PEMEX WILL MAINTAIN PRODUCTION FROM MULTIPLE SOURCES [translator's best guess for a colloquialism]
It will produce 700 Mb/d less than last year
===
Production from Mexico's main oilfield, Cantarell, will fall rapidly from September this year.
According to the PEMEX 2007 Annual Operating Plan, the development will be producing 700 Mb/d less than the maximum achieved last year, which was 2.1 MMb/d.
With the remaining level of production from Cantarell it will be possible to maintain current levels of production of gasoline - in the Magna and Premium brands - which the country consumes. However, it is equivalent to 50% of the total run of PEMEX's six refineries.
The document, which EL UNIVERSAL has obtained, states that in the fourth quarter Cantarell will be producing 1.329 MMb/d due to its accelerating decline, which will make it harder to achieve the production and export targets fixed by the federal government fot this year.
The plan, which is the driver for the Mexican oil industry, states that as of the end of January of this year the reservoir, considered the sixth largest in the world, will produce 1.723 MMb/d on average, and in December it will be delivering 1.429 MMb/d. However, not even the additional volumes from the Ku-Maloob-Zaap development, which according to ex President Vicente Fox were going to offset the decline of Cantarell, will be enough to prevent the depletion of Mexico's exploitable reserves.
INVESTIGATION DEMANDED
Referring to the matter, Jorge Chavez Presa, the undersecretary for Energy Policy during the administration of Ernesto Zedillo, stated that it is necessary to undertake an audit of PEMEX's use of the additional resources which it received during Vicente Fox's administration, "which were much higher than its budget under the three previous administrations and which have not generated additional production or reserves, as we can see in Cantarell".
He stated that the ex president had not fulfilled his historic responsibility. "Every administration gave its successor the means to increase oil production. But Calderon inherited a declining industry".
Interviewed during the "2007 Seminar on Economic Perspectives on the Challenges for 2006-2012", organized by the Mexican Independent Institute of Technology, the professor said that there was a need for transparency and accountability in "a matter that affects us all".
"We need to know what happened to all the extra resources that PEMEX received. Was the wasted money invested under the PIDIREGAS framework? [translator's note: no idea what this is]. We need to be critical".
He explained that under Fox, institutions did not function properly, neither the State Comptroller nor the Senior Auditor, because "PEMEX had all the money in the world due to the high price of oil, and didn't know how to use it".
Nice. Certainly seems to fit the facts as described in the article. But isn't the gender wrong? Not the first word to flip gender between the Old World and the New World, of course.
Looks like a steep drop off. Anyone have any estimates on how much Ku-Maloob-Zaap will be producing? Must be huge if they expect it to make up the difference.
My mistake. That 200 Mb/d is a capacity UPGRADE (FPSO). Following article says the project is/was ramping up to 800 Mb/d (last paragraph). I don't know if that includes the 200 in the other article. As before, upper limit, possible, future, sometime etc.
Yeah I remember reading about it in the past and it being a very big field.
I live in Texas and took a year of Spanish in college, but am defintely not fluent. Is this article saying that current production is 263 kpd and going to ramp up to 800 kpd by 2011?
Numbers are correct, but article is dated 2002. So a lot of that increase has already happened and won't be replacing Cantarell.
From the article, it sound like K-M-Z is a cluster of mini Cantarell clones. I think they might be offset fault blocks of the same formation. Certainly the process parameters are similar, on a smaller scale.
I've started to wonder what the post-peak decline rates are going to look like for some of these regions where one field accounts, or accounted, for half or more of their production. It's somewhat unusual for a large producing region to be so dependent on one oil field. For example, the East Texas Field only accounted for about 7% of Texas production in 1972, when we peaked.
One example of what happens when one big field declines is Alaska, which had about a 6% decline rate in the first 12 years or so after Prudhoe Bay peaked, versus a long term decline rate of about 2% for the Lower 48.
In any case, Saudi Arabia, Mexico and Kuwait (all top 10 net oil exporters) are all in the same boat, hugely dependent on one oil field.
The problem is that, while these regions may show somewhat of a rebound in the future (but still well below their peak production), the short term decline rate in all three cases could be vicious, because they are so dependent on one field. Obviously, this appears to be precisely what we are seeing in Mexico.
No, the story says 200 kbpd (thousand barrels per day) not mbpd (million barrels per day). Please get the units right as it makes a rather large difference. Or, if you want to express it in mbpd, please do the conversion - 0.2mbpd.
Who? Stop raggin on the newbies. Teach'em how to do it. Member, Darwinian don't know the diff between a mill and a thousand, See what I'm seeing? Understand? Put your fuckin shirt on. Yo! ...We don't get fooled again... pick up my guitar and play... just like yesterday... the change it had to come... I knew it all along...
For goodness' sake let's not get into a flamewar over this. I would rather expend my energy on debating the date and nature of Peak Liquids, whether it's 90 Mbd, 90 mmb/d or even 85 million (were you confused by that?). Anyone who thinks that K-M-Z is producing 200 million barrels per day would probably misconstrue the entire article. There's nothing unusual about a language that requires meanings to be glarked from context - English would be a good example.
The upstream oil business takes a proudly independent view of unit system standardization. M, MM and MMM are customary abbreviations for thousand, million and (occasionally) billion. To confuse matters further, they can be either uppercase or lowercase. If we're being strictly metric (implied by k), wouldn't 200 mbpd be 200 milli-barrel-poise-day?
