There is no geological formation known to mankind bigger than the Ghawar in Saudi Arabia, the world’s largest onshore oil field.
The Ghawar was discovered in 1948, and was put into production in the 1950s. It is responsible for pumping around half of the oil that Saudi Arabia produces on any given day. As of 2012, the field has estimated remaining proved oil reserves of 75 billion barrels, more than all but seven other countries, according to the US Energy Information Administration.
But a research firm is arguing that the Ghawar might not enjoy its prime position forever as the Permian Basin of Texas and New Mexico holds 60 billion to 70 billion barrels of yet-to-be pumped crude oil.
The findings of the study on the Permian made by IHS Markit and published on Sept. 25, echo a previous statement made by Pioneer Natural Resources Chairman Scott Sheffield who claimed that the Permian could hold 75 billion barrels of recoverable oil, equalling the Ghawar. That estimate may grow as IHS geologists and data scientists extend their analytical techniques to deeper geological zones.
“The Permian Basin is America’s super basin in terms of its oil and gas production history and for operators it presents a significant variety of stacked targets that are profitable at today’s oil prices,” Prithiraj Chungkham, director of unconventional resources for IHS, said in a statement to announce the finding of the study, carried by Bloomberg.
IHS spent three years studying output data from more than 440,000 wells to calculate the amount of crude remaining within the basin that pumps more oil than any other US field, the London-based researcher said in the statement.
The Permian region’s so-called recoverable resources would be enough to supply every refinery in the US for 12 years and have a market value of about $3.3 trillion at current prices for West Texas Intermediate oil, the domestic benchmark, the study found.
However, taking over the Ghawar isn’t going to be that easy, argues Sadad Al-Husseini a former senior executive with Saudi Aramco.
“The estimated proven reserves of the Ghawar doesn’t explain everything about the field. 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,” said Al-Husseini, who was the top official responsible for exploration and development at Aramco until he retired in 2004.
He believes that the good news is that this study dispels the peak oil theory and suggests that the world is awash with oil resources and no peak in supply is on the horizon. “The problem is that not all the recoverable resources in the Permian can translate into production,” he added. Without knowing the right prices of oil for this to be recovered and many other conditions, “these estimates are only good headlines,” he said.