The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed
Comment of the Day

April 02 2019

Commentary by Eoin Treacy

The Biggest Saudi Oil Field Is Fading Faster Than Anyone Guessed

This article by Javier Blas for Bloomberg may be of interest to subscribers. Here is a section:

The new maximum production rate for Ghawar means that the Permian in the U.S., which pumped 4.1 million barrels a day last month according to government data, is already the largest oil production basin. The comparison isn’t exact -- the Saudi field is a conventional reservoir, while the Permian is an unconventional shale formation -- yet it shows the shifting balance of power in the market.

Ghawar is so important for Saudi Arabia because the field has "accounted for more than half of the total cumulative crude oil production in the kingdom," according to the bond prospectus. The country has been pumping since the discovery of the Dammam No. 7 well in 1938.

On top of Ghawar, which was found in 1948 by an American geologist, Saudi Arabia relies heavily on two other mega-fields: Khurais, which was discovered in 1957, and can pump 1.45 million barrels a day, and Safaniyah, found in 1951 and still today the world’s largest offshore oil field with capacity of 1.3 million. In total, Aramco operates 101 oilfields.

Eoin Treacy's view

A lot of what Saudi Arabia is producing today is heavy oil and coupled with Venezuelan production that has boosted refining capacity for high sulphur blends. That transition is reflective of the changing production profile of the Saudi Arabia’s fields even as it continues to sustain the ability to produce up to 12 million barrels a day.

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