RIYADH, July 19: Claims and counter claims, with definite political slant, continue to confound the energy dynamics. The picture is far from clear and is getting increasingly difficult to decipher and see through with each passing day.

Scepticism rules the energy world. Pundits continue churning out various, cooked and semi-cooked, theories about the Saudi capacity to sustain and increase its production any further. Matthew Simmons and his cohorts term the Saudi announcement to take production to 12.5 million bpd by next year, and more, if and when required as “a bunch of empty boasts.”

Confusion about the sustainability of some of the major Saudi oil continues to haunt. Such is the state of disbelief that the Organisation for Economic Cooperation and Development (OECD) energy watchdog, the Paris-based International Energy Agency, had decided to undertake a gigantic task, full of political landmines, of auditing the true state of major, super giant wells, of the world. This field by field report is scheduled to be released only in November.

But now a similar report is out in open. The BusinessWeek, on the basis of some ‘fresh data on Saudi Arabia’s oil fields, claims that for at least the next five years, and possibly longer, the kingdom is likely to produce less than the promised 12.5 million barrels a day, — a bomb shell in the real sense.

The detailed document, reportedly obtained by the BusinessWeek from a person with access to Saudi oil officials, suggests that Saudi Aramco will be limited to sustained production of just 12 million barrels a day in 2010, and not 12.5 million bpd, and will be able to maintain that volume only for short, temporary periods such as emergencies. Then it will scale back to a sustainable production level of about 10.4 million bpd.

BusinessWeek claims it has obtained a field-by-field breakdown of estimated Saudi oil production from 2009 through 2013. The breakdown was reportedly provided by an oil industry executive who claimed he had confirmed it with a ranking Saudi energy official who has access to the field data.

The data about Ghawar, the super, super giant Saudi field shows producing 5.4 million barrels a day next year, “but the volume then falling off rapidly, to 4.475 million daily barrels in 2013. That’s why Khurais is so important-to make up for that decrease,” said the oil industry executive.

On the other hand, Saudi Arabia and Opec seem more than convinced of their capabilities. Opec Secretary-General Abdallah al-Badri recently strongly denounced the “myth” of an oil shortage and blamed the crisis on speculation sparked by the subprime lending crisis in the United States.

“Seventy per cent of crude contracts on the Nymex are held by speculators... Some form of regulation is needed,” he emphasised, adding, “The market has no shortage of physical crude”.

Saudi Arabia insists it would be able to pump at 12.5 million barrels per day for as long as the market needs once new capacity comes online next year.

A Saudi oil official while commenting on the report said, “This is sustainable for as long as the market needs it.” “We are on track to reach production capacity of 12.5 million bpd by the middle of next year and we will do it.”

On the fore front of the current Saudi drive is the giant Khurais oil field, about 90 miles east of Riyadh. The field holds 27 billion barrels of oil - more than all the proven reserves of the United States. Starting June 2009, it would produce 1.2 million barrels a day, enough to satisfy the projected growth in global demand next year. The kingdom is investing more than $10 billion on the field, with 26 contractors, 106 subcontractors and 28,000 employees working on the project. It is the largest piece of a five-year, $60 billion effort to expand the Saudi oil production capacity.

A variety of new technologies, including multiple lateral wells and microscopic robots swimming through rock pores deep underground, will allow Saudi Arabia to start recovering much more of the oil from its fields, says Mohammed Saggaf, the head of Aramco’s advanced exploration research wing.

Consequently, it is expected that the amount of recoverable crude, from the fields could go up to 70 per cent from the current 50 per cent over the next 20 years; Mr Saggaf was quoted as saying, adding another 80 billion barrels to the Saudi reserves.

The kingdom is already pumping at the highest rate since 1981, and has boosted output by 550,000 bpd since May. The Organisation of Petroleum Exporting Countries pumped an average 32.47 million barrels per day of crude oil in June, up 230,000 b/d from the May, Platts reported.

In June, Opec exports were reported at considerably higher levels, with Saudi Arabia producing an average 9.45 million b/d, up 210,000 b/d from the previous month.

The 12 Opec members excluding Iraq, pumped an average 29.98 million b/d in June, up from 29.75 million b/d in May.

However, not every one seems convinced by the Saudi and the Opec gestures and some continue to stay sceptic. The two sides but are poles apart — ominous by any means — and something needs to be done rather urgently.