WiliLeaks cables state Saudi oil reserves may be overstated by almost 40 percent

February 10th, 2011 - 3:15 pm ICT by ANI  

London, Feb.10 (ANI): Leaked American diplomatic cables released by the whistle blowing web site WikiLeaks have revealed that the United States fears that Saudi Arabia, the world’s largest crude oil exporter, may not have enough reserves to prevent oil prices escalating.

The cables urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom’s crude oil reserves may have been overstated by as much as 300 billion barrels - nearly 40 per cent.

According to Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, between 2007 and 2009, Saudi Arabia could have reached an output of 12 million barrels a day in 10 years, but before then, possibly as early as 2012, global oil production would have hit its highest point. This crunch point is known as ‘peak oil’.

Husseini said at that point Aramco would not be able to stop the rise of global oil prices because the Saudi energy industry had overstated its recoverable reserves to spur foreign investment.

He argued that Aramco had badly underestimated the time needed to bring new oil on tap.

‘According to al-Husseini, the crux of the issue is twofold. First, it is possible that Saudi reserves are not as bountiful as sometimes described, and the timeline for their production not as unrestrained as Aramco and energy optimists would like to portray.’

In the past two years, other senior energy analysts have backed Husseini.

Fatih Birol, chief economist at the International Energy Agency, said last year that conventional crude output could plateau in 2020, a development that was ‘not good news’ for a world still heavily dependent on petroleum. (ANI)

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