THE END OF THE OIL GIANTS: And What It Means
Recently, Saudi Aramco, the world largest oil exporter, has acknowledged that Ghawar, the world largest oil field, is in decline. The news went mostly unnoticed except in the specialised media. OK, so the Saudi have a bit of bother, so what? In fact, this piece of news is extremely important. Previously the oil world had been led to believe that Ghawar was producing over 5 Million barrels/day (Mb/d).[1] As part of its fund-raising, Aramco has disclosed that it is in fact down to 3.8Mb/d.
THE END OF THE OIL GIANTS: And What It Means
GUEST POST: By Dr. Louis Arnoux
The meaning of this news snippet takes a bit of explaining. What the specialised media did not emphasise is what follows:
When giant oil fields go into decline, they usually decline abruptly. Ghawar’s decline is ominous. It was discovered in 1948 and until recently represented about 50% of the oil crude production of the Kingdom of Saudi Arabia (KSA). Ghawar is representative of some 100 to 200 giant oil fields. Most of them are old. The most recently discovered giants are of a diminutive size compared with those old giants.[2]
Giants represent about 1% of the total number of oil fields and yet produce over 60% of conventional oil crude.[3]Very few real giants have been discovered in recent years. The geology of the planet is now known well enough and prospects for new significant giant oil discoveries are known to be low. In recent decades, discoveries of smaller oil fields have not been able to compensate for the eventual loss of the giants. Figure 1 illustrates the matter. It shows the net flux of addition to reserves per year (additional volumes less volumes used).
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