The prospectus breaks up Saudi reserves into six different categories. Ghawar is the second-largest, with a reported 58 billion barrels of combined (oil and gas) reserves. The largest category is “Other”, with 100 billion barrels of reported reserves and 3.6 million BPD of reported production in 2018. That suggests that Saudi is producing a lot of oil outside of the well-known fields.
So, we can’t know for sure whether Ghawar is declining (which would indeed be huge news), but there are two significant conclusions we can make based on the reported production number.
One is that if Ghawar is declining, Saudi has managed to more than make up for the loss of production in other oil fields. Saudi Aramco has increased production by about 2 million BPD since 2010.
But the second conclusion may be of more immediate interest to Americans.
Last December I wrote Why The Permian Basin May Become The World’s Most Productive Oil Field. In the article, I listed three reasons that I thought the Permian Basin would eventually push Ghawar for the title of the world’s top-producing oil field.
We don’t know for certain the reasons, but we now have this report from Saudi Aramco that Ghawar produced 3.8 million BPD in 2018. The Energy Information Administration reports that the Permian Basin is now producing 4.2 million BPD. For all of 2018 the Permian Basin averaged 3.4 million BPD, but production during the year increased by 1.1 million BPD. Production hit the 3.8 million BPD mark in October and has risen in every month since then.
So, we can reasonably conclude that right now — regardless of the reason — the Permian Basin has overtaken Ghawar as the world’s top oil-producer. That may not last if Saudi is constraining production in Ghawar, or if Permian production slows down anytime soon. But it marks the first time in decades that Ghawar wasn’t the top-producing oil field in the world.