New Permian assessment that 60 billion to 70 billion barrels remain technically recoverable rivals Ghawar’s estimated 75 billion remaining barrels, rattles Saudis
The world’s most popular unconventional basin has the reserves to match, according to recent analysis from IHS. The Permian may have enough hydrocarbons to supply the U.S. for decades to come.
Initial results from IHS’s analysis indicates the overall Permian Basin holds an estimated 60 billion to 70 billion barrels of technically recoverable resource. It is important to note that this is the amount of oil that is technically recoverable, not the amount of oil present or the reserves that are recoverable at current prices.
How IHS got to its number: estimate uses historical wells to identify formation depths
IHS arrived at this value by analyzing its database of numerous Permian wells. This allowed the company to identify the depth and extent of the numerous benches in the Permian, enhancing the accuracy of reserve estimates. The thousands of Permian wells, new and old, mean that there are many data points available to give a high-resolution view of Permian formations.
IHS subsurface content executive director John Roberts said his team re-examined the historical data and was able to “completely reassess the potential of this mature, giant basin in a 3D model.”
39 billion barrels have already been produced
The current estimate of 60 billion to 70 billion barrels recoverable is particularly impressive when the previous history of the Permian is considered. Production began in the 1920’s, and has grown and contracted for nearly 100 years. In total, the Permian has already produced more than 39 billion barrels of oil, meaning it could produce a total of more than 100 billion barrels over its lifetime.
Permian could rival Ghawar
This would make the Permian large enough to rival the titanic Ghawar field in Saudi Arabia. The field that has made Saudi Arabia such an important player in oil markets is estimated to have 75 billion barrels of remaining proved oil reserves, according to a 2012 EIA estimate.
Saudi Arabia is, of course, loathe to give up the title of largest oil field. Sadad Al-Husseini, the former head of exploration and development for Aramco, discussed the Ghawar and Permian reserves with Arab News.
“The estimated proven reserves of the Ghawar doesn’t explain everything about the field,” Al-Husseini said. “If the source rocks of the field are added into the calculation, we will find that Ghawar is a massive structure that no other formation in the world can keep up with. The problem is that not all the recoverable resources in the Permian can translate into production.”
Without knowing the right prices of oil for this to be recovered and many other conditions, “these estimates are only good headlines,” the Aramco exec told the Arab News.
Of course, with the biggest IPO in history slated for 2018, it is understandable why Aramco would play down comparisons between its reserves and those of competitors. In the past, the kingdom has been very reluctant to release its own reserves estimates, so estimates released in preparation for the IPO will be highly scrutinized.
