Press Runs With 2007 Wiki-Cable on Oil Reserves, Capacity Despite Challenge by the Source

Published: February 16, 2011

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Patrick W. Ryan | SUSRIS

A former Saudi Aramco executive who was cited in a “Wikileaks” report published this month on the subject of oil capacity and proven reserves in the Kingdom is challenging the accuracy of a 2007 diplomatic cable said to report his views. The British daily “The Guardian,” one of the media outlets chosen by the “Wikileaks” organization to distribute hundreds of thousands of sensitive American military and diplomatic messages, reported on February 8, 2011 that Saudi Aramco’s former head of exploration and production, Dr. Sadad Al Husseini “met the US Consul General in Riyadh in November 2007 and told the U.S. diplomat that Aramco’s 12.5m barrel-a-day capacity needed to keep a lid on prices could not be reached.” The article went on to say Husseini told the U.S. Consul General that he believed Aramco’s reserves were “overstated by as much as 300bn barrels.” These assertions, according to “Wikileaks” were reported from American diplomats in the Kingdom to the U.S. State Department in a cable that appears in full on the “Guardian” web site.

Dr. Husseini challenged the accuracy of the remarks the “Wikileaks” cable attributed to him in a press release he issued February 11, 2011, three days after the Guardian report to set the record straight. In it he said he did not and does not “question in any manner the reported reserves of Saudi Aramco, which are in fact based on the highest levels of sound and well established engineering and economic principles and practices.” He pointed out that he could not have said there was a 300 billion barrel error in claims of oil reserves since the total of proven reserves amounts to 260 billion barrels. The U.S. Energy Information Administration (EIA), citing the “Oil and Gas Journal,” agrees with the 260 billion barrel proven oil reserves figure.

Regarding the claim in the cable published by “Wikileaks” that Husseini, in 2007, doubted Saudi Arabia would achieve a production capacity of 12.5 million barrels per day by 2009, he noted that, “the giant multi-billion dollar expansion projects which were funded in recent years are now all a visible reality for the whole industry to see.” Husseini added, “All these oil production projects were completed by the end of 2009 and the Kingdom’s total oil production capacity does in fact now stand firmly at 12.5 million barrels per day.”

The EIA assessment of Saudi Arabia’s production stated it produced on average 10.2 million bbl/d of total oil in 2010. The EIA “Independent Statistics and Analysis” also reported,

“Saudi Arabia maintains the world’s largest crude oil production capacity, estimated by [EIA] at over 12 million bbl/d at end-2010. Over 2 million bbl/d of capacity was added in 2009 with the addition of increments at Khurais, AFK (Abu Hadriya, Fadhili and Khursaniyah), Shaybah, and Nuayyim.”

Dr. Husseini commented in an interview in 2009 for the “Energy Bulletin” on Saudi Arabia’s oil production capacity expansion:

“Saudi Arabia has a very credible and professional record in terms of declaring capacity and meeting its production targets. When the Kingdom announced a target of 12.5 million barrels of capacity, they actually committed funds to develop that capacity and we’ve seen them now commissioning those: 250,000 additional barrels in Shaybah; 1.2 million barrels in Khurais; 500,000 in Khursaniyah; 900,000 coming on stream in a couple of years in Manifa. So these are real projects and real capacities. I don’t think there is an issue that Saudi Arabia can deliver the oil it says it can deliver. The question is, what about the rest of the world? Is the rest of the world able to make up the difference? If we’re looking at 85 to 90 million barrels a day, and Saudi Arabia delivers 12.5 million, who’s going to deliver the rest and how much effort is going into that? And with decline rates of 7% to 8%, that’s four or five million barrels a year of net new capacity that has to come from new projects. So that’s where the challenge is. I don’t think the problem is Saudi Arabia. I think the problem is the rest of the world.”

“The Guardian” report of the Wikileaks cable set off a wave of articles and opinion pieces on Saudi Arabia’s oil reserves and production capacity in the mainstream media and blogosphere, including many after Dr. Husseini’s press released challenged the accuracy of the statements attributed to him and he noted the inaccuracies were being amplified by errors in the press. A review of articles on this question has yet to show that Dr. Husseini has been cited directly about the 2007 cable and the question of reserves and capacity, or that his release to the press has been considered in their analysis.

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Dr. Husseini’s Press Release of February 11, 2011 is provided in full:

Press Release by Dr. Sadad Al Husseini
February 11, 2011
Dhahran, Saudi Arabia

The U.S. Consulate note issued by Wikileaks in regards to Saudi Aramco’s oil reserves, based on a casual 2007 conversation with me, includes many patently inaccurate statements that have been further amplified by errors in the press.

I do not and did not question in any manner the reported reserves of Saudi Aramco, which are in fact based on the highest levels of sound and well established engineering and economic principles and practices. Since Saudi Aramco’s proven oil reserves are 260 billion barrels, there is no way I could have said they are in error by 300 billion barrels, a number that exceeds the actual reserves estimate itself. In fact the U.S. Consulate staff who approached me socially stated that Saudi Aramco’s published proven reserves should be more than tripled to include non-producible oil and oil that has not even been discovered. I defended Saudi Aramco’s professional practices and official reports and confirmed that Saudi Aramco adheres to the highest levels of accepted industry procedures and practices.

In regards to Saudi Aramco’s oil production capacity, the giant multi-billion dollar expansion projects which were funded in recent years are now all a visible reality for the whole industry to see across the Saudi oil fields. This has been an extraordinary accomplishment by Saudi Aramco and its leadership spanning engineering, construction and operations from Khurais in Central Arabia to Shaybah in the Rub al Khali.

All these oil production projects were completed by the end of 2009 and the Kingdom’s total oil production capacity does in fact now stand firmly at 12.5 million barrels per day.

Sadad Al Husseini

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