This will become a familiar song and dance; due to under/misplaced/bungled/poorly blah blah blah investments, the production from the Giga field will trend lower...never a mention of geology, because you can't beat up on geology and pass the buck.
Sadly, oil was the one thing that Mexico had going for it in a global trading situation. Shortly, they will be down to the, is it? 1.5 million barrels for domestic consumption, IF they aren't obliged to export that first and drive on the remainder. If the USA had the per capita oil consumption of Mexico it would be self sufficient. How about a Continental Energy Policy based upon per capita consumption and may the most efficient win? Given the solar potential of Mexico, I'd bet on a big transfer of capital. While business is presently chasing the lowest labor cost, at some point energy availability will drive location.
As I recall, Mexican hotels are required to have solar hot water heaters; in this regard they are ahead of us. Mind you, in Mexico it doesn't take much more than a bucket on the roof. But they have started.
'...because you can't beat up on geology and pass the buck.'
This is one of the things which makes peak oil such a pleasure - I grew up in a time when numerous lies and falsehoods were being exposed, and unquestioned beliefs being challenged, and then watched that process (with its own flaws, of course) come to a stop, and be written off as a 'low point' of American history.
When less comes out of the pipeline, and essentially ever less following that point, Americans can have a lovely discussion with reality. I, for one, expect to enjoy seeing how reality won't care about anyone's opinions (including mine - I am older now, and realize just how much evil humans do to one another, but hate is like that).
After all, they already dismissed people trying to deal with that problem decades ago.
In a way, it is amusing - when the American military left Karlsruhe, the base library was given as a gift to the city's library system. Over the years, as the library sold off its older books, I have collected a fairly interesting collection of 1970s books concering sustainable living, from organic gardening to insulation and building techniques to solar systems for heating and electricity. The amount of thought, talent, and wisdom in those books makes it hard to imagine they come from the same time and place in which magazines like People and Us were first launched.
Or not, seeing how America is today.
And as for some people who care about peak oil 'credibility' - the people concerned about this in 1978 weren't worried about 'credibility,' they were worried about how to live differently. Seems like they were the deluded ones, as Americans have no interest in being told how to live better, whether it is 6 weeks of vacation or universal health care, or functioning transit systems and walkable living spaces.
I, along with a good number of people, were wrong to think that oil production would clearly decline by the later 1980s, or before 2000. We weren't wrong in looking at what that meant, and how to prepare for it.
You need to watch SNL more. You shoulda seen the piece on the news about Steve Jobs and Apple. Don't get me started on Beckham.
The Future? You seen "Children of Men" yet, or what? They're talking about this as top ten this year. I'd say that's close. Read Slate. Saw it here last year. The Bond is always early.
I actually decided to check the phrase the 'future is now,' hoping for the Doonesbury strip - not often you read 'pox' in a comic, before realizing that the Doonesbury strips found on the net aren't indexed by text. It seems as if the expression is pretty commonly used - no surprise, but for some reason, I always thought it was a particularly apt expression from the end of the days when a true football fanatic was sitting in the White House. There are many things you can say about Nixon, but his attachment and understanding of football seems to have been a part of his life.
And this was the first time in my life America confronted massive abuse of presidential powers, a stupid and losing war where the solution was to expand it into surrounding countries, and a background of currency problems and no longer growing oil production. Which is a rear view memory, by the way.
Time for another martini - but Martini Bianco, which apparently has as much wormwood as absinthe, but less alcohol. Keeps the edge off, so to speak.
Thanks a million Plucky for this translation and posting.
INVESTIGATION DEMANDED
He stated that the ex president had not fulfilled his historic responsibility. "Every administration gave its successor the means to increase oil production. But Calderon inherited a declining industry".
Of course it is all Fox's fault. He should have figured out a way to keep Mexico's oil reservoirs from peaking and going into steep decline. Perhaps he should prayed to Our Lady of Guadeloupe to petation God to put more oil in the ground.
Sorry for the sarcasm but I just could not help it. Someone must always be at fault. Fault must always be found and the culprit must be ostracized from society.
Energy analyst and author David Shields has written extensively on Pemex. On NPR a few days ago, he predicted that overall Mexican production would fall by at least 800,000 bpd from late 2006 to 2007, because of the collapse in Cantarell's production--as predicted by the WSJ article last year.
In that article, the WSJ, quoting an internal Pemex report, noted that Cantarell's remaining oil column of about 800'--between an expanding gas cap and a rising water leg--was thinning at the rate of about 300' per year.
If you scroll down, you will see an image of Shields pointing to a Cantarell Field production graph. He is pointing out the more optimistic decline rate that Pemex was using in public versus the more pessimistic, i.e. realistic, decline rate.
Mexico has the following characteristics:
(1) Its largest field, Cantarell (accounting for more than half of its recent production), is a prolific carbonate reservoir, with a rapidly thinning oil column, between an expanding gas cap and a rising water leg.
(2) It has consumed more than half of its recoverable reserves, based on the HL method.
(3) The operator has issued misleading information about the estimated decline rate of its largest field.
(4) Its production is declining.
Saudi Arabia has the following characteristics:
(1) Its largest field, Ghawar (accounting for more than half of its recent production), is a prolific carbonate reservoir, with a rapidly thinning oil column, between an expanding gas cap and a rising water leg.
