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A Technical approach to Saudi Arabia crude oil supply forecast and potential substitutes

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2019
Aslanoğlu, Volkan
In this master thesis, crude oil production forecast of Saudi Arabia and its potential substitutes are investigated. Reservoir and production behavior of 12 giant fields and the other fields' production as a function of total production is estimated. Four different scenarios are suggested for crude oil production forecast while five potential substitutes can be classified as top substitutes. The first part of the study shows that Saudi Arabia has produced more than 150 billion bbl crude oil so far and has another 208.7 billion bbl recoverable reserves to be produced. However, crude oil production would decrease to 6 MMbpd as 2044 since the mature oil fields as Ghawar and Abqaiq are close to depletion and some subfields as Ain Dar/Shedgum and Uthmaniyah is expected to deplete in 20 years. On the other hand, investments in oil exploration to discovery of new fields and development of the existing fields could provide consistent production above 15 MMbpd until 2040 with an expenditure around $96.35 billion. In the second part, it is concluded that although Saudi Arabia has always been the major crude oil exporter, Iraq could be a perfect substitute if regional peace is constituted. Even so, the country is the second option considering the major export destinations of the Kingdom. The neighbor, UAE, is the third option for the crude importers after Saudi Arabia and Iraq. Moreover, Iran has still the opportunity to redeem its share in crude oil market to be a potential substitute if sanctions are lifted. The other potential substitute Russia needs new trade routes as Kanal Istanbul and Arctic Route or expanding pipeline capacity to canalize Asia markets. Other crude oil producers need more severe actions.