The OPEC Annual Statistical Bulletin provides much grist for exploring the question: "So is Saudi production about to nosedive"? If Saudi production were to nosedive it would indicate the world oil peak having been reached.
Maybe Saudi production nosedived in late 2005. Maybe the Saudi's are voluntarily holding back production so they can manipulate the market.
Summary
1. Cross checking OPEC production and rig count data with International Energy Agency (IEA) and Baker Hughes data shows excellent agreement suggesting there is no reason to doubt the reliability of the OPEC data source.
2. In 2005, Saudi Arabia had 1923 producing wells that on average produced 5740 barrels oil per day per well. This is astonishing high well productivity for an area that has been producing oil for over 50 years.
3. The average well productivity has drifted down from just above 6000 bpd in 1991 to just below 6000 bpd in 2005 (Figure 1). There is no sign of a looming productivity crisis in these data and it would appear that increasing production may be achieved quite simply by drilling more wells.
4. The data provide insight into Saudi Aramco reservoir and resource management in relation to their roll as swing producer. In the past, production has been reduced by retiring production wells and raised again by bringing wells out of retirement. All the while, Aramco have a rolling program of drilling new wells thereby increasing the total number of wells that are available for production.
5. In my post of 7th March I suggested that the most likely explanation for falling Saudi production since April 2006 was voluntary restraint executed through a program of resting wells with high water cut or low pressure. The data presented here contain no evidence of a pending production crisis and voluntary restraint is still considered to be the most likely explanation for recent falls in Saudi production.
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