Ghawar is the world’s oil spigot. It’s the biggest conventional field in the world’s biggest-producing country, Saudi Arabia. Statistics about Ghawar—a narrow, deep deposit in porous limestone—are a state secret. The best guess, according to Rasoul Sorkhabi, a geology professor at the University of Utah, is that the field accounts for about 60 percent of Saudi oil.Tough numbers for the wildcatters.
As such, Ghawar is the country’s lever on oil prices. Too high, and the Saudis open the nozzle; too low, and they close it a bit. They’ve been pumping a lot of oil of late—the nation produced a record 10.6 million barrels a day in June, according to data the country provided to OPEC—in part to drive U.S. shale drillers out of business.
Wildcatters tapping the Bakken in North Dakota, after all, face a much different deposit. Picture a shallow lake of oil sprawling under the Great Plains for hundreds of miles, trapped in dolomite. That requires fracking, and fracking costs money. New wells in the best part of the Bakken break even at $29, according to the North Dakota state government.
Saudi Arabia, meanwhile, can produce oil from existing wells for $5 a barrel, Ali al-Naimi, Saudi minister of petroleum and mineral resources, said in December.
Sunday, July 19, 2015
Ghawar vs. Bakken