Kuwait's biggest field starts to run out of oil

It was an incredible revelation last week that the = second=20 largest oil field in the world is exhausted and past its peak output. = Yet that=20 is what the Kuwait Oil Company revealed about its Burgan field.

Kuwait: Saturday, November 12 - 2005 at 08:46

related stories

Editorial Column = RSS=20 feed

More = Editorial Column=20 stories =C2=BB

The peak output of the Burgan oil field will now be = around 1.7=20 million barrels per day, and not the two million barrels per day = forecast for=20 the rest of the field's 30 to 40 years of life, Chairman Farouk Al Zanki = told=20 Bloomberg.

He said that engineers had tried to maintain 1.9 = million=20 barrels per day but that 1.7 million is the optimum rate. Kuwait will = now spend=20 some $3 billion a year for the next year to boost output and exports = from other=20 fields.

However, it is surely a landmark moment when the world's = second=20 largest oil field begins to run dry. For Burgan has been pumping oil for = almost=20 60 years and accounts for more than half of Kuwait's proven oil = reserves. This=20 is also not what forecasters are currently assuming.

Forecasts wrong

Last week the International Energy Agency's = report said=20 output from the Greater Burgan area will be 1.64 million barrels a day = in 2020=20 and 1.53 million barrels per day in 2030. Is this now a realistic = scenario?=20

The news about the Burgan oil field also lends credence to the=20 controversial opinions of investment banker and geologist Matthew = Simmons. His=20 book 'Twilight in the Desert: The Coming Saudi Oil Shock and the World = Economy'=20 claims that the ageing Saudi oil filed also face serious production = falls.=20

The implications for the global economy are indeed serious. If = the world=20 oil supply begins to run dry then the upward pressure on oil prices will = be=20 inexorable. For the oil producers this will come as a compensation for = declining=20 output, and cushion them against an economic collapse.

However, = the oil=20 consumers then face a major energy crisis. Industrialized economies are = still=20 far too dependent on oil. And the pricing mechanism of declining oil = reserves=20 will press them into further diversification of energy supplies, = particularly=20 nuclear, wind and solar power.

Geological facts

All this was foreshadowed in the energy crisis = of the=20 late 1970s when a serious inflection in oil supply by the year 2000 was = clearly=20 forecast. How ironic that those earlier forecasts now look correct, = while more=20 modern and recent forecasts begin to look over optimistic and = out-of-date with=20 geological reality.

Nobody can change the geology, and forces of = nature=20 that laid down reserves of oil and gas over millions and millions of = years.=20 Could it be that we have been blinded by technological advances into = thinking=20 that there is some way to beat nature?

The natural world has an = uncanny=20 ability to hit back at the arrogance of man, and perhaps a reassessment = of=20 reality at this point is called for, rather than a reliance on oil = statistics=20 that may owe more to political maneuvering than geological facts.=20

ARTICLE OPTIONS
Add to = Watchlist=20
Save=20
E-mail=20
Print=20
PDF =

Peter J. = Cooper,=20 Editor-in-Chief
Saturday, November 12 - 2005 at 08:46 UAE local = time=20 (GMT+4)

Replication or redistribution in whole or in part is = expressly=20 prohibited without the prior written consent of AME Info FZ = LLC.

This=20 Article was updated on Thursday, November 17 - 2005

Index : = Editorial = Column

Browse related = articles

=C2=AB Previous=20 article Next article=20 =C2=BB

Today's most read articles:

=C2=BB $3bn causeway = starts=20 soon
=C2=BB Sabic $2.27bn = cracker on=20 ice
=C2=BB Mashreqbank = eGate card
=C2=BB Gulf Air best = airline
=C2=BB Etisalat to = wait for VoIP=20 approval

Most read articles the past week:

Disclaimer:
The information = comprised in=20 this section is not, nor is it held out to be, a solicitation of any = person to=20 take any form of investment decision. The content of the AME Info Web = site does=20 not constitute advice or a recommendation by AME Info FZ LLC and should = not be=20 relied upon in making (or refraining from making) any decision relating = to=20 investments or any other matter. You should consult your own independent = financial adviser and obtain professional advice before exercising any=20 investment decisions or choices based on information featured in this = AME Info=20 Web site.

AME Info FZ LLC can not be held liable or responsible = in any=20 way for any opinions, suggestions, recommendations or comments made by = any of=20 the contributors to the various columns on the AME Info Web site nor do = opinions=20 of contributors necessarily reflect those of AME Info FZ LLC.

In = no event=20 shall AME Info FZ LLC be liable for any damages whatsoever, including, = without=20 limitation, direct, special, indirect, consequential, or incidental = damages, or=20 damages for lost profits, loss of revenue, or loss of use, arising out = of or=20 related to the AME Info Web site or the information contained in it, = whether=20 such damages arise in contract, negligence, tort, under statute, in = equity, at=20 law or otherwise.

News Releases

Daily News Updates

Video

Features and = Events=20
Industry = Talk=20

Audio

Financial Markets

News and Comment

Business Extra

Industry Focus

Business=20 Services =C2=BB

Country = Guides=20 =C2=BB

Audited=20 Unique Users
March 2006: 752,438