How Much Oil Does Aramco Have?

[Marina Schwarz + 1,576]

Quickly, they're releasing the results of the independent audit later today. Last year "sources" had them at 270 billion barrels. Anyone willing to bet on anything?

[Tom Kirkman + 8,860]

275 Billion.

[Justin Hicks + 162]

I'd say 277 billion ( it's like the price is right 😊 . $200 Bob.....$201 Bob😊)

Anything north of 268 billion barrels is a plus for ARAMCO as estimates tie closely to their 2030 Vision Plan.

[Old-Ruffneck + 1,177]

 

Best guess 'tween 268-275. Probably on the upper end. The Permian has swelled recently too. It's a guessing game at this point in time. 

Edited January 9, 2019 by Old-Ruffneck
removed non essential.

[Justin Hicks + 162]

2 hours ago, Marina Schwarz said:

Quickly, they're releasing the results of the independent audit later today. Last year "sources" had them at 270 billion barrels. Anyone willing to bet on anything?

Speaking of ARAMCO.... Here's perhaps a nice investment opportunity...

https://www.saudiaramco.com/en/news-media/news/2019/leveraging-our-brand

[CMOP + 227]

I'm going to say around 273 - 275. 

[Auson + 123]

Surely it will say whatever they want it to say. So pick the highest believable number.

[Jeffrey Brown + 207]

From the point of view of oil importing countries, the key question is the remaining volume of exportable oil.  A discussion of a case history and Saudi Arabia follows:

Six Country Case History*

*Combined net exports from major net oil exporters, excluding China, that hit or approached zero net oil exports from 1980 to 2010 (Indonesia, UK, Egypt, Vietnam, Argentina, Malaysia).

Annual Net Exports (Gb/year, total petroleum liquids) and ECI Ratio by Year

1995:  1.04 (Gb/year), 1.71 (Ratio of production to consumption)

1996:  1.00, 1.65

1997:  0.95, 1.60

1998:  1.00, 1.64

1999:  0.97, 1.62 (1)

2000:  0.83, 1.50

2001:  0.73, 1.45

2002:  0.67, 1.41

2003:  0.54, 1.32 (2)

2004:  0.37, 1.21

2005:  0.18, 1.10

2006:  0.07, 1.04

2007:  0, 1.00 (3)

(1)  Est. post-1995 Six Country CNE  based on 1995 to 1999 rate of decline in ECI Ratio:

ECI Ratio declined at 1.4%/year, implying that ECI Ratio hits 1.0, and thus zero net exports, around the year 2033.

Est. post-1995 Six Country CNE (based on 1995 to 1999 data) = 1.0 Gb/year (net exports at apparent export peak) X 38 years (est. number of years to zero net exports) X 0.5 (area under a triangle) less 1.0 Gb (net exports at peak) = Approx. 18 Gb

(2) Est. post-1995 CNE at the end of 2003: 7.5 Gb

(3) Actual post-1995 CNE at the end of 2007:  7.3 Gb

 

Saudi Arabia’s Annual Net Exports (Gb/year, total petroleum liquids) and ECI Ratio (ratio of production to consumption) by Year, 2005 to 2017, BP data:

2005:  3.2 (Gb/year), 5.0 (ECI Ratio)

2006:  3.1, 4.7

2007:  2.9, 4.3

2008:  2.9, 4.1

2009:  2.5, 3.3

2010:  2.5, 3.1

2011:  2.8, 3.4

2012:  3.0, 3.4

2013:  2.9, 3.3

2014:  2.8, 3.1

2015:  3.0, 3.1

2016:  3.1, 3.2

2017:  2.9, 3.1

Est. post-2005 Saudi CNE based on 2005 to 2017 rate of decline in ECI Ratio:

ECI Ratio declined at 4.0%/year, implying that ECI Ratio hits 1.0, and thus zero net exports, around the year 2045.

Est. post-2005 Saudi CNE (based on 2005 to 2016 data) = 3.2 Gb/year (net exports at apparent export peak) X 40 years (est. number of years to zero net exports) X 0.5 (area under a triangle) less 3.2 Gb (net exports at peak) = Approx. 60 Gb.

CNE Cumulative Net Exports 2006 to 2017 inclusive were about 35 Gb, implying that Saudi Arabia has already shipped more than half of their estimated post-2005 CNE.

Discussion:

The Six Country Case History, in the time period from 1995 to 1999, and Saudi Arabia, from 2005 to 2016, were both characterized by rising production and rising consumption, with a declining ECI Ratio (ratio of production to consumption) and declining net exports of oil, relative to 1995 and 2005 respectively.

The following chart shows normalized post-1995 values for the Six Countries, through 2002:

http://s1095.photobucket.com/user/westexas/media/Slide1_zpsvcwc848w.jpg.html?sort=3&o=11

Based on the observed initial rates of declines in the respective ECI Ratios (1995 to 1999 for the Six Countries and 2005 to 2017 for Saudi Arabia), Six Country estimated post-1995 CNE (Cumulative Net Exports) were 18 Gb (billon barrels, total petroleum liquids) and Saudi estimated post-2005 CNE were 60 Gb.   In both cases, these extrapolations basically assume a perpetual rate of increase in production.

