Gulf Oil Resources

[tfrasheed]

Gulf Oil Resources

With reference to the recent discussion of the Forbes Magazine article on
probable Gulf oil resources being grossly exaggerated, I found information
published by the United States Geological Survey rather disturbing. The
USGS survey dates from2001.
http://certmapper.cr.usgs.gov/rooms/we/index.jsp.

The assessments show the following:

Estimated Mean recoverable oil reserves:

Kuwait. 3.839 billion barrels. Saudi Arabia: 87.092 billion. Iraq:
45.099 billionUnited Arab Emirates: 7.695 billionQatar 3.617 billionOman
3.451 billionIran 53.114 billion

Total estimated mean recoverable reserves circa 2001 for the Persian Gulf
Region: 205,907 million barrels.

Next year is 2011, what then are the current reserves according toUSGS
survey?

Kuwait should be close to running dry. The Saudis should be at50 billion.
Overall, these reserves estimates suggest only 100-150 billion barrels of
oil are left in the Persian Gulf.

Is the USGS wrong? The usual estimates found on websites isthat there are
over 700 billion in recoverable oil reserves in theGulf. See
http://hormuz.robertstrausscenter.org/PG_oil. But what isthe source of
this estimate? Is it based on public domain scientificassessments or
merely the announcements of national governments? The USGS is a scientific
organization and the 205 billion is current data from their
website.Potential undiscovered oil in the Middle East and North Africa is
estimated at 229 billion
barrels:http://certmapper.cr.usgs.gov/data/w...ent_update.pdf

That still leaves the world which is consuming 25 billion barrels of oil a
yearvery short on Gulf oil. If this is true the economic consequences in
the nearterm appear very serious.

In January, the USGS estimated that Venezuela did have 500 billion barrels
ofheavy crude in the Orinoco basin. See:
http://pubs.usgs.gov/fs/2009/3028/pd...-3028.pdfThere are also massive

reserves of unconventional hydrocarbons in NorthAmerica including in the
Gulf of Mexico. However, these sources need tobe developed. It would take
years or perhaps decades to replace currentthe more than 20 million
barrels of oil produced by the Persian Gulf.

[tfrasheed]

Hydrocarbons: How Much is Enough?

How Much is Enough?

http:\\eurasianenergyanalysis.blogspot.com

In their magisterial report BP Statistical Review of World Energy 2010, BP
documents that in 2009 world primary energy consumption (oil, natural gas,
coal, nuclear and hydropower) declined 1.1%, the largest decline since
1980. This included a 1.7% decline in global oil consumption (1.2 million
bpd, the largest decline since 1982); and, for the first time on record, a
decline of 2.1% in natural gas consumption. As one would anticipate, not
all areas declined at the same rate. In fact, Chinese energy consumption
increased 8.7%. Indian consumption of natural gas increased 25.9%! Liquid
Natural Gas (LNG) now accounts for 30.5% of all natural gas traded in the
world.

Where does this energy come from? The Middle East continues to be the source
of most of the world's energy. It holds 56.6% of the world's proved reserves
of crude oil, and 40.6% of the world's proved reserves in natural gas. 2009
proved oil reserves, as percentages of world oil reserves, can be ranked as
follows:
Middle East 56.6%
South and Central America (not including Mexico) 14.9%
Europe and Eurasia 10.3%
Africa (including North African countries of Egypt, Algeria and Tunisia)
9.6%
North America (U.S., Canada, Mexico) 5.5%
Asia Pacific (including India and China) 3.2%

The oil reserves do not match easily with 2009 oil consumption patterns:
Asia Pacific 31.1%
North America 26.4%
Europe and Eurasia 23.5%
Middle East 8.7%
South and Central America 6.6%
Africa 3.7%

Natural Gas tells a similar, but not identical, story. First, the 2009
proved reserves:
Middle East 40.6%
Europe and Eurasia 33.7%
Asia Pacific 8.7%
Africa 7.9%
North America 4.9%
South and Central America 4.3%

2009 Consumption
Europe and Eurasia 35.9%
North America 27.8%
Asia Pacific 16.8%
Middle East 11.7%
South and Central America 4.6%
Africa 3.4%

Among regions of "developed" economies, North America is most out of
balance with the rapidly developing economies of China and India closing
rapidly. The most balanced area, in the aggregate, appears to be Europe
and Eurasia. This is a false impression, given that the distribution of
oil and gas is not uniform throughout the region. Russia holds 5.6% of the
world's proved reserves, and Kazakhstan has 3%. Azerbaijan and Norway tie
at 0.5%. The economies of France, Germany, Spain, etc. don't even make the
listing. In natural gas, Russia has 23.7% of the world's proved reserves,
followed by Turkmenistan (4.3%), Norway (1.1%), Kazakhstan (1.0%), and
Azerbaijan (0.7%). As in the case of oil, most of Western Europe is
included under the rubric "other."

One most also be cautious in describing the "oil and gas-rich Middle
East," as well. Most of these hydrocarbon deposits are found in the
littoral states of the Persian Gulf, but not in equal quantities. Saudi
Arabia has the largest share of the world's proved oil reserves, at 19.8%;
the Kingdom is followed by Iran (10.3%), Iraq (8.6%), Kuwait (7.6%)United
Arab Emirates (7.3%), and Qatar (2.0%). The formerly important oil
producer of Bahrain is no longer on the list. In natural gas, the proved
reserves are held by Iran (15.8%), Qatar (13.5%), Saudi Arabia (4.2%) and
Yemen (3.4%).

The 2009 drop in oil consumption was met by a drop in OPEC production, so
OPEC continues to provide the swing capacity needed to moderate world oil
prices. Gas prices are not as flexible, since approximately 70% of natural
gas is still delivered via pipeline and long-term delivery contracts.
While Russia and the other Eurasian countries do not hold the same levels
of reserves as the Middle East, they remain a major source of hydrocarbons
for the world's economies.

[tfrasheed]

Apparently USGS mislabeled some of their data. They have Saudioil reserves
at 87 billion but reading the data tables one discoversthat is mean
estimated "undiscovered" oil. Examining the variousgeologic zones the
USGS uses, I came up with about 665 billionbarrels of "future oil" for the
Gulf Region in the year 2000. Futureoil is the total estimated "endowment"
of oil minus cumulative oilconsumption. Since this number is from ten
years ago, totalproven and to be discovered oil in the Persian Gulf should
bewell under 600 billion barrels. Proven reserves should be under500
billion.

The data clearly suggests the potential reserves of up toa trillion
barrels by Saudi Arabia and 300 billion by Iraq arepure fiction. They also
suggest Saudi oil reserves are significantlylower than 265 billion. The
265 billion number is close to theconventional oil in place before large
scale production began inthe middle of the last century.