Al-Husseini has been on the radar for some time now. Some of his statements have been generating ripples here in Dhahran, the global energy capital and indeed beyond. Now a recent quote from him has literally sent shivers down the spine throughout the energy fraternity. If what he has said is really true, a major earthquake of immense magnitude is in the making — sooner, rather than later.

A cable to Washington by the US diplomats based in Dhahran, and obtained by WikiLeaks, underlined Saudi Arabia may not have enough oil reserves to prevent world prices rising sharply. The cable quotes Saddad Al-Husseini, the former czar of Aramco reserves, for this piece of info.

The cables, quotes Al-Husseini as saying that the Kingdom’s crude oil reserves may have been overstated by as much as 40 percent. Now this is definitely a doomsday scenario.

As per the cable, Al-Husseini, the ex-head of exploration at Saudi Aramco “disagreed with Aramco’s current reserve figure of 716 billion barrels (bbls) and that it would rise to 900 billion barrels in 20 years.”

The cables say Al-Husseini told a US diplomat in November 2007 that Aramco’s 12.5 million bpd capacity, needed to keep a lid on prices, was unfeasible. The diplomat hence emphasized: “Our mission now questions how much the Saudis can now substantively influence the crude markets over the long term. Clearly, they can drive prices up, but we question whether they any longer have the power to drive prices down for a prolonged period.”

The cables have taken the energy world by storm. Saudi long-term output possibilities are once again under the hammer all around.

The doomsday pundits were back in force in large numbers. And they started hammering the point of the approaching ‘peak’ at a crucial juncture at a time when the energy world was already grappling with the turmoil in Egypt.

However, there is confusion about what Al-Husseini really said. Last Wednesday he claimed he was “misquoted” in the cable and told Dow Jones Newswires he had “no doubt that the figures Aramco are publishing are actually right.”

“What I’m disputing (in the leaked cable) is the 900 billion barrels figure, and correcting the fact that the 716 billion barrel figure is oil in place, not reserves,” he told Dow Jones.

“If you look at Aramco’s report on reserves, it says 260 billion barrels. If you say this figure is 700 billion barrels, you’re overstating it.”

Yet, the energy world doesn’t really seem to be paying attention to this clarification. They seem to be interested more in the originally reported statement, making headlines all around and which, interestingly, which Al-Husseini is not even ready to own. This puts all the reasoning and arguments creating doubts on the Saudi sustainable capacity on flimsy grounds.

Then indeed, even if Al-Husseini said what he is being purported to have told the US diplomats in Dhahran, significant issues of proven reserves and recoverable or extractable reserves do need to come into play too.

The terms oil initially in place (OIIP) and recoverable reserves are two important parameters to be taken into consideration, before coming to a conclusion.

Saudi Arabia has been stressing all these years that its oil initially in place (OIIP) has been growing steadily for the last few decades. And in the meantime, the positive change in recovery rates — courtesy of recent technical innovations — would also positively impact the Saudi output capacity and rather significantly at that.

Before laying out the cards, let me openly concede that I am not at all competent enough to appreciate the technical intricacies of such a crucial issue. But, what I really fail to comprehend is this: if new reservoir technologies could allow other producers to exploit reserves that are currently inaccessible, why is this not possible in the case of Saudi Arabia?

Minister of Petroleum and Mineral Resources Ali Al-Naimi is definitely an insider. He knows the Saudi reserves inside and outside and when he says that Saudi Arabia could easily increase in proven reserves, by at least 200 billion barrels, there must have been some logic, some reasoning behind it.

A very recent report says that a new drilling technique, hydraulic fracturing, is opening up vast fields of previously out-of-reach oil in the western United States, helping reverse a two-decade decline in domestic production of crude. Now, if this is possible in the barren lands of Texas, it definitely has implications for other places too. Saudi Arabia is no exception.

Companies are investing billions of dollars to get at oil deposits scattered across North Dakota, Colorado, Texas and California. By 2015, these fields could yield as much as 2 million barrels of oil a day — more than the entire Gulf of Mexico produces now.

This new drilling is expected to raise US production by at least 20 percent over the next five years. Within 10 years, it could help reduce the US oil imports by more than half, advancing a goal that has long eluded policymakers in Washington.

The technique was being used to free up gas, yet since geologists were of the opinion that oil molecules are sticky and larger than gas molecules, the process wouldn’t work to squeeze oil out fast enough to make it economical. However, drillers seem to have learned how to increase the number of cracks in the rock and use some other chemicals to free up oil at low cost. “We’ve completely transformed the natural gas industry and I wouldn’t be surprised if we transform the oil business in the next few years too,” says Aubrey McClendon, chief executive of Chesapeake Energy, which is using the technique.

Petroleum engineers first used the method in 2007 to unlock oil from a 25,000-square-mile formation under North Dakota and Montana known as the Bakken. Production there rose 50 percent in just the past year to 458,000 barrels a day.

Mark Papa, chief executive of EOG Resources, the company that first used horizontal drilling to tap shale oil, says this oil is cheaper to tap than the oil in the deep waters of the Gulf of Mexico or in Canada’s oil sands.

“We have redefined how to look for oil and gas,” says Rehan Rashid, an analyst at FBR Capital Markets. “The implications are major for the nation.”

Al-Husseini must be having his reasons for his recent pronouncements, interestingly after leaving Aramco, yet this Husain seems confident that new technology is opening up new energy frontiers, both in Saudi Arabia and beyond. And there are a considerable number of people around, who religiously believe that the oil era is far from over. Indeed one needs to filter fact from fiction!