(2) It has consumed more than half of its recoverable reserves, based on the HL method.
(3) The operator is strongly suspected of issuing misleading information about the estimated decline rate of its largest field.
(4) Its production is declining.
I have repeatedly described Ghawar and Cantarell--which account or accounted for about 10% of world crude oil production and which account or accounted for more than 20% of the net exporters by the top 10 net exporters in 2005--as two warning beacons burning brightly in the night sky, heralding the onset of Peak Oil.
As I pointed out yesterday, one of the odd things about the fourth quarter was the plunge in US oil imports, while Chinese oil imports were hitting new records. Let's see, where is Bush sending large US military forces?
Nope. Nothing to worry about. Continue buying large debt financed SUV's to drive to and from suburban mortgages.
Thanks for this propitiously timed thread, posters. Has anyone on this board heard of Larry Walker?
From www[dot]madisonpeakoil[dot]blogspot[dot]com
Mexico's Coming Oil Crisis
January 23
A presentation by Larry Walker
Madison, WI - Exact location will be posted here as soon as it's determined.
7:00 p.m.
Mexico's Cantarell oil field is about to play out a classic peak-and-rapid-decline scenario over the next 3 years. This will pose special challenges for Mexico's government, its national oil company Pemex, the U.S., and the world oil market.
Sponsored by Community Action on Latin America.
In English with Spanish translation.
More information from Carol Bracewell.
this will completely accelerate the illegal immigrant situation, where Mexico and Canada join the U.S. With one currency and probably one sovereignty! It's gonna be a mess, but Queen Hillary will be in charge by then.
but as long as there is ESPN, soap network, rosie vs donald, etc.... who the heck cares?
Saudi crude oil production (EIA data; crude oil = crude + condensate) dropped from 9.6 mbpd in 9/05 to a projected 8.5 mbpd in 2/07.
From 1/06 to 7/06, Saudi production dropped from 9.4 to 9.3 mbpd--by 100,000 bpd. The Saudi oil minister blamed the "voluntary" decline on an inability to find buyers, even for "their light, sweet oil."
Apparently, the Iraqis and Russians were looked harder for buyers, because they increased their production by 830,000 bpd from 1/06 to 7/06.
Let's see, for every barrel of oil that the Saudis couldn't find buyers for in July, relative to January, the Iraqis and Russians were able to sell 8.3 barrels.
Over this January to July time frame, US light, sweet spot prices went from $61.63 to $74.41 (I realize that different grades of crude sell for different prices in different parts of the world).
Two possibitlies:
(1) Saudi production is declining--as predicted by the mathematical and historical models--despite their best efforts, because of depletion or
(2) The Saudis are voluntarily cutting back production as oil prices hit the highest US nominal level in history--because they couldn't find buyers for all of their oil, even "their light, sweet oil"--while Iraq and Russia were able to sell an additional 830,000 bpd (even "their light, sweet oil") over the same time period.
Given that we have an example of the operator of the world's second largest oil field lying to the public about their largest field, which of these two scenarios for Saudi Arabia is more likely?
Did you notice that in Plucky's translation, Cantarell is "considered the sixth largest field in the world"? Would they be talking about remaining reserves in the field? Or have they never let their people know how big the field was to begin with?
The row over money at Pemex is interesting too: These things tend to easily get out of hand, in a volatile political climate combined with sharp decreases in resources AND revenues. Reminiscent of the GAO mentioning $450 bilion was missing from US coffers last year. Just disappeared. Just that Pemex revenues are an order of magnitude bigger for Mexico.
By the way, your Ghawar-Cantarell comparison looks solid and spot on. It's a really bright idea to use Ghawar to bankrupt Iran, the apparent latest bright genie to come from the White House basement.
Did you notice that in Plucky's translation, Cantarell is "considered the sixth largest field in the world"? Would they be talking about remaining reserves in the field? Or have they never let their people know how big the field was to begin with?
Yes, they were probably talking about remaining reserves. When Cantarell was producing 2.1 mb/d it was definitely the world's second largest field in number of barrels per day produced.
One of these days, one of you pansies is gonna actually publish some real numbers on Cantarell. You know Westexas can't do it. So why don't you do it yourself? Why do you wait for Oil CEO? Zeus himself asks this question. Hell Awaits.
Apparently, the Iraqis and Russians were looked harder for buyers, because they increased their production by 830,000 bpd from 1/06 to 7/06.
Or they may have been willing to sell for a lower price. As I pointed out yesterday, about half of the members of OPEC - including Iran, saw their production drop over the same period. Different countries manage their oil in different ways, just like different companies have different philosophies. But again, you ignore the data that doesn't support your argument. It seems that to you that data simply doesn't exist.
I also read something interesting a few days ago. I forget how many years ago the article said, but there were 15 oil fields capable of producing more than 1 million barrels per day. That number has dwindled to 4. Yet during that time worldwide oil production has greatly increased. That's one reason it is a mistake to point to these majors and ask how world oil production will increase once the other 4 are all definitely in decline. Well, it isn't like there isn't a precedent for that.
How many countries, showing reduced production from 1/06 to 7/06, complained about an inability to find buyers for their oil, even "their light, sweet oil?"
Robert,
Let me get this straight.
