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21 comments on A little more on CERA

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SW on September 7, 2005 - 11:07am Permalink | Subthread | Comments top
I'm rather astonished that anyone can take comfort from a growth of 2,4 million barrels per day in production over five years!  I tried to be optimistic and lumped all I could into this years and got 1.75 million for the end of this year.  That is barely 2%.  This is the kind of growth that all the pessimistic models assume.  How can you look at this and deal with depletion with anything but the most wishful thinking without seeing a train wreck?  Even at a 4% depletion rate things look grim.  Looks to me like Deffeyes was spot on.  How does new demand get taken care of.  One must assume a significant amount of demand destruction rather than new demand.  Surely this is not a comprehensive list.  Surely this just scratches the surface of the massive amount of new projects that are going to come on line in the next several years to meet the need.
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Heading Out on September 7, 2005 - 11:27am Permalink | Subthread | Parent | Comments top
What I am doing is going through the projects, year by year, that CERA said would contribute to the oil flow by the year 2010.  The ones that I have listed above are those that they had anticipated would start in 2005, and as you may note, some have and some will be delayed into 2006.

Later this week I will do the same thing for 2006 and next week probably 2007.  I don't have their projects for 2008 and 2009.  I will then do the same for the projects from ODAC that were not covered by CERA.  Then I might wander around and see if there are any more that should be considered.  

Once we have the total list in a table, it will be fairly easy to post the occasional update telling folk where we are with it (and possibly adding additional projects since there is exploratory work that should yield some).  The only thing that folk need to remember is that all these are big projects that take significant lead-time and some are sensitive to other issues that may cause delays. And since I will be anticipating production in 2010 the numbers that I will use in the tables will be the operating anticipated maximum production, rather than the step-up values as they bring the field on stream.  If folks have other suggestions I would be glad to hear them.

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Rembrandt on September 7, 2005 - 12:16pm Permalink | Subthread | Parent | Comments top
You might want to take a look at this to safe yourself some work.

http://www.peakoil.nl/images/oil_production_outlook_2005-2040.pdf

I emailed you guys about it before but got no response.

As for the 2005 fields:

You are missing these bigger fields (above 50.000 b/d), also some smaller ones ofcourse.

Algeria, Hassi Messaoud, EOR
Iran, South Pars, Gas Condensates
Iran, Darquain
UAE, Bu Hasa, EOR
UAE, al-Dabb-iya, Rumaitha, and Shanaget
Mexico, Ku-Maloob-Zaab, EOR
Mexico, Crudo Ligero Marino
Mexico, Lankahuasa basin
Brazil, Jubarte
Trinidad & Tobago, Greater Angostura
Norway, Kristin Deepwater (oil, gas condensate)
Angola, Bomboco & north Sanha (Oil, condensate, LPG)
Congo Brazaville, Moho North, Moho South, Bilondo
Australia, Mutineer-Exeter
China, Peng Lai

The other fields mentioned:

Bonga no comments, bonga southwest is coming onstream around 2009.

Kizomba B, already on-stream and producing

Albacora Leste has 2 phases, 1 for 145.000 b/d and the second for an additional 100.000 b/d.

White rose, peak is scheduled at 92.000 b/d

Thunder horse, no comments

Dharkhovein, 2 phases, 1 already onstream this year (around 55.000 b/d) and phase 2 for next year (110.000 b/d)

Adar Yale (and tale), i agree with the EIA (300.000 end 2006)

Primorsk, no comments

ACG Megastructure. 500.000 of production ramping up until 2007. Not 410.000 b/d this year i think. also 2 additional phases later.

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Heading Out on September 7, 2005 - 12:31pm Permalink | Subthread | Parent | Comments top
Rembrandt:
  I apologize for not replying to the e-mail, I was travelling at the time, and did not see it until a time I thought too late to reply. (And I suspect that the rest of the team just assumed that I had written separately).  It sounds as though you have been working the same issue as I.  With a little time (I have to give a seminar on all this tomorrow morning) I will go through your report in more detail and get back to you.

