Just eight weeks ago, the question on every oil spectator’s mind was could Saudi Arabia recover to pre-Abqaiq attack production levels in a reasonable period, and would the region be embroiled in a wider war between Saudi Arabia and Iran, the presumed source of the attack. Okay, that’s two questions, neither of which seems particularly timely at present.
Iran’s announcement of a fifty-one billion barrel oil field was, needless to say, exciting although it comes with a number of caveats. First, the reported amount is oil in place, not reserves, meaning that the likely proved reserves are going to be on the order of ten to fifteen billion barrels, depending on the recovery rate. Still, that’s ten to fifteen billion barrels more than Grandpa Lynch found in West Virginia back in the day.
The size puts it in a class with supergiants like Kashagan in Kazakhstan and Shaybah in Saudi Arabia, each of which produces 1 million barrels per day. That’s a lot of oil, or perhaps more precisely, potential oil, and it suggests that other OPEC members must be happy to see the Trump Administration’s efforts to keep Iranian oil off the market.
But this also demonstrates one major flaw behind peak oil analysis done by Colin Campbell and Jean Laherrere, authors of the historic article “The End of Cheap Oil,” in the March 1998 Scientific American. In that article, they argued that creating creaming curves of discoveries (as in the figure below) allowed them to estimate total recoverable resources in any given region. (Creaming curves represent the size of discoveries, which theoretically occur largest to smallest, and demonstrate the point at which no more significant discoveries remain.)
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