The number of fields capable of producing one mbpd or more has dropped from 15 to 4.
At least three of those remaining four are in decline or crashing. We just can't confirm that Ghawar is in decline or crashing, but we know that they had to redrill the field with horizontal wells, because the vertical wells watered out, and they are still--at best--getting one barrel of water for every two barrels of oil.
The only new one mbpd and larger field on the horizon is the Kashagan Field that--at best--won't hit peak production until 2020.
You are using all of the above as evidence for rising world oil production?
How many countries, showing reduced production from 1/06 to 7/06, complained about an inability to find buyers for their oil, even "their light, sweet oil?"
So then you think that Iran, a country that has not peaked, just lowered production because...? Obviously because they didn't have enough buyers to justify keeping the production rate high.
You are using all of the above as evidence for rising world oil production?
As I said to Ron yesterday, no need for straw men. Let's talk about what we know. I found the reference:
20 years ago, 15 fields had the capacity to produce more than 1,000,000 b/d. Today only four field can produce that much.
So, in the past 20 years, 9 fields capable of producing more than 1 million bpd dropped out of the super-major category, leaving only 4 of the orginal 15. How did world oil production fare? Was it sharply down? No, it was sharply up. World C+C production during the past 20 years has increased by almost 20 million bpd.
The lesson here? Just because the remaining 4 fields are in or will shortly be in decline, does not mean the entire world will be in decline. Smaller fields may pick up the slack, as evidenced by what happened in the past 20 years. I am not suggesting that world oil production won't start to decline 3-5 years from now. But I am suggesting that arguing for a worldwide decline based on the decline of the remaining 4 majors ignores the historical precedent.
The lesson here? Just because the remaining 4 fields are in or will shortly be in decline, does not mean the entire world will be in decline.
Let's back up.
Daqing is actually producing less than one mbpd with a 90% water cut.
The Kuwaitis have admitted that Burgan is in decline. I have seen references to rising water cuts, but I haven't seen a specific number.
Cantarell is crashing, with up to a 40% annual decline rate as their remaining oil column of 800' (as of early 2006) thins at about 300' per year.
Ghawar had to be redeveloped because the vertical wells watered out, and the horizontal wells still have, at best, a one third water cut.
So, three of the four are in decline or crashing. We just can't confirm the Ghawar decline.
These fields account, or accounted, for around 14% of world crude production.
The other fields that were producing one mbpd or more just didn't disappear. They are still producing. For example, even though Prudhoe Bay has a 75% water cut, it is still producing about 400,000 bpd. So, we are still getting sizable contributions from the sum of the older fields. But what happens at peak is that the new production coming on line can't make up for the underlying decline of the existing production.
As Deffeyes' mathematical model predicted, world crude production is declining.
How in the world can you expect to see rising production when: (1) We are past the 50% of Qt mark (and declining as predicted) and (2) it's a near certainty that all four of the current super giants are in decline or crashing?
Or let me put it this way. Let's assume that Ghawar is declining. I'm not sure when the first one mbpd and larger field came on line, but it was decades ago. During this time period, for decades, we have always had stable to rising production from one mbpd and larger oil fields.
Assuming Ghawar is declining, we are now where we have never been in the modern oil business--with all past and current one mbpd and larger oil fields in decline. This is supposed to lead to rising oil production?
I might add, that what you are in effect saying is that Saudi Arabia can peak, without the world peaking. I think that this is literally the first time I have heard this argument.
The other fields that were producing one mbpd or more just didn't disappear.
Neither will Ghawar, Burgan, etc.
How in the world can you expect to see rising production when: (1) We are past the 50% of Qt mark (and declining as predicted) and (2) it's a near certainty that all four of the current super giants are in decline or crashing?
How did production go up by 20 million bpd when 9 out of the 15 super giants went into decline? That's the point you are missing. There is historical precedent here. You are just choosing to ignore it. What you are ignoring is that a number of fields producing less than 1 million bpd made up for all of the production from those in decline, and a whole lot more.
I might add, that what you are in effect saying is that Saudi Arabia can peak, without the world peaking.
That's not at all what I am saying. I am saying that Saudi has a lot of smaller fields that can make up for Ghawar's decline. Again, we have historical precedent for this, because it is exactly what happened when the past 9 super giants declined.
Robert,
In these frequent exchanges between you and WT I don't think you have mentioned the decision of KSA not to honor the contract amounts of crude for certain Asian customers. Can this reported fact be reconciled with your assertion that the market conditions supported their claim that they couldn't find buyers for their oil?
In these frequent exchanges between you and WT I don't think you have mentioned the decision of KSA not to honor the contract amounts of crude for certain Asian customers. Can this reported fact be reconciled with your assertion that the market conditions supported their claim that they couldn't find buyers for their oil?
The Asian event happened after oil prices had fallen sharply, and OPEC had agreed to production cuts. The other event happened while prices were high, but inventories were very full and rising. I don't think it takes a rocket scientist to understand that inventories that are at record levels and rising means purchases are going to have to slow down. Hence, their statement is consistent with what was going on with inventories at the time.
Swco posted this link last night.
http://www.eluniversal.com.mx/finanzas/55660.html
"The production of the main oil deposit of Mexico, Cantarell, will collapse drastically as of September of this year."
It is in Spanish and I would just love to read it. Can anyone translate it and post the text on TOD? It is quite short and should not be a problem.
