[Marxism] Saudi petroleum expert: the world is heading for an oil shortage

Louis Proyect lnp3 at panix.com
Tue Aug 23 07:45:47 MDT 2005

NY Times Magazine, August 21, 2005
The Breaking Point


So whom to believe? Before leaving New York for Saudi Arabia, I was advised 
by several oil experts to try to interview Sadad al-Husseini, who retired 
last year after serving as Aramco's top executive for exploration and 
production. I faxed him in Dhahran and received a surprisingly quick reply; 
he agreed to meet me. A week later, after I arrived in Riyadh, Husseini 
e-mailed me, asking when I would come to Dhahran; in a follow-up phone 
call, he offered to pick me up at the airport. He was, it seemed, eager to 

It can be argued that in a nation devoted to oil, Husseini knows more about 
it than anyone else. Born in Syria, Husseini was raised in Saudi Arabia, 
where his father was a government official whose family took on Saudi 
citizenship. Husseini earned a Ph.D. in geological sciences from Brown 
University in 1973 and went to work in Aramco's exploration department, 
eventually rising to the highest position. Until his retirement last year 
-- said to have been caused by a top-level dispute, the nature of which is 
the source of many rumors -- Husseini was a member of the company's board 
and its management committee. He is one of the most respected and 
accomplished oilmen in the world.

After meeting me at the cavernous airport that serves Dhahran, he drove me 
in his luxury sedan to the villa that houses his private office. As we 
entered, he pointed to an armoire that displayed a dozen or so vials of 
black liquid. ''These are samples from oil fields I discovered,'' he 
explained. Upstairs, there were even more vials, and he would have 
possessed more than that except, as he said, laughing, ''I didn't start 
collecting early enough.''

We spoke for several hours. The message he delivered was clear: the world 
is heading for an oil shortage. His warning is quite different from the 
calming speeches that Naimi and other Saudis, along with senior American 
officials, deliver on an almost daily basis. Husseini explained that the 
need to produce more oil is coming from two directions. Most obviously, 
demand is rising; in recent years, global demand has increased by two 
million barrels a day. (Current daily consumption, remember, is about 84 
million barrels a day.) Less obviously, oil producers deplete their 
reserves every time they pump out a barrel of oil. This means that merely 
to maintain their reserve base, they have to replace the oil they extract 
from declining fields. It's the geological equivalent of running to stay in 
place. Husseini acknowledged that new fields are coming online, like 
offshore West Africa and the Caspian basin, but he said that their output 
isn't big enough to offset this growing need.

''You look at the globe and ask, 'Where are the big increments?' and 
there's hardly anything but Saudi Arabia,'' he said. ''The kingdom and 
Ghawar field are not the problem. That misses the whole point. The problem 
is that you go from 79 million barrels a day in 2002 to 82.5 in 2003 to 
84.5 in 2004. You're leaping by two million to three million a year, and if 
you have to cover declines, that's another four to five million.'' In other 
words, if demand and depletion patterns continue, every year the world will 
need to open enough fields or wells to pump an additional six to eight 
million barrels a day -- at least two million new barrels a day to meet the 
rising demand and at least four million to compensate for the declining 
production of existing fields. ''That's like a whole new Saudi Arabia every 
couple of years,'' Husseini said. ''It can't be done indefinitely. It's not 

Husseini speaks patiently, like a teacher who hopes someone is listening. 
He is in the enviable position of knowing what he talks about while having 
the freedom to speak openly about it. He did not disclose precise 
information about Saudi reserves or production -- which remain the 
equivalent of state secrets -- but he felt free to speak in generalities 
that were forthright, even when they conflicted with the reassuring 
statements of current Aramco officials. When I asked why he was willing to 
be so frank, he said it was because he sees a shortage ahead and wants to 
do what he can to avert it. I assumed that he would not be particularly 
distressed if his rivals in the Saudi oil establishment were embarrassed by 
his frankness.

full: http://www.nytimes.com/2005/08/21/magazine/21OIL.html



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