TORONTO: Hardly a decade ago, Peak Oil debate was holding the global centre-stage. Pundits were concerned. Questions were being raised, about the world’s largest oil field, Ghawar and its capacity and potential to keep on producing crude at the current levels.

Measuring 280 by 30 km (174 by 19 miles), Ghawar has been producing crude for more than a half a century now. And even in current times too, despite all the talks of water being flooded into Ghawar, as per some estimates the field continues to produce somewhere around five million barrels a day.

According to American geologist and geophysicist M King Hubbert’s theory, peak oil is the point in time when the maximum rate of extraction of petroleum is reached and after which it is expected to enter terminal decline.

With people like Matthew Simmons, and his ‘Twilight in the Desert’ still on the global centre-stage then, the argument was that Ghawar will peak in the near future if it has not done so already. Simmons and his co-Peak Oil theorists were out to prove that the data being presented by Saudi Aramco and the likes were fabricated. They claimed to have reached this conclusion after having had the privilege of seeing hundreds of internal Saudi Aramco documents, besides indeed professional journals and other authoritative sources. Simmons & Co hence clamored for an independent audit of the reserves data of Saudi Arabia. The issue was could Saudi Arabia continue to quench the global crude thirst in the coming years?

While this debate was on, I had the privilege of getting acquainted with Fatih Birol, the current Executive Director at the Paris-based International Energy Agency (IEA).

Many say the IEA was created by the likes of Henry Kissinger in the immediate aftermath of the 1973 Arab Oil embargo, basically to counter the Organisation of the Petroleum Exporting Countries (Opec).

Birol was and is an OECD man. Then too, he was there representing the IEA. Hence, I asked him of his opinion about Ghawar continuing to be able to meet the growing global crude demand?

Birol was apparently in a tight spot. Yet, the professional in him was straight, underlining that Saudi Aramco is a professional organisation and that he believed in what they were saying and asserting.

His statement basically meant that despite being an IEA man, Birol was not giving in to the claims of the Peak Oil theorists who were hell bent on proving that twilight has descended on the desert.

But all these years, despite all the confidence in the professionalism of Saudi Aramco, murmurs could still be heard. Lack of independent audit remained an issue. And thus when it was announced that Saudi Aramco could be up for privatisation, pundits underlined that the move could require Saudi Aramco to open up its books. Investors would need to know the asset base – from authentic, independent sources.

People at the helm of affairs in Riyadh knew of it. And thus from the very beginning, it was said: Saudi Aramco would open up and fulfill the needs and requirements of the potential investors.

These assurances were coming from none else than Prince Mohammad Bin Salman, the Saudi Deputy Crown Prince who also heads the Council for Economic and Development Affairs.

Now it is being revealed that Saudi Aramco has already undertaken an external audit of its reserves base. And the audit has confirmed that Saudi Arabia has more than 261 billion barrels of oil reserves, Reuters reported on January 27.

Saudi Aramco had tasked Baker Hughes’ energy consulting services unit Gaffney, Cline & Associates, as well as Dallas-based DeGolyer and MacNaughton, to perform the reserves auditing, various sources told Reuters. Sources quoted by the agency now say that the audit by both the companies was completed late last year.

The independent audit of the Saudi reserves base takes care of the existing gap in the global energy database. According to Aramco’s own estimates, the Saudi Arabia has 261.1bn barrels of crude oil and condensate reserves. According to the BP Statistical Review of World Energy, Saudi Arabia’s total proved reserves were 266.6bn barrels at the end of 2015. And now the independent audit has confirmed that.

According to two sources, the audit has found that the reserves were “definitely not below” Aramco’s own estimates. “Aramco’s reserves have always been reported internally in line with international practice,” another Reuters source familiar with the issue insisted.

And this brings to mind, what my good, old, friend Fatih Birol told me almost a decade ago. Saudi Aramco was not presenting fudged figures — as many do.

Published in Dawn February 5th, 2017