The Sunday Times: Business Letters
Posted 23 May 04
IN Irwin Stelzer's article last week was the line "The Saudis have excess capacity and have talked about opening the valves, but have not actually done so."
According to BP's Statistical Review of World Energy June 2003, Saudi oil production peaked in 1997 at 9,370,000 b/day, since when it has declined to 8,680,000 b/day in 2002. The big question therefore is whether they can actually raise production. We should not have long to wait before it is clear whether Matthew Simmons, Houston energy investment banker, is right when he says production from the huge Ghawar field is failing.
Another mystery is whether the OPEC proven reserve figures refer to the remaining reserves or whether for the purpose of quota raising in the 1980's the figures were upgraded to represent the total endowment reserves including those already extracted.
BP's statistics for 2004 (giving figures for 2003) would normally be released next month, but they have been challenged to publish their own figures rather than simply quoting the Oil & Gas Journal. As this is such a "hot potato" at the moment they may delay publication or withdraw the facility rather than be accused (like Shell was) of obfuscation. We shall soon know their intentions. We live in interesting times!
Lawshall, Bury St Edmunds