Saudi Oil Output Sets Record Despite Global Glut

[thackney]

Saudi Oil Output Sets Record Despite Global Glut
http://www.nasdaq.com/article/saudi-oil-output-sets-record-despite-global-glut-20160810-00354
August 10, 2016

Saudi Arabia's oil output hit an all-time high in July, OPEC said Wednesday, feeding a glut that has oil prices in a two-year slump.

Top oil exporter Saudi Arabia told OPEC that its July crude production hit a record of 10.67 million barrels as it meets seasonally higher domestic demand and focuses on maintaining market share rather than trimming supply to boost prices.

According to figures submitted by the kingdom to the Organization of the Petroleum Exporting Countries, its previous production high was 10.56 million barrels a day in June 2015.

Saudi Arabia is one of a handful of countries that still burns crude oil for electricity because of gas shortages. It used nearly 600,000 barrels a day of crude for electricity last year, peaking at about 900,000 barrels during the hot summer months.

The kingdom has to keep output flowing as it competes for its share of the export market with a host of rivals. They include an Iran now resurgent after the end to sanctions, a Russia pumping near record levels and a U.S. that began selling crude abroad for the first time in 40 years....

#energy

[IsailedawayfromFR]

Saudi Oil Output Sets Record Despite Global Glut
http://www.nasdaq.com/article/saudi-oil-output-sets-record-despite-global-glut-20160810-00354
August 10, 2016

Saudi Arabia's oil output hit an all-time high in July, OPEC said Wednesday, feeding a glut that has oil prices in a two-year slump.

Top oil exporter Saudi Arabia told OPEC that its July crude production hit a record of 10.67 million barrels as it meets seasonally higher domestic demand and focuses on maintaining market share rather than trimming supply to boost prices.

According to figures submitted by the kingdom to the Organization of the Petroleum Exporting Countries, its previous production high was 10.56 million barrels a day in June 2015.

Saudi Arabia is one of a handful of countries that still burns crude oil for electricity because of gas shortages. It used nearly 600,000 barrels a day of crude for electricity last year, peaking at about 900,000 barrels during the hot summer months.

The kingdom has to keep output flowing as it competes for its share of the export market with a host of rivals. They include an Iran now resurgent after the end to sanctions, a Russia pumping near record levels and a U.S. that began selling crude abroad for the first time in 40 years....

#energy

They likely have not hit the top as yet.  I did not know they still burned such an amount of oil.  I worked the Indonesia Duri field Steamflood and at one time they burned 60,000 bopd just to generate the steam for it.  They finally switched fully over the natural gas which saved a lot of oil from export, as well improved emissions.

Saudi has massive oil fields.  One of the lessons I learned during my many years in industry was that the larger the oil field, the larger underestimation of ultimate recovery.  Another way to say it is that the bigger will get even bigger. 

I see more upside than downside for their future.

[thackney]

They likely have not hit the top as yet.  I did not know they still burned such an amount of oil.  I worked the Indonesia Duri field Steamflood and at one time they burned 60,000 bopd just to generate the steam for it.  They finally switched fully over the natural gas which saved a lot of oil from export, as well improved emissions.

Saudi has massive oil fields.  One of the lessons I learned during my many years in industry was that the larger the oil field, the larger underestimation of ultimate recovery.  Another way to say it is that the bigger will get even bigger. 

I see more upside than downside for their future.

The Saudi attempts to produce enough Natural Gas to replace their oil burning electrical power has as yet been very insufficient.  The work to make significant extra effort to expand that has been ongoing for at least a decade and a half.  It was the reason my wife and I were in the Aramco towers, going through orientation to move to Saudi, Sept 11, 2001.

[IsailedawayfromFR]

I did some exploratory work around the area and I recall the Khuff formation was a principle gas source.  It was deep, rather low perm and sour.

Not the best source of gas unless you really need it.

Sounds like they really need it now, but my suspicion is that they already use massive amounts for desalinization.

[IsailedawayfromFR]

The Saudi attempts to produce enough Natural Gas to replace their oil burning electrical power has as yet been very insufficient.  The work to make significant extra effort to expand that has been ongoing for at least a decade and a half.  It was the reason my wife and I were in the Aramco towers, going through orientation to move to Saudi, Sept 11, 2001.

Oh, and I forgot to ask:  Do you think that Aramco is not making more gas due to you not coming onto the scene to help out? (tongue in cheek)