I have no love for Saudi Arabia.
After all, 15 of the 19 terrorists who attacked the United States on 9/11 were from Saudi Arabia.
Osama Bin Laden is from Saudi Arabia.
According to Nina Shea at National Review:
Saudi textbooks teach, along with many other noxious lessons, that Jews and Christians are “enemies,” and they dogmatically instruct that various groups of “unbelievers” — apostates (which includes Muslim moderates who reject Saudi Wahhabi doctrine), polytheists (which includes Shiites), and Jews — should be killed.
I don’t think anyone disputes this. These textbooks are used in Saudi Arabia and in Saudi-funded schools around the world.
Furthermore, ninety percent of all Muslim schools are funded by the thick wallet of the Saudis.
This still continues to this day, nine years after Towers fell and President Bush said, “You’re either with us, or you’re against us” in his address to Congress in late September 2001.
The Saudis are able to spread their particular brand of religious hatred without repercussion because they have oil.
They are by far the largest oil producing country on the planet.
According to the Oil and Gas Journal:
Saudi Arabia contains approximately 264 billion barrels of proven oil reserves amounting to around one-fifth of proven, conventional world oil reserves.
Although Saudi Arabia has around 100 major oil and gas fields (and more than 1,500 wells), over half of its oil reserves are contained in only eight fields — including the giant 1,260-square mile Ghawar field, the world’s largest oil field, with estimated remaining reserves of 70 billion barrels.
The Ghawar field alone has more proven oil reserves than all but six other countries.
On the production side, Ghawar produces five million barrels a day of Arabian Light Crude. This is more than any country except Russia and the United States.
The Oil and Gas Journal is reporting facts that are put out by the Saudi propaganda machine. These are lies.
The proven reserve numbers have remained constant since the 1980s. The true numbers are a state secret.
There are many oil people who have been speculating that Saudi Arabia is running out of oil — that the Ghawar field, which has been worked hard since the 1950s, is already in decline.
I won’t go into the numbers here, but I would like to point to some odd behavior patterns that suggest the Kingdom is in trouble…
Invite Halliburton to help
Last November, I read this bit of news on the wires:
Halliburton Co. said Friday it received a contract to drill and complete oil wells in Saudi Arabia’s Ghawar field. The five year project would involve work in Uthmaniyah, Haradh, Hawiyah and Shedgum. The project is expected to use three to four rigs, and involve between 153 and 185 oil production, water injection and evaluation wells, Halliburton said.
The contract is an important part of Saudi Aramco’s plan to explore new avenues of collaboration with major oil-field services providers. Halliburton said it has worked previously with the petroleum company, which is owned by the Saudi Arabian government. The Ghawar field contract can be renewed for an additional five years…
“Collaboration” my camel…
The Saudis have three generations of tip-top, Texas A&M educated oil men. And they don’t ask for help unless they desperately need it.
The key here is the water injection. You do that to maintain pressure in a declining well.
The second item to ponder is their current quest to buy BP.
According to Reuters: “A delegation of Saudi investors will be heading to London for direct talks with BP. It did not reveal its sources or names of the investors, saying only some of the delegation members were from the energy industry. The report came as BP Chief Executive Tony Hayward was due to meet investors and UAE oil industry officials in Abu Dhabi.”
It is said that the Saudis want to buy 10%-15% of the beleaguered company.
While buying an oil company with a sovereign wealth fund is nothing in and of itself, it is interesting within the backdrop of the third reason that suggests the Saudis are running out of oil.
The King says no more exploration
The Official Saudi Press Agency reported this week that Saudi Arabia’s King Abdullah has ordered a halt to all new oil exploration to save Saudi Arabia’s oil wealth for future generations.
“I was heading a cabinet meeting and told them to pray to God the Almighty to give it a long life. I told them that I have ordered a halt to all oil explorations so part of this wealth is left for our sons and successors God willing,” said King Abdullah.
Obviously, if the world’s largest oil field has peaked, the price of oil will rise dramatically when the global economy gets off the snide.
But that’s not the half of it…
Given the current growth in demand, the International Energy Agency calculated that it would take the discovery of six new fields the size of those in Saudi Arabia to maintain current world oil output through to 2030.
That’s just not going to happen.
Editor, Energy & Capital