each of the forenamed countries respectively. The five Gulf states (Fig. 1) alone account for nearly two-thirds of the world's proven reserves. OPEC member countries in 1987 increased their proven crude oil reserves by 31.48 billion bbl, boosting the organization's share of the world total to 75.9% from 75.2% in 1986. Out of the world's proven crude oil reserves of 89.10 billion bbl in 1987, OPEC held 676.28 billion bbl. Of the world's total proven natural gas reserves of 111.54 tcm in 1987, OPEC's share comprised 41.54 trillion, or 37.2% of the world figure. OPEC crude production fell from 18.33 million b/d in 1986 to 17.15 million b/d in 1987 (Fig.7). Kuwait, Qatar, and Saudi Arabia all recorded reduced output, while Iran, Iraq, and the U.A.E. posted production increases. The declines were: Kuwait (1.24 million b/d to 971,600 b/d), Qatar (313,600 b/d to 291,400 b/d), Saudi Arabia (4.78 million b/d to 3.97 million b/d). The increases were: Iran (from 2.04 million b/d to 2.30 million b/d), Iraq (1.88 million b/d to 2.3 million b/d), and the U.A.E. (1.31 million b/d to 1.42 million b/d). OPEC's total crude oil exports fell by 2.4% from 12.78 million b/d in 1986 to 12.01 million b/d in 1987 (Fig. 7). Within OPEC's share in proven world gas reserves previously set forth, Iran had the highest individual reserves of 14 tcm, followed by the U.A.E. (5.41 trillion), Qatar (4.44 trillion), and Saudi Arabia (4.13 trillion).

A remarkable news has just come to Aramco's irrevocable participation through Aramco Services Co. (ASC) in Houston, acting on behalf of Saudi Arabia, in an $800million oil refining enterprise with Texaco, the third largest U.S. oil company to refine crude oil, and distribute and market refined petroleum products in 33 U.S. states in the eastern and Gulf coast regions. Saudi Arabia will supply 600,000 b/d of crude oil to the new company, in which it will have a 50% share. This 50-50 partnership will give Saudi Arabia, the world's largest oil exporter, access to the world's largest retail gasoline market. The agreement with Texaco was signed on November 10, 1988. Saudi refining, Inc., became a partner in the U.S.based venture. Crude oil marketing services were provided by Aramco on behalf of Saudi Arabia through new offices established in Houston, New York, and London to facilitate the sale and delivery of crude oil to major customers in North and South America, and Europe. Aramco is warranted to handle the marketing of crude oil and gas in the kingdom, and to syllogize bonds for sales with major domestic patrons.

Abu Dhabi, the biggest producer in the U.A.E., is also diverting its overseas investments to the oil sector. The French Total oil company reported that Abu Dhabi's shares in the firm have reached 9% in 1988. Abu Dhabi also has a 10% stake in Spanish refining and petrochemical concern Cepsa and was planning to raise it to 15% in 1988.

PETROLEUM ORIGIN

The ample confluence of big oil fields in the Middle East have been discovered and developed from the north end of the Arabian Gulf across 450 mi. to Dubai, on the Trucial Coast (Fig. 1,6). Due to the fact that many of these fields have oil reserves in the billions of barrels and cubic foot reserves of associated and non-associated gas in the trillions, understanding the reasons for the great accumulations will aid in exploring most of the area between NW Iraq and the Arabian Gulf, and other territories that have never been explored.

The large volume of hydrocarbons in the area may originate from the following circumstances:

Most oil and gas (petroleum) in the Arabian Gulf region are presumed to have accrued following crustal convergence between continental margins. The Arabian plate was dragged downward under the Zagros suture belt resolving the hydrocarbons from the offshore source rocks into the dipping formations forming reservoirs over the platform margin. The heat rise from sea-floor spreading is presumed to have accelerated the process of transition from clastic shale to neritic Asmari limestone.

The prolonged unbroken deposition while the area was progressively subsiding to the northeast was coupled with hardly any breaks or faulting.

The downwarping along the coastal plains yielded a commensurate thickness of sedimentary rocks for the occurrence and concealment of large deposits of oil and gas. This thick stratigraphic section is composed of sediments rich in organic material (source rock) mainly banded evaporate and shale cap rocks of infinite thickness rotating with rocks enclosing sufficient porosity and permeability to act as reservoirs.

The abundance of fine grained marine deposits that were chiefly lodged under reducing conditions may provide potential source rocks and varying promise for entrapping petroleum. The very large folds most likely evolved during and in the van of migration.

HYBRID FORECASTING MODEL

A hydrid model generally has a two-stage history: (1) a deterministic blueprint effected by knowledge of all the inputs and outputs in advance, and (2) a stochastic optimization design contrived by a probabilistic simulation in which predications are founded on relatively probabilities of a set of possible outcomes, i.e., governed by the laws of chance.

A deterministic model idealizes a long-term relationship between dependent and independent variables such as oilfield sizes and progression of discoveries and over reiterated testings or time series spans.