Ron Patterson
Sure thing, old chap.
PEMEX WILL MAINTAIN PRODUCTION FROM MULTIPLE SOURCES [translator's best guess for a colloquialism]
It will produce 700 Mb/d less than last year
===
Production from Mexico's main oilfield, Cantarell, will fall rapidly from September this year.
According to the PEMEX 2007 Annual Operating Plan, the development will be producing 700 Mb/d less than the maximum achieved last year, which was 2.1 MMb/d.
With the remaining level of production from Cantarell it will be possible to maintain current levels of production of gasoline - in the Magna and Premium brands - which the country consumes. However, it is equivalent to 50% of the total run of PEMEX's six refineries.
The document, which EL UNIVERSAL has obtained, states that in the fourth quarter Cantarell will be producing 1.329 MMb/d due to its accelerating decline, which will make it harder to achieve the production and export targets fixed by the federal government fot this year.
The plan, which is the driver for the Mexican oil industry, states that as of the end of January of this year the reservoir, considered the sixth largest in the world, will produce 1.723 MMb/d on average, and in December it will be delivering 1.429 MMb/d. However, not even the additional volumes from the Ku-Maloob-Zaap development, which according to ex President Vicente Fox were going to offset the decline of Cantarell, will be enough to prevent the depletion of Mexico's exploitable reserves.
INVESTIGATION DEMANDED
Referring to the matter, Jorge Chavez Presa, the undersecretary for Energy Policy during the administration of Ernesto Zedillo, stated that it is necessary to undertake an audit of PEMEX's use of the additional resources which it received during Vicente Fox's administration, "which were much higher than its budget under the three previous administrations and which have not generated additional production or reserves, as we can see in Cantarell".
He stated that the ex president had not fulfilled his historic responsibility. "Every administration gave its successor the means to increase oil production. But Calderon inherited a declining industry".
Interviewed during the "2007 Seminar on Economic Perspectives on the Challenges for 2006-2012", organized by the Mexican Independent Institute of Technology, the professor said that there was a need for transparency and accountability in "a matter that affects us all".
"We need to know what happened to all the extra resources that PEMEX received. Was the wasted money invested under the PIDIREGAS framework? [translator's note: no idea what this is]. We need to be critical".
He explained that under Fox, institutions did not function properly, neither the State Comptroller nor the Senior Auditor, because "PEMEX had all the money in the world due to the high price of oil, and didn't know how to use it".
Better title
PEMEX STILL HAVING PRODUCTION PROBLEMS
literally
PRODUCTION FROM PEMEX IS STILL ITCHY
(A "Picada" is a big platter of several kind of finger food - hence my initial guess. I was too proud to use the help of Google Translate).
From a native Spanish speaker,
PEMEX PRODUCTION STAYS IN A NOSEDIVE
In Spanish Spanish, at least, "En picado" is the way airplanes fall when they stall.
http://www.spanishdict.com/AS.cfm?e=picado
Nice. Certainly seems to fit the facts as described in the article. But isn't the gender wrong? Not the first word to flip gender between the Old World and the New World, of course.
Thanks for the translation. You too, Plucky.
Looks like a steep drop off. Anyone have any estimates on how much Ku-Maloob-Zaap will be producing? Must be huge if they expect it to make up the difference.
This story says 200 Mb/d - doesn't even come close to plugging the gap:
http://www.rigzone.com/news/article.asp?a_id=28090
Remember that 200 Mb/d is an UPPER limit on production which MAY be reached at SOME TIME in the future...
My mistake. That 200 Mb/d is a capacity UPGRADE (FPSO). Following article says the project is/was ramping up to 800 Mb/d (last paragraph). I don't know if that includes the 200 in the other article. As before, upper limit, possible, future, sometime etc.
http://www.pemex.com/index.cfm?action=content§ionID=8&catID=40&subca...
Yeah I remember reading about it in the past and it being a very big field.
I live in Texas and took a year of Spanish in college, but am defintely not fluent. Is this article saying that current production is 263 kpd and going to ramp up to 800 kpd by 2011?
Numbers are correct, but article is dated 2002. So a lot of that increase has already happened and won't be replacing Cantarell.
From the article, it sound like K-M-Z is a cluster of mini Cantarell clones. I think they might be offset fault blocks of the same formation. Certainly the process parameters are similar, on a smaller scale.
I've started to wonder what the post-peak decline rates are going to look like for some of these regions where one field accounts, or accounted, for half or more of their production. It's somewhat unusual for a large producing region to be so dependent on one oil field. For example, the East Texas Field only accounted for about 7% of Texas production in 1972, when we peaked.
One example of what happens when one big field declines is Alaska, which had about a 6% decline rate in the first 12 years or so after Prudhoe Bay peaked, versus a long term decline rate of about 2% for the Lower 48.
In any case, Saudi Arabia, Mexico and Kuwait (all top 10 net oil exporters) are all in the same boat, hugely dependent on one oil field.
The problem is that, while these regions may show somewhat of a rebound in the future (but still well below their peak production), the short term decline rate in all three cases could be vicious, because they are so dependent on one field. Obviously, this appears to be precisely what we are seeing in Mexico.
No, the story says 200 kbpd (thousand barrels per day) not mbpd (million barrels per day). Please get the units right as it makes a rather large difference. Or, if you want to express it in mbpd, please do the conversion - 0.2mbpd.