Of course, Six Country production subsequently fell, after 1999, and post-1995 CNE were only 7.3 Gb, about 40% of what the initial (1995 to 1999) projection showed.  This has obvious implications for remaining Saudi CNE, when the inevitable Saudi production decline kicks in.

There is another interesting similarity between the Six Countries and Saudi Arabia, in regard to the referenced time periods.

Six Country net exports in 1996 were the same as 1999 (2.7 million bpd or about one GB/year).  Saudi net exports in 2006 were the same as 2016 (8.4 million bpd or 3.1 Gb/year).   The crucial difference between 1995 and 2005 and 1999 and 2016 is the rate of depletion in regard to remaining CNE, even though the respective annual volumes were the same.

For example, the Six Countries shipped 14% of actual post-1995 CNE in 1996, and they shipped 24% of remaining actual post-1995 CNE in 1999, even though the respective annual volumes were the same. This is of course an accelerating rate of depletion. In this four year time period (1996 to 1999 inclusive), the Six Counties shipped 54% of actual post-1995 CNE.

Saudi Arabia shipped 5% of estimated post-2005 CNE in 2006, and they shipped 10% of remaining estimated post-2005 CNE in 2016, even though the respective annual volumes were the same, which of course is also an accelerating rate of depletion. In this 11 year time period (2006 to 2016 inclusive), Saudi Arabia shipped about half of estimated post-2005 CNE.

Note that given a finite remaining volume of Saudi CNE, it’s not whether, but to what degree, that we are seeing an accelerating rate of depletion in remaining Saudi CNE.

In any event, it’s important to remember that the actual post-1995 CNE for the Six Countries were only 40% of what the initial estimate showed, using the same methodology that I’m using for Saudi Arabia.

Note that their population increased from 25 million in 2005 to 33 million in 2017, as their total liquids consumption increased from 2.2 million bpd in 2005 to 3.9 million bpd in 2016.  Their net exports fell relative to 2005, even as production increased, because the increase in their consumption outpaced the increase in production.  And note that the ECI Ratio extrapolation for Saudi Arabia in effect assumes a perpetual rate of increase in production.  Given an inevitable production decline, their net export decline rate will really kick into high gear once they see a sustained production decline.  

In any case, if we divide estimated post-2005 CNE at the end of 2005 by 2005 population and estimated remaining post-2005 CNE at the end of 2016 by 2016 population, estimated post-2005 Saudi CNE at the end of 2005 were 2,400 BO per capita and remaining estimated post-2005 CNE at the end of 2016 were 900 BO per capita.  

For the sake of argument, if we assume that the Saudis sell their remaining CNE for about $75 per barrel, they would generate about $70,000 per capita from selling their remaining estimated total volume of CNE.  

Following are links to Six Country and Saudi graphs showing their respective ECI Ratios and annual net exports for 1995 to 2007 and 2005 to 2016 respectively.

Six Country:

http://i1095.photobucket.com/albums/i475/westexas/Six%20Country%20ECINet%20Exports_zpsnac6scbb.jpg

Saudi Arabia:

http://i1095.photobucket.com/albums/i475/westexas/Saudi ECINet Exports_zpsvljb7s8n.jpg

Edited January 11, 2019 by Jeffrey Brown

[Refman + 207]

Let's hope the auditors are more independent than when Arthur Anderson audited Enron

[morris 0]

21 minutes ago, Refman said:

Let's hope the auditors are more independent than when Arthur Anderson audited Enron

Apples and oranges.  This is a reserve "audit" where petroleum engineers estimate future production.  Arthur Anderson was an independent Certified Public Accounting firm attesting to managements financials compliance with generally accepted accounting principles.  Neither of these "audits" is designed to detect management fraud as both rely on management to provide most of the base information they examine.  IMHO Saudi reserves appear to have been grossly overstated for years, but I have no actual data, perhaps they are correct.

[Tom Kirkman + 8,860]

10 hours ago, Marina Schwarz said:

Quickly, they're releasing the results of the independent audit later today. Last year "sources" had them at 270 billion barrels. Anyone willing to bet on anything?

 

10 hours ago, Tom Kirkman said:

275 Billion.

Did I win anything?

Saudi Arabia to announce slight rise in oil, gas reserves after audit: source

 

[Cowpoke + 70]

1 hour ago, Tom Kirkman said:

 

Did I win anything?

Saudi Arabia to announce slight rise in oil, gas reserves after audit: source

 

 

[John Foote + 1,135]

1 hour ago, Tom Kirkman said:

Did I win anything?

Respect of your peers. But you already had that.

[DanilKa + 443]

reserves estimate hasn't changed in years and is closely guarded info. I'd trust assessors no more than I trust rating agencies (remember lady in perforated glasses in the "Big Short" movie?)

