Video proFile description
Boone: I really feel like I am helping do something for this country. When you get down to it, it's very, very simple, this is all about us.
Brian: Hi, I'm Brian Bradshaw. I'm here with Boone Pickens. This is part of an ongoing educational series of videos about current energy issues in the world. Today, we're talking about Saudi Arabia. Boone, thank you for being with us. Thank you for taking the time.
Brian: So, as far as Saudi Arabia goes, it's a critical part of the global supply picture. Just by way of background can you give us a little bit of history and a little bit of current facts about their production levels.
Boone: Let's start from overall production everyday globally, 90 million barrels. OPEC, which Saudi Arabia is a part of, a big part of, is producing 30 million barrels out of the 90, so they have one third of the global production. Saudi Arabia is 9.3 million barrels a day, the largest exporter of oil of any country in the world. So, they've been there a long time. They're very important to the overall supply picture, 9.3 million barrels a day is a lot of oil. But, where does it come from?
Over half of it comes from Ghawar, which is the biggest field the Saudi's have. That's been on production since 1951 and it's produced about five million barrels a day. Now let me tell you, I know a little bit about life of oil fields, they decline and then deplete. This field has produced over 50 billion barrels of oil and it is over 50% depleted. So, you don't recover 100% of oil in place, so another 10% - 20% is about all you can expect out of this field.
Brian: Boone, can you talk a little bit about the history of the Kingdom of Saudi Arabia, because it hasn't always been the structure it is today.
Boone: No, it wasn't. It was tribes. Saudi Arabia became a country in 1932. You didn't wipe out the tribal influence of course and you still have that influence in the country. But it's 27 million people, 70% of the population is under 30 years old, which gives you an unusual country, I'd say. And of the 70% under 30, 40% of them are unemployed. Now do they want to work or not work, 90% of the work in the country is done by expats.
It is a welfare state, a wealthy welfare state. But you had King Abdullah a year ago or two years ago had to come in and put $40 billion [00:04:00] into the people and the country. It was a handout is what it was. Well, that's going to have to continue. I mean there'll be other payments like that.
Brian: Every country that's gone through that process we've seen their oil production go to almost zero for some period of time. That's pretty scary when, given your earlier comments, this is the biggest exporter in the world. What kind of affect do you think this could have on oil prices if you saw a big disruption in their supply?
Boone: Well, no question the price of oil is going to go up over time. It has to. Over what time, it could happen soon. I'm not saying, I'm not predicting an early demise. I'm not saying that, but I also realize that it can happen quickly when it does.
Brian: So how does the United States protect itself from something like that. What's the... I mean we talked about how our oil production is growing somewhat, but if oil prices were to spike because something happens in Saudi Arabia, what's the best way for the United States to protect itself?
Boone: The only way that you really... Sure you can do it if the United States could get up to 15 million barrels a day. Well that isn't even realistic, we've never been above 10 and that was in 1973. Then you decline to 4 and now you're back up to about 7 or 8. But we're using, in the United States, 18 million barrels of oil a day. So we are, of course, importers. What we need to do is get on our own resources and then you have an abundance of natural gas. So introduce natural gas into the transportation fuel mix and now we can take care of ourselves, protect ourselves, and have some high degree of control on the price of fuel in America.