My feeling is that it is only by tracking these numbers that one can begin to see what the future holds.  But one also needs to find a variety of sources from which to get the data.  We have seen the OPEC numbers from different sources vary quite considerably within the last few months.

HO

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Bubba on September 7, 2005 - 6:11pm Permalink | Subthread | Parent | Comments top
Looking through the list of projects in this paper I find that it is quite comprehensive.  One thing though, the daily rates quoted for most of these projects are their 100% uptime, nameplate-capacity maximum rates.  Most of the offshore projects are facility constrained (oil, water, gas, and/or total fluid, etc)and cannot really maintain these rates on a full time basis.  It is probably best to assume 90% to 95% of the quoted rates as the likely volume they add to the world market.  
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Eroie Van Tanstaafl on September 7, 2005 - 12:42pm Permalink | Subthread | Parent | Comments top
No wishful thinking required.  Why do you assume 4% for ALL existing fields this year? That's simply not supported.  While some fields may decline this year at 4%, 6%, or even 10%, that does not mean that ALL fields are in decline THIS year.

CERA's estimate of 2.5 mbd new production for 2005 means at least a 3% increase in production, and probably slightly more.  So it seems that oil production may increase slightly this year.

These projects are mostly long lead-time investments, and were planned 3-5 years ago for oil in the $20-30 range.  If oil stays above $35-$40, we should expect LOTS of additional new production to be announced in the next 12 months for 2008-2010.  Of course, CERA says that $40 is the likely equilibrium price for the near future, but that recessionary economic shocks might push it lower.  It remains to be seen if the oil companies will use a $25 or $40 price when evaluating new production proposals.

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Stuart Staniford on September 7, 2005 - 1:47pm Permalink | Subthread | Parent | Comments top
A lot of production now is offshore, and offshore fields decline very fast. See the data for various North Sea fields here, with decline rates well over 10%. See graphs here. The whole North Sea domain is now declining over 10% and closer to 15%.

So 4% overall for existing production is probably pretty kind. Eg the EIA reports that FIP in Saudia Arabia is declining at 5-12% annually.

I suspect that what is assumed for decline rates on the FIP is going to be the leading source of uncertainty in a prediction. The problem of gathering and reconciling a list of future projects is a soluble one - it's just work in doing it.

Here are some initial thoughts on requirements for a good data architecture:

  • Data should be stored in a format suitable for general use by any researcher without specialized or custom software (probably Excel).
  • Data format should allow for easy updating of country by country production statistics as new production data becomes available on a monthly basis.
  • Data format should support projections based on varying decline rates of the FIP for different countries.
  • Data format should allow more complex decline projections than a straight exponential where data quality supports a more detailed model.
  • Data format should support global tweaking of decline rates from "optimistic" to "pessimistic" in a way that allows one multiplier to adjust all the individually estimated country decline rates.
  • Data format should support modeling new fields at varying levels of detail (either a flat mpd for the life of the project, or a sculpted profile where an estimate of that is available).
  • Data format should support incorporating individual projected field volumes into global estimates in a way that allows easy time translations and upswing stretching due to project construction delays.
  • Data format should support easy transition of a field from being part of FUD to being part of the monthly country production statistics.
  • Data format should be self documenting and allow easy graphical inspection of exactly what is being assumed for any country or any field.
  • Data format should support multiple researchers maintaining it in parallel with only modest editorial effort in consolidation.
  • Consideration should be given to versioning, as data will be a living repository that changes over time.
Any other requirements?

I am willing to put some time into this.

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Nick Rouse on September 7, 2005 - 4:08pm Permalink | Subthread | Parent | Comments top
The latest data for UK oil production from the UK Department of Trade
and industry at:-
http://www.og.dti.gov.uk/pprs/full_production/monthly_oil_production/0.htm
give the 2005 monthly declines over the corresponding month in 2004 as
Jan -12.53%
Feb -11.54%
Mar -20.95%
Apr -15.86%
May -17.65%

For the five months that is -15.75%
an average loss of 307900 barrels/day

What did CERA expect UK production to do?

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21 comments on A little more on CERA

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