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Oil production plan- Saudi Arabia

Oil production plan- Saudi Arabia

Manufacturing and design project

The Kingdom of Saudi Arabia is a major oil producing company. To facilitate the delivery of crude oil from oil wells to staging and delivery points, the country is connected with complex networks of steel pipes. Steel pipes although cheap in initial price but requires expensive maintenance from an avoidable corrosion. This has pushed the idea of replacing more steel pipes with composite pipes. You as a young entrepreneur decided to invest in a manufacturing facility to make composite pipes. To convince the national oil producing company to invest in your idea, you need to provide a preliminary business report detailing the following:

1- A design for the composite pipes toward oil transfer and choice of material. Provide calculations and Engineering drawings. (5 points)

2- A detailed production plan including the process, tools, needed labor. (5 points)

3- Cost analysis for making and installing 3000km of pipes on flat land. This include cost of manufacturing and installation (think about e.g. joining processes. Etc.). (5 points

Saudi Arabia has traditionally been thought to be the world’s most essential swing manufacturer of oil. When behaving therefore, the Saudi govt would boost or reduce oils generation to keep up an even more steady price.[4]

Saudi Arabia created 10.3 million barrels every day (1.6×106 m3/d) (Mbbl/d) in 1980, 10.6 Mbbl/d in 2006,[5] and in the region of 9.2 Mbbl/d in 2008.[6] Saudi Arabia keeps the world’s biggest crude oil generation potential, calculated to become approx. 11 Mbbl/d at middle of the-12 months 2008 and declared wants to improve this ability to 12.5 Mbbl/d by 2009[7] Cumulative manufacturing with the finish of 2009 was 119.4 billion bbl.[8] Making use of the reported amount of 267 Gbbl, previous manufacturing is 40% from the mentioned remaining proved reserves. Since 2016, Saudi Arabia cumulative gas manufacturing achieved 143.97 bbl.[9]

Following the then You.S. president George W. Bush requested the Saudis to improve generation on visiting Saudi Arabia in January 2008 plus they declined, Bush questioned whether they had the cabability to bring up creation any longer.[10] In the summertime of 2008, Saudi Arabia introduced an increase in prepared creation of 500,000 barrels per day.[11] However, in 2008, some professionals believed that Saudi oil production possessed already peaked or would do it anytime soon.[12] In Apr 2015, the Saudi gas minister Ali Al-Naimi mentioned that Saudi Arabia produced 12 million barrels every day in March that year, which was the greatest shape depending on documents considering that the earlier 1980s. The earlier maximum is at August 2013 at 10.2 million barrels each day. Historically, a minimum of since 1982, Saudi Arabia has taken care of reserves info and relevant technical info as being a well-guarded magic formula. It has made unbiased verification of the Kingdom’s stocks and solutions virtually out of the question, leaving behind different commentators and the entire world at-sizeable to depend on speculation and indirect signals. Nonetheless, a newly released (2019) unbiased evaluation—to assist in Saudia Arabia’s effort in an preliminary general public providing (IPO) of supply within the federal Saudi Aramco oil company—may have changed that considerably. The unbiased outside auditor claimed which it had decided Saudi Arabia’s proven essential oil supplies were actually a minimum of 270 billion barrels, fairly constant with Saudi boasts.[14]

In the 2004 review, Matthew Simmons assessed 200 technological documents on Saudi reserves from the Society of Petrol Technical engineers and concluded that Saudi Arabia’s gas manufacturing experienced near phrase decrease, and therefore it might struggle to consistently develop more than 2004 ranges, when manufacturing of crude oil and rent condensate averaged 9.10 million barrels every day. Simmons also suggested that this Saudis could possibly have irretrievably damaged their big gas fields by over-moving sea salt h2o to the fields in order to keep up with the fields’ pressure and enhance quick-phrase gas removal. He determined (in 2004): “In 2-three years we will have conclusive facts that Saudi gas is peaking,”[15]

Since his forecast, Saudi crude oil generation has different from only 8.25 million barrels every day (common for 2009) around 9.83 million barrels per day (regular for 2012). All round, within the nine many years since his 2004 forecast (2005-2013), Saudi crude oil and lease contract condensate creation has averaged 9.20 million barrels per day, just slightly higher than 2004 ranges.[16]

Diplomatic cabling leaked out during america diplomatic cabling leak in 2011 stated that Sadad Ibrahim Al Husseini, past vice president of Saudi Arabia’s essential oil monopoly Saudi Aramco, warned the united states how the gas reserves in Saudi Arabia might in fact be 40Per cent (300 billion barrels) under claimed.[17][18]

These skeptical viewpoints have already been countered by activities culminating during early 2019. Within a hit conference in Riyadh Saudi Arabia on January 9, 2019, Saudi Arabia Vitality Minister, Khalid Al-Falih, formally declared that DeGolyer and MacNaughton possessed finished the first ever impartial examination of turned out reserves to the Empire. The results with this effort show how the demonstrated stocks in the Kingdom are likely proximal to, as well as somewhat greater than, previous formal estimates. H.E. Khalid Al-Falih outlined the extensive effort in his remarks, stating that the process began in August 2016 and continued for almost ​2 1⁄2 years. H.E. Khalid Al-Falih layed out the thorough energy in the remarks, stating the procedure began in August 2016 and continuing for almost ​2 1⁄2 quite a few years. Reaction inside the click for the self-sufficient examination was well known. By way of example, Ellen Wald, global vitality policy analyst, told CNBC that “Whether they have got 260 or 266 billion barrels isn’t really the problem,” she said. “The position is because they got DeGolyer and MacNaughton, and that is a very reputed resource, do an audit…I feel it’s built to set to rest the controversy that’s always affected them considering that the newsletter of ‘Twilight from the Desert’.” Whilst Venezuela has noted “proven supplies” topping those claimed by Saudi Arabia, industry analyst Robert Rapier has advised that these phone numbers represent specifics powered by alterations in oil market place prices—indicating how the amount of Venezuela’s oils that qualifies as Venezuela’s “established” supplies might be motivated up or down by the international market price for oil.[14]

As outlined by Rapier, Venezuela’s gas stocks are largely of “additional-hefty crude oil” which could “not cost-effective to create” below a number of marketplace circumstances. Rapier notices that the near-quadrupling of Venezuela’s stated “established” stores, between 2005 and 2014—from 80 Gbbl to 300 Gbbl—may happen to be due to soaring oil costs that made Venezuela’s normally uneconomical bulkier crude suddenly marketplace-feasible to make, and consequently elevating it to within Venezuela’s “proven” stores. For that reason, Rapier contends, times of decrease crude oil marketplace costs may get rid of those reserves from your “confirmed” category—placing Venezuela’s viable “confirmed reserves” nicely below Saudi Arabia’s.[14]

By comparison, Rapier contends, the higher-high quality crude generally connected with Saudi oil career fields is inexpensive to generate under most industry-cost problems, and so is much more constantly, and uniformly, part of Saudi Arabia’s “established” supplies, when compared to the much more adjustable performance of the Venezuelan essential oil.