Two major uncertainties - Arab D formation in Ghawar is like a Swiss cheese, high porosity, So high - it may not be cored properly at times. This may lead to underestimation of reserves. In addition to best in the world conventional oil, Saudi is blessed with source rock which generated this HC. I've heard Holditch speaking at SPE lunch there suggesting unconventional reserves are at least 4x of conventional. This puts it into trillion bbl territory. But there is an economic side to convert resource to recoverable reserves and Saudi ain't Permian. On a positive note - there is no shortage of sand and seawater treatment facility is good for ~11MM bwpd

[Marina Schwarz + 1,576]

268.5 billion, if I'm reading this fascinating news story correctly. They've gone for believable.

16 hours ago, Justin Hicks said:

I'd say 277 billion ( it's like the price is right 😊 . $200 Bob.....$201 Bob😊)

Anything north of 268 billion barrels is a plus for ARAMCO as estimates tie closely to their 2030 Vision Plan.

We have a winner! Have a barrel.

[Uduak + 22]

5 hours ago, Marina Schwarz said:

268.5 billion, if I'm reading this fascinating news story correctly. They've gone for believable.

We have a winner! Have a barrel.

What do they plan to do with all this oil?

[Marina Schwarz + 1,576]

A goose?

https://www.youtube.com/watch?v=srqcQXvp-Z4

[Refman + 207]

I always forget how reserves are stated, is this the total amount in the reserve or the amount that can be recovered?

[Rodent + 1,424]

17 minutes ago, Refman said:

I always forget how reserves are stated, is this the total amount in the reserve or the amount that can be recovered?

I think it's the amount that can be recovered at current oil prices. 

[Old-Ruffneck + 1,177]

1 hour ago, Rodent said:

I think it's the amount that can be recovered at current oil prices. 

That is correct!! My guesstimate was 268-275 and is probably on upper end just as Permian rose miraculously last month to almost double what is recoverable.  The Saudi's are more tight lipped because they want the investment to look good for many years to come. Just remember though that ya can only keep sucking on that straw(s) for so long  before the bottom of the pool is slurping. Probably won't let American engineers in to determine the true amount. 

Headed to Texas in few....I might log in see whats going on. Peoria to OK City on 150gallon of diesel then refill there as is about the cheapest in nation. Till then.

Edited January 10, 2019 by Old-Ruffneck

[Justin Hicks + 162]

I'd say 277 billion ( it's like the price is right 😊 . $200 Bob.....$201 Bob😊)

Anything north of 268 billion barrels is a plus for ARAMCO as estimates tie closely to their 2030 Vision Plan.

[Tom Kirkman + 8,860]

9 hours ago, Refman said:

I always forget how reserves are stated, is this the total amount in the reserve or the amount that can be recovered?

 

8 hours ago, Rodent said:

I think it's the amount that can be recovered at current oil prices. 

 

8 hours ago, Old-Ruffneck said:

That is correct!! My guesstimate was 268-275 and is probably on upper end just as Permian rose miraculously last month to almost double what is recoverable. 

Here ya go:

https://community.oilprice.com/topic/3219-mike-shellmans-musings-on-cartoon-of-the-week/?tab=comments#comment-20462

... Under the category of “Reserves”, 3Ps are defined as follows:

Proved Reserves: Reserves with 90% certainty of commercial extraction

Probable Reserves: Reserves with 50% certainty of commercial extraction

Possible Reserves: Reserves with 10% certainty of commercial extraction.

[Justin Hicks + 162]

19 hours ago, Marina Schwarz said:

268.5 billion, if I'm reading this fascinating news story correctly. They've gone for believable.

We have a winner! Have a barrel.

If you're giving 55 gallon barrels at 42 gallon prices,  absolutely😊

[William Edwards + 708]

Is anyone interested in the real answer on Saudi reserves? That answer is "enough". The quantity above that is meaningless.

[Jeffrey Brown + 207]

What is the Real Size of the Saudi Oil Reserves? (Pt 1/2)

http://blog.gorozen.com/blog/what-is-the-real-size-of-the-saudi-oil-reserves-pt-1/2

What is the Real Size of the Saudi Oil Reserves? (Pt 2/2)

http://blog.gorozen.com/blog/what-is-the-real-size-of-the-saudi-oil-reserves-pt-2/2

My comments:

Actually, the data suggest that on a net exports basis, after subtracting out rising domestic liquids consumption,  Saudi Arabia has been supply contained since 2005.

Their net exports of total petroleum liquids (BP data base) increased from 7.1 million bpd in 2002 to 8.7 million bpd in 2005, but their net exports have been below the 2005 level for 12 straight years, through 2017, averaging only 7.9 million bpd for 2006 to 2017 inclusive.

Note the large increase in Saudi net exports from 2002 to 2005 as annual Brent crude oil prices approximately doubled from $25 in 2002 to $55 in 2005.

However, as annual Brent crude oil prices doubled again,  from $55 in 2005 to $110 for 2011 to 2013 inclusive, Saudi net exports averaged only 8.0 million bpd during this three year period of triple digit oil prices, versus 8.7 million bpd in 2005.