29 March 2006

Saudi Arabia: the sands run out | EnergyBulletin.net | Peak Oil News Clearinghouse

Saudi Arabia: the sands run out | EnergyBulletin.net | Peak Oil News Clearinghouse: "Even more important than its role as a swing producer in times of crisis is Saudi Arabia’s expected contribution to future oil output. “With one-fourth of the world’s proven oil reserves,” the US department of energy (DoE) observed in 2004, “Saudi Arabia is likely to remain the world’s largest net oil exporter for the foreseeable future” (3). Every assessment released by the DoE indicates that Saudi oil production will continue to grow and that it will play a critical role in satisfying the ever-increasing global demand for petroleum. The DoE predicts that Saudi Arabia will provide over one-quarter of all new oil added to global supplies between 2001 and 2025.

To appreciate fully Saudi Arabia’s pivotal role, it is useful to consult the projections of future supply and demand released each year by the DoE. In 2004 it predicted that world oil demand would rise by 57% between 2001 and 2025, from 77m to 121m barrels per day (mbd). In response to this, Saudi oil output was expected to rise by 120% during this period, from 10.2mbd to 22.5mbd, a net increase of 12.3mbd. No other country or group of countries came close in anticipated growth rates. Russia and the former Soviet republics of the Caspian Sea region have a combined anticipated increase of 8.5mbd; Iran, Iraq, and Kuwait were jointly projected to achieve an increase of 7.6mbd; and Nigeria, the leading producer in Africa, was expected to gain only 1.6mbd. Most other regions were projected to experience declining or stagnant production, so Saudi Arabia’s addition was deemed essential to satisfying anticipated demand (4). But is Saudi Arabia truly capable of increasing its oil output by 12.3mbd - or by any amount at all? This question has stirred"

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