Monday, June 30, 2008
Media Delusion: Giant Saudi field is key to boosting oil output
KHURAIS OIL FIELD, Saudi Arabia (AP) -- This massive oil field surrounded by the desolate sands of Saudi Arabia's vast eastern desert feels like the middle of nowhere.
But what happens over the next year at Khurais, one of Saudi Arabia's last undeveloped giant oil fields, could hold the key to what drivers will pay at the pump for years to come.
NVDL: They're hoping this massive oil field will be able to pump an extra 1.2 million barrels per day. In China, oil consumption is rising almost vertically. 2007 consumption in China was 347 million tons, ie 7mb/d, and continues to increase. It's ridiculous this psychology where one or two biggish fields are hailed as solutions when many more even bigger fields are depleting rapidly, and net consumption (global demand) is increasing, again, thanks to China.
From The Oil Drum: As discussed on Casey Research, China is enjoying staggering growth rates for car ownership.
Assuming that the 7.3 million new car owners in 2008 each drive 5,000 miles a year, and they achieve 40 miles per gallon, the result would be an additional 45.6 million barrels of crude demand, equivalent to 125,000 bbl/day. In other words, new Chinese drivers will devour 25-30% of the recently promised Saudi production increase in a single year.
NVDL: Regarding these 'new discoveries', they need to more than just make up for high demand levels, they have to offset global depletion, for example from giants like Cantarell in Mexico (see above), and Saudi's own Ghawar, now more than 60 years old.