Petroleum production in the Arabian Gulf province has increased significantly during this year with new concessions granted in some countries, drilling and seismic operations on the rise, unused localities in mature regions prospected for the first time, and considerable reserve gains acclaimed everywhere. Due to the steady expansion and surge in petroleum activities, upgrading in production capacity, and enhanced development of the existing fields, the economic incentives have increased, and exploratory interest in the area remains high. Hot plays and intense drilling activities in deep Paleozoic formations and the Precambrian section have been provoked in the Gulf states by the discovery of a new oil field at a depth of 6,300 in Paleozoic strata, on June 3, 1989, marking the first oil discovery since restructuring Aramco. The high reserves and production of the Arabian Gulf states act as a pivot in the petroleum world which give them a carte blanche to avert OPEC's control over oil prices and supply. The oil-producers' cartel is in a peck of trouble because non-OPEC oil production is towering even as oil demand sags (Fig. 7A). Oil prices have slithered by $3 since April's peak. In November, 1988 the price lapsed at $12 before the cartel consented on new oil-output quotas. Total OPEC output in July has run sparely above 21 million barrels daily, as it did in June rather than showing an expected decline. Oil prices have abated a dollar a barrel in the past week because some OPEC states are still flouting output quotas despite sleazy summer demand for petrol in Europe and the United States. The record of OPEC's production strategy showed that the prices doubled in 1979. Between 1979 and 1985 demand for oil in the non-communist world fell by 11%. The only way for OPEC to bolster prices was by output quotas which were first exercised in March, 1982, and have been amended four times ever since. A time series correlation of OPEC's quotas with its actual output predicts a direct relationship on a long-term basis. OPEC's positive performance looms attendant to a deterministic planning order. Oil demand in the free world is expected to hit a 10-year high in 1989. Demand in the entire non-communist world is projected to vault to 51.1 million barrels per day from an estimated 50.3 million barrels per day in 1988. The rate of growth, however, should overturn to about 1.7% from an oddly high 2.5% in 1988. Over-production conserved a low average since 1984 mounting to 196,000 barrels per day in 1987-88 which stood for 1% of OPEC's total quota. A stochastic stabilization degree may optimize the evolution of a set of transition probabilities for outcomes of specific plays and prospects of Inputs and outputs to determine the "goodness-of-fit" at each interval (At-change from one period or stage to the next). Using the relationship between oil prices and demand, and actual oil production and consumption between 1985 and 1989, from the first equation (i.e. demand inimical to price), it is explicable that the recent decline in energy consumption is a short term surprise and that demand will sprout to an average of 2.8% per year through the year 2000. This forecasts and relatively co-measurable ones may reassert OPEC's production tactics designed to qualify its production ceiling to 20 m b/d and $20 a barrel benchmark price. OPEC may insure a sliding scale for a target price range (e.g., $16 to $20) for a "reference" crude oil (Mabro, 1989).

When prices dislodge from the range, the cartel must harmonize the output quotas within the standard deviation from the average of the revised quotas perhaps within 3%. The standard deviation which is an index of precision and a measure of "dispersion" about the mean, may be calculated by:

[SEE FORMULA]

where s = the standard deviation and xi is the deviation of each output quota from the average of the revised quotas. N - 1 is the number of revised output quotas minus one. Because the mean is fixed, the number of degrees of freedom diminishes by one.

CONCLUSIONS

The veritable determinant in musing the petroleum possibilities of the Arabian Gulf region and the future of oil industry props on an absolute deterministic control by scientific analysis of conditions of petroleum accumulation and preservation on a longterm basis and a relative stochastic optimization overture on a short term proviso. The application of mathematical probability models is imperative because petroleum activity is an innately probabilistic endeavor. This divided control scheme is converted into a newer combination or hybrid model.

The vast concourse of great oil fields in the area is due to plate tectonics. The Arabian Gulf province is being compressed between the Arabian and Iranian (Persian) plates creating large structural traps. The zones of compression are substantiated by thrust and reverse faults, as well as nappe structures.

The oil-producing horizons occur at comparatively shallow drilling depths. Deeper Paleozoic targets are being demodulated over the entire GCC states after the wildcat Hawtah No. 1 tagged a new oil field in Saudi Arabia by midyear.

ACKNOWLEDGMENT

This paper was selected for oral presentation during the 28 th International Geological Congress, 1989, held in Washington, D.C., at the Colloquium #6, in session on "World exploration and development opportunities for oil and gas." The work was ratified by Kind Saud University. This is a protraction of previous technical program presentations on the petroleum geology of the Arabian Gulf area at the AAPG annual meetings in Washington and Calgary that were sponsored by King Saud University. The former introductory study was exhilarated by a resident postdoctoral fellowship at Scripps Institution of Oceanography, University of California, San Diego, La Jolla, Calif., and a visiting professorship at Harvard University, Cambridge, Mass.