Guardian UK: US fears Saudi oil may have been overstated by 40%

[marmar]

from the Guardian UK:



The US fears that Saudi Arabia, the world's largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.

The revelation comes as the oil price has soared in recent weeks to more than $100 a barrel on global demand and tensions in the Middle East. Many analysts expect that the Saudis and their Opec cartel partners would pump more oil if rising prices threatened to choke off demand.

However, Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, met the US consul general in Riyadh in November 2007 and told the US diplomat that Aramco's 12.5m barrel-a-day capacity needed to keep a lid on prices could not be reached. ...........(more)

The complete piece is at: http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks

[neverforget]

1. Duh, they've pumping oil for decades so it's going to go dry eventually

[Statistical]

2. When oil hit peak of $146 in 2008 every OPEC nation was cheating like crazy.

Every nation except Saudia Arabia. Each nation is given an export quota but with prices that high people were cheating the quotas by 10%, 20%, sometimes even 30% to maximize the amount of oil they sold at $146 before it crashed.

The Saudi didn't even meet their quota. Why would that be? They couldn't. They couldn't expand their production because they have been inflating their reserve and production capacity numbers for years. They were redlining and couldn't even meet their quota.

[GliderGuider]

4. How do you explain this, then?

There is no evidence whatsoever of any additional oil being pumped in 2008. Everybody should have been flocking to cash in, not just OPEC. Instead there was nothing. I wonder why?

Actually, I don't wonder why. The taps are open as wide as they can be, pretty much everywhere. We're pumping every drop we can get. Production peaked in 2005 and hasn't budged in over 5 years. Trying to pump more crude is Bleak Toil.

[DURHAM D]

3. Hasn't this been common knowledge since like 2004-05? nt

[shireen]

5. that's what i thought too ...

surrpriseee!

[Skink]

6. Those Iraqis better get off our oil.

[rhett o rick]

7. lol 40%. And no one figured it out. That's a hell of an error. nm

[Raster]

10. It was NOT an error. It was a deliberate lie.

Proved Saudi reserve figures have been a state secret of the Kingdom for years.

[rhett o rick]

12. So the Saudi's are the only ones that can predict how much reserves they have? I doubt it. nm

[Raster]

13. Other geologists not associated with the Saudi government can ESTIMATE Saudi reserves,

...but unless they are allowed access to Saudi geological records it is a "best guess" scenario.

http://www.iags.org/n0331043.htm

"Analyzing Saudi Arabia's capacity is not an easy task. Saudi Aramco, the state-owned oil company, has not provided production data for more than two decades. OPEC, the IEA and EIA data systems shed little light on what underlies Saudi sand. "Their predictive track record has been awful. In the land of the blind, reliable OPEC data is either untrusted or non-existent " Simmons said. Simmons calls for a new era of true energy transparency. "The IEA should roll up their sleeves and work to obtain far better demand and cost data and far better decline data for non-OPEC oil. OPEC should provide field by field production and well-by-well data, budget details and third party engineering reports." "

http://www.cnbc.com/id/25281491/Saudi_s_Oil_Fields_on_Viagra

"But actual Saudi production levels are state secrets, or as Simmons says officials are “as silent as the Mafia.” But there is precious little transparency anywhere in the region. Reserves for all OPEC countries are believed to be overstated because they are the basis for determining each cartel member’s export quota. "

[JDPriestly]

8. Peak oil in the not very distant future (maybe 2012-2019) was

predicted years ago. It has come a little early because of the unexpected rise in demand thanks to development in the third world.

This is why we need to put more government money into the development of alternative energy.

[nadinbrzezinski]

9. Some analysts put it as far back as 2009

http://www.energybulletin.net/node/45940

[Statistical]

11. Nice article. Thanks.