Monday, May 26, 2008

The Illusion of Vast Undeveloped U.S. Oil Resources

The claim of vast US reserves just waiting to be exploited offshore is really just an illusion. Sort of like financing your retirement on coins that have fallen between the cushions of your couch. From ASPO:

The Illusion of Vast Undeveloped U.S. Oil Resources

Khursaniyah Still Cursed

The Khursaniyah project in Saudi Arabia is still not producing oil, and it is about six months behind schedule. This after they claimed just a few weeks ago to have already started. The finger is being pointed at the gas plant:
"The gas plant is a major delay. It's really a disappointment," Falih said. "All of it will be ready in a few months." Aramco could bring on most of Khursaniyah's capacity if needed, Falih said. But gas would have to be burnt off, which Aramco wanted to avoid, he added.The field produces light crude, and Falih said Aramco had seen little increased demand for that type of oil from its customers. Most recent demand growth was for medium and heavy grades, he added.Saudi Arabia boosted crude output of 300,000 bpd earlier this month and is targeting total output of 9.45 million bpd in June. That increment came from several fields including Ghawar and Safaniyah, Falih said.
Nobody wants the light crude? But doesn't Ghawar product light crude? And if the demand is for heavier crudes, why do they want to build a refinery for it? And what is their current spare capacity? If it was 2 million barrels per day when they did/did not start a few weeks ago, what is it now? What they really should do is stop using round numbers. They should use the strategy recommended for selling other products and claim a spare capacity of 1,999,999 bpd. There, I believe it already.

Anyway, the poor beleagered co-contractors for the gas plant, Bechtel and Technip, are not in a good position to defend themselves. But if they want to get their side of the story out, I'll give them a voice.