Who? Stop raggin on the newbies. Teach'em how to do it. Member, Darwinian don't know the diff between a mill and a thousand, See what I'm seeing? Understand? Put your fuckin shirt on. Yo! ...We don't get fooled again... pick up my guitar and play... just like yesterday... the change it had to come... I knew it all along...
For goodness' sake let's not get into a flamewar over this. I would rather expend my energy on debating the date and nature of Peak Liquids, whether it's 90 Mbd, 90 mmb/d or even 85 million (were you confused by that?). Anyone who thinks that K-M-Z is producing 200 million barrels per day would probably misconstrue the entire article. There's nothing unusual about a language that requires meanings to be glarked from context - English would be a good example.
The upstream oil business takes a proudly independent view of unit system standardization. M, MM and MMM are customary abbreviations for thousand, million and (occasionally) billion. To confuse matters further, they can be either uppercase or lowercase. If we're being strictly metric (implied by k), wouldn't 200 mbpd be 200 milli-barrel-poise-day?
This will become a familiar song and dance; due to under/misplaced/bungled/poorly blah blah blah investments, the production from the Giga field will trend lower...never a mention of geology, because you can't beat up on geology and pass the buck.
Sadly, oil was the one thing that Mexico had going for it in a global trading situation. Shortly, they will be down to the, is it? 1.5 million barrels for domestic consumption, IF they aren't obliged to export that first and drive on the remainder. If the USA had the per capita oil consumption of Mexico it would be self sufficient. How about a Continental Energy Policy based upon per capita consumption and may the most efficient win? Given the solar potential of Mexico, I'd bet on a big transfer of capital. While business is presently chasing the lowest labor cost, at some point energy availability will drive location.
As I recall, Mexican hotels are required to have solar hot water heaters; in this regard they are ahead of us. Mind you, in Mexico it doesn't take much more than a bucket on the roof. But they have started.
'...because you can't beat up on geology and pass the buck.'
This is one of the things which makes peak oil such a pleasure - I grew up in a time when numerous lies and falsehoods were being exposed, and unquestioned beliefs being challenged, and then watched that process (with its own flaws, of course) come to a stop, and be written off as a 'low point' of American history.
When less comes out of the pipeline, and essentially ever less following that point, Americans can have a lovely discussion with reality. I, for one, expect to enjoy seeing how reality won't care about anyone's opinions (including mine - I am older now, and realize just how much evil humans do to one another, but hate is like that).
After all, they already dismissed people trying to deal with that problem decades ago.
In a way, it is amusing - when the American military left Karlsruhe, the base library was given as a gift to the city's library system. Over the years, as the library sold off its older books, I have collected a fairly interesting collection of 1970s books concering sustainable living, from organic gardening to insulation and building techniques to solar systems for heating and electricity. The amount of thought, talent, and wisdom in those books makes it hard to imagine they come from the same time and place in which magazines like People and Us were first launched.
Or not, seeing how America is today.
And as for some people who care about peak oil 'credibility' - the people concerned about this in 1978 weren't worried about 'credibility,' they were worried about how to live differently. Seems like they were the deluded ones, as Americans have no interest in being told how to live better, whether it is 6 weeks of vacation or universal health care, or functioning transit systems and walkable living spaces.
I, along with a good number of people, were wrong to think that oil production would clearly decline by the later 1980s, or before 2000. We weren't wrong in looking at what that meant, and how to prepare for it.
The future is now - enjoy it.
You need to watch SNL more. You shoulda seen the piece on the news about Steve Jobs and Apple. Don't get me started on Beckham.
The Future? You seen "Children of Men" yet, or what? They're talking about this as top ten this year. I'd say that's close. Read Slate. Saw it here last year. The Bond is always early.
I actually decided to check the phrase the 'future is now,' hoping for the Doonesbury strip - not often you read 'pox' in a comic, before realizing that the Doonesbury strips found on the net aren't indexed by text. It seems as if the expression is pretty commonly used - no surprise, but for some reason, I always thought it was a particularly apt expression from the end of the days when a true football fanatic was sitting in the White House. There are many things you can say about Nixon, but his attachment and understanding of football seems to have been a part of his life.
And this was the first time in my life America confronted massive abuse of presidential powers, a stupid and losing war where the solution was to expand it into surrounding countries, and a background of currency problems and no longer growing oil production. Which is a rear view memory, by the way.
Time for another martini - but Martini Bianco, which apparently has as much wormwood as absinthe, but less alcohol. Keeps the edge off, so to speak.
Thanks a million Plucky for this translation and posting.
Of course it is all Fox's fault. He should have figured out a way to keep Mexico's oil reservoirs from peaking and going into steep decline. Perhaps he should prayed to Our Lady of Guadeloupe to petation God to put more oil in the ground.
Sorry for the sarcasm but I just could not help it. Someone must always be at fault. Fault must always be found and the culprit must be ostracized from society.
Ron Patterson
edit:
nevermind better version already posted
Energy analyst and author David Shields has written extensively on Pemex. On NPR a few days ago, he predicted that overall Mexican production would fall by at least 800,000 bpd from late 2006 to 2007, because of the collapse in Cantarell's production--as predicted by the WSJ article last year.
