Saudi Aramco Now Planning to Add Additional Capacity to Maintain Capacity at 12.5 MMBbl/D

Saudi Aramco’s Chief Excuative Officer Klalid Al Falih recently announced new expansion projects at Khurais of 300,000 barrels per day and 250,000 barrels per day at Shaybah.  In 2014 Saudi Aramco will complete there 900,000 barrels per day Manifa heavy oil project. For details see the attached Bloomberg report.

http://www.bloomberg.com/news/2013-10-14/saudi-aramco-seeks-to-extend-oilfield-life-with-expansion-plans.html

According to recent unofficial estimates Saudi rig count is now around 170 rigs growing to ove 200 rigs next year

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Saudi Crude Production Level in August Rasied to all Time High 10.2 MM Bbl/Day

From  various sources including the Financial times this last week I have learned that the Saudi’s responding to various world oil shortage and cutbacks have stepped up their own production to help hold down world oil prices.  Part of the production increase has come from the planned Manifa heavy oil increment which is is now partially completed.  When it is fully completed it will add 900,000 bbl/day of capacity by 2014 but Saudi Capacity should still be in the 12.0 to 12.5 MM Bbl per bbl day range.

While little has been reported in the international press loss of some 1.4 MM Bbl/d of export capacity from Libya coupled with the 0.9 MMBbl/d loss of export capacity from Iran due to the sanctions has put a lot lof stress on the crude oil supply system even with the increasing U. S. domestic supply from shale oil drilling.

Further increases of Saudi production to offset the Libyan shortfall are doubtful in my opinion because of the different types of crude available.

Of course the Syria situation also adds a whole new unkown into an allready complex situation which is far from resolved.

Over the week WTI  Prices have drifted from $107 to $102/Bbl  as the Syria bombing threat lessened but  the turmoil in the oil markets has  not gone away.  Brent is running about $5.00/Bbl higher.

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New Oil Shale Production in Texas EagleFord and Dakato Bakken Causing Rethinking about Oil Supply Around the Globe

Thank goodness for shale oil, with nearly 2 million of new U S, supply Saudi Arabia is still the only country in the world with any surplus oil capacity.  Thanks to the new technolgy, ie horizontal drilling and multi stage fracs shale oil at todays prices of $90 plus/ barrel appears to be ecoomonic to develop.   Think where we would be if this technology had not come along. The following two articles are a good summary of the Eagle Ford and Bakken developments and this technology  on the thiinking even in Russia

 http://www.reuters.com/article/2013/06/27/eia-texas-idUSL2N0F31ES20130627

http://www.economist.com/news/business/21580131-shale-gas-revolution-unnerves-russian-state-capitalism-spooked-shale

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President Obama Needs to Read Latest Dr. David Whitehouse Paper on Global Warming Standstill

The article prepared Dr. David Whitehouse entitled “The Global Warming Standstill” needs to be read and understood by all of those who are planning for America’s Energy future based on global warming caused by rising levels of CO2 in the atomosphere.  Seems the recent years temperatures have not followed the increasing model trends and infact for the most of the last decade have been flat to down.  Dr. Whitehouse paper(PDF) has a good executive summary, the entire paper 60+ pages can be found at

http://www.thegwpf.org/content/uploads/2013/03/Whitehouse-GT_Standstill.pdf

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Update On The World Energy Dilemma Prepared–Available for Presentations

This time last year I was working hard to get  my final changes to the text sent to my publisher PennWell.  This last month I have prepared a new talk 35-40 minutes with about 30 charts to explain where our industry has progressed since then.  It is not a rehash of the book but many of my conclusions are the same.  Saudi Arabia, and the middle east is still the key to our energy future inspite of our successful development of shale reserves in this country.

I am prepared to give this talk and keep it up to date for the next few months.  My fee is $300 per presentation plus expenses.  Look forward to hearing from you.  Charts will be made available to you  in eletronic format or I can bring hardcopy booklets at my cost.

Please contact me at p8106@aol.com Lou Powers

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Analysis– Saudi Arabia Energy Profile Update-U. S. EIA Published Saudi-US Relations Informations Service

This rather detail report was recently published by the SUSRIS organsation that promotes Saud-US relations and I thought my readers would appreciate having a copy for your file.

http://www.susris.com/2013/02/12/analysis-saudi-
-energy-profile-update-u-s-eia/

 

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Saudi Crude Oil Internal Consumption a Problem???

With internal consumption of crude oil and refined products growing at 7% a year and a long range goal to maintain production levels not to exceed the 10  million bbls/d of crude the long range planners relalize they have a problem.  Based on consumption of 3 million bbls/d and a 7 % demand growth in 20 years the Saudi consumption in 20 years computes to be 11.6 million bbls/d of crude oil and natural gas liquids.  Something has to give.  For years Saudi Arabia has subsidized gasoline.  For example in March 2011 when ” The  World Energy Dilemma was being prepared the price of gasoline in Saudi Arabia was $0.85/gal versus $3.70 /gal in the USA and $9.00 per gallon in the Norway.  Many times doing away with these types of subsidies has caused unrest.  It is not a problem that is not recognized in Saudi Arabia as the attached link describes.

http://in.reuters.com/article/2013/05/07/saudi-energy-subsidies-idINL6N0DO12P20130507

Saudi Arabia has launched large investments in solor and is planning to invest billions of dollars in nuclear power down the road to reduce oil consumption to generate electric power.  Whether these investments will come on line in time to avoid a problem down the road is a question.

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Sometimes the Middle East Head Lines are a Little Confusing.

According to Platts recent report the Saudi’s never did cut back to 9 million barrels per day so increaseing to 9.3 million barrels per day is not much of a big deal as the Fuel Fix article link attached suggests.

http://fuelfix.com/blog/2013/05/10/opec-crude-production-rises-to-five-month-high-on-saudi-increase/

Shown here is Platts estimates of Saudi Production sincce their cut back in November of last year:

Nov 9.82 Dec 9.45, Jan 9.25, Feb,9.20, 9.20, and April, 9.30  Assuming the Platts numbers are correct one needs to be aware of the headlines and what they really mean.  The Platts report was May 14, 2013.

 

 

 

 

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Saudi Crude Exports at Seven Year High in 2012

Saudi Arabia exports of crude were at a seven year high in 2012 as reported by Bloomberg News recently.  Yet Saudi Aramco did cut production in December 2012 and have continued that cut through January according to later reports.

http://www.bloomberg.com/news/2013-02-18/saudi-crude-exports-for-2012-reached-seven-year-high-data-show.html

 

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What is President Obama Waiting on Now?? It is Time to Approve the XL Pipeline before the USA Loses the Opportunity

Now that the Governor of Nebraska has okayed the alternate pipeline route through Nebraska and the State Department has approved the XL Pipeline from an enviormental threat standpoint what is our president waiting on?  What about the several thousand jobs the pipeline will create?  Are they not important in this time of unemployment.

http://www.newsmax.com/Newsfront/keystone-xl-oil-pipeline/2013/03/02/id/492763?s=al&promo_code=12A5B-1

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