Stuart Saniford has just posted a depressing graphic on the Oil Drum:
If you can’t read the table, the green and red lines are various estimates of Saudi daily oil production rates since 2000. As you can see, they have been unable or unwilling (I’m guessing the former) to raise their rates above a ceiling of about 9.5 million barrels per day. The depressing part about this is the blue line, which indicates the number of drilling rigs being used by Saudi Arabia to produce this oil. As you can see, that number has more or less tripled since January 2004, while production has remained flat. Most of Saudi Arabia’s current oil production is done on land, and those numbers are starting to drop from the looks of it. Perhaps the Saudis are looking to develop more offshore deposits to try and keep production levels up?
If nothing else, I think this signifies that despite all the happy talk coming out of Aramco, they do not possess the ability to significantly increase their production of oil. If they are looking at having to drill more holes to simply keep producing at the current rate, they are approaching or are already at their peak. And, as Matthew Simmons has said, when Saudi Arabia peaks, the world peaks. Then, all bets are off.
Welcome to the treadmill. When you’re having to work harder and harder to barely keep up with past production rates, you’re in trouble. For what it’s worth, this is the same state of affairs affecting US and Canadian natural gas production.