In that article, the WSJ, quoting an internal Pemex report, noted that Cantarell's remaining oil column of about 800'--between an expanding gas cap and a rising water leg--was thinning at the rate of about 300' per year.
This is a link to an article about a presentation by Shields: http://socrates.berkeley.edu:7001/Events/spring2006/02-09-06-shields/ind...
If you scroll down, you will see an image of Shields pointing to a Cantarell Field production graph. He is pointing out the more optimistic decline rate that Pemex was using in public versus the more pessimistic, i.e. realistic, decline rate.
Mexico has the following characteristics:
(1) Its largest field, Cantarell (accounting for more than half of its recent production), is a prolific carbonate reservoir, with a rapidly thinning oil column, between an expanding gas cap and a rising water leg.
(2) It has consumed more than half of its recoverable reserves, based on the HL method.
(3) The operator has issued misleading information about the estimated decline rate of its largest field.
(4) Its production is declining.
Saudi Arabia has the following characteristics:
(1) Its largest field, Ghawar (accounting for more than half of its recent production), is a prolific carbonate reservoir, with a rapidly thinning oil column, between an expanding gas cap and a rising water leg.
(2) It has consumed more than half of its recoverable reserves, based on the HL method.
(3) The operator is strongly suspected of issuing misleading information about the estimated decline rate of its largest field.
(4) Its production is declining.
I have repeatedly described Ghawar and Cantarell--which account or accounted for about 10% of world crude oil production and which account or accounted for more than 20% of the net exporters by the top 10 net exporters in 2005--as two warning beacons burning brightly in the night sky, heralding the onset of Peak Oil.
As I pointed out yesterday, one of the odd things about the fourth quarter was the plunge in US oil imports, while Chinese oil imports were hitting new records. Let's see, where is Bush sending large US military forces?
Nope. Nothing to worry about. Continue buying large debt financed SUV's to drive to and from suburban mortgages.
Thanks for this propitiously timed thread, posters. Has anyone on this board heard of Larry Walker?
From www[dot]madisonpeakoil[dot]blogspot[dot]com
Mexico's Coming Oil Crisis
January 23
A presentation by Larry Walker
Madison, WI - Exact location will be posted here as soon as it's determined.
7:00 p.m.
Mexico's Cantarell oil field is about to play out a classic peak-and-rapid-decline scenario over the next 3 years. This will pose special challenges for Mexico's government, its national oil company Pemex, the U.S., and the world oil market.
Sponsored by Community Action on Latin America.
In English with Spanish translation.
More information from Carol Bracewell.
this will completely accelerate the illegal immigrant situation, where Mexico and Canada join the U.S. With one currency and probably one sovereignty! It's gonna be a mess, but Queen Hillary will be in charge by then.
but as long as there is ESPN, soap network, rosie vs donald, etc.... who the heck cares?
Saudi crude oil production (EIA data; crude oil = crude + condensate) dropped from 9.6 mbpd in 9/05 to a projected 8.5 mbpd in 2/07.
From 1/06 to 7/06, Saudi production dropped from 9.4 to 9.3 mbpd--by 100,000 bpd. The Saudi oil minister blamed the "voluntary" decline on an inability to find buyers, even for "their light, sweet oil."
Apparently, the Iraqis and Russians were looked harder for buyers, because they increased their production by 830,000 bpd from 1/06 to 7/06.
Let's see, for every barrel of oil that the Saudis couldn't find buyers for in July, relative to January, the Iraqis and Russians were able to sell 8.3 barrels.
Over this January to July time frame, US light, sweet spot prices went from $61.63 to $74.41 (I realize that different grades of crude sell for different prices in different parts of the world).
Two possibitlies:
(1) Saudi production is declining--as predicted by the mathematical and historical models--despite their best efforts, because of depletion or
(2) The Saudis are voluntarily cutting back production as oil prices hit the highest US nominal level in history--because they couldn't find buyers for all of their oil, even "their light, sweet oil"--while Iraq and Russia were able to sell an additional 830,000 bpd (even "their light, sweet oil") over the same time period.
Given that we have an example of the operator of the world's second largest oil field lying to the public about their largest field, which of these two scenarios for Saudi Arabia is more likely?
Did you notice that in Plucky's translation, Cantarell is "considered the sixth largest field in the world"? Would they be talking about remaining reserves in the field? Or have they never let their people know how big the field was to begin with?
The row over money at Pemex is interesting too: These things tend to easily get out of hand, in a volatile political climate combined with sharp decreases in resources AND revenues. Reminiscent of the GAO mentioning $450 bilion was missing from US coffers last year. Just disappeared. Just that Pemex revenues are an order of magnitude bigger for Mexico.
By the way, your Ghawar-Cantarell comparison looks solid and spot on. It's a really bright idea to use Ghawar to bankrupt Iran, the apparent latest bright genie to come from the White House basement.
6th in terms of reserves, 2nd in terms of production rate.
Ah, that explains the discrepencies.
I've always wondered about that.
Why? You're a democrat. No discrepancies there. I've never wondered about you. Tcck. Tcck! Tcck. Is this thing on? Heeellllloooo?
It is at times like these that I wish Super G would take me on as his personal consultant/trainer/publicist/trainer
...and change his name to...
Super Jihad
(ya gotta see Alexander and Colin to understand... and Athens and Ollie Stone)
Philip of freaking Macedon. You'll make a musician out of him yet! Sailorman will laugh so hard when he sees this movie his left nut will fall off.
Yes, they were probably talking about remaining reserves. When Cantarell was producing 2.1 mb/d it was definitely the world's second largest field in number of barrels per day produced.
Ron Patterson
One of these days, one of you pansies is gonna actually publish some real numbers on Cantarell. You know Westexas can't do it. So why don't you do it yourself? Why do you wait for Oil CEO? Zeus himself asks this question. Hell Awaits.
Apparently, the Iraqis and Russians were looked harder for buyers, because they increased their production by 830,000 bpd from 1/06 to 7/06.
Or they may have been willing to sell for a lower price. As I pointed out yesterday, about half of the members of OPEC - including Iran, saw their production drop over the same period. Different countries manage their oil in different ways, just like different companies have different philosophies. But again, you ignore the data that doesn't support your argument. It seems that to you that data simply doesn't exist.
I also read something interesting a few days ago. I forget how many years ago the article said, but there were 15 oil fields capable of producing more than 1 million barrels per day. That number has dwindled to 4. Yet during that time worldwide oil production has greatly increased. That's one reason it is a mistake to point to these majors and ask how world oil production will increase once the other 4 are all definitely in decline. Well, it isn't like there isn't a precedent for that.
How many countries, showing reduced production from 1/06 to 7/06, complained about an inability to find buyers for their oil, even "their light, sweet oil?"
Robert,
Let me get this straight.
The number of fields capable of producing one mbpd or more has dropped from 15 to 4.
At least three of those remaining four are in decline or crashing. We just can't confirm that Ghawar is in decline or crashing, but we know that they had to redrill the field with horizontal wells, because the vertical wells watered out, and they are still--at best--getting one barrel of water for every two barrels of oil.
The only new one mbpd and larger field on the horizon is the Kashagan Field that--at best--won't hit peak production until 2020.
You are using all of the above as evidence for rising world oil production?
How many countries, showing reduced production from 1/06 to 7/06, complained about an inability to find buyers for their oil, even "their light, sweet oil?"
So then you think that Iran, a country that has not peaked, just lowered production because...? Obviously because they didn't have enough buyers to justify keeping the production rate high.
You are using all of the above as evidence for rising world oil production?
As I said to Ron yesterday, no need for straw men. Let's talk about what we know. I found the reference:
http://www.peakoil.net/AIMseminar/UU_AIM_Robelius.pdf
It was from Thursday's Drumbeat. It says:
20 years ago, 15 fields had the capacity to produce more than 1,000,000 b/d. Today only four field can produce that much.
So, in the past 20 years, 9 fields capable of producing more than 1 million bpd dropped out of the super-major category, leaving only 4 of the orginal 15. How did world oil production fare? Was it sharply down? No, it was sharply up. World C+C production during the past 20 years has increased by almost 20 million bpd.
The lesson here? Just because the remaining 4 fields are in or will shortly be in decline, does not mean the entire world will be in decline. Smaller fields may pick up the slack, as evidenced by what happened in the past 20 years. I am not suggesting that world oil production won't start to decline 3-5 years from now. But I am suggesting that arguing for a worldwide decline based on the decline of the remaining 4 majors ignores the historical precedent.
Let's back up.
Daqing is actually producing less than one mbpd with a 90% water cut.
The Kuwaitis have admitted that Burgan is in decline. I have seen references to rising water cuts, but I haven't seen a specific number.
Cantarell is crashing, with up to a 40% annual decline rate as their remaining oil column of 800' (as of early 2006) thins at about 300' per year.
Ghawar had to be redeveloped because the vertical wells watered out, and the horizontal wells still have, at best, a one third water cut.
So, three of the four are in decline or crashing. We just can't confirm the Ghawar decline.
These fields account, or accounted, for around 14% of world crude production.
The other fields that were producing one mbpd or more just didn't disappear. They are still producing. For example, even though Prudhoe Bay has a 75% water cut, it is still producing about 400,000 bpd. So, we are still getting sizable contributions from the sum of the older fields. But what happens at peak is that the new production coming on line can't make up for the underlying decline of the existing production.
As Deffeyes' mathematical model predicted, world crude production is declining.
How in the world can you expect to see rising production when: (1) We are past the 50% of Qt mark (and declining as predicted) and (2) it's a near certainty that all four of the current super giants are in decline or crashing?
Or let me put it this way. Let's assume that Ghawar is declining. I'm not sure when the first one mbpd and larger field came on line, but it was decades ago. During this time period, for decades, we have always had stable to rising production from one mbpd and larger oil fields.
Assuming Ghawar is declining, we are now where we have never been in the modern oil business--with all past and current one mbpd and larger oil fields in decline. This is supposed to lead to rising oil production?
I might add, that what you are in effect saying is that Saudi Arabia can peak, without the world peaking. I think that this is literally the first time I have heard this argument.
The other fields that were producing one mbpd or more just didn't disappear.
Neither will Ghawar, Burgan, etc.
How in the world can you expect to see rising production when: (1) We are past the 50% of Qt mark (and declining as predicted) and (2) it's a near certainty that all four of the current super giants are in decline or crashing?
How did production go up by 20 million bpd when 9 out of the 15 super giants went into decline? That's the point you are missing. There is historical precedent here. You are just choosing to ignore it. What you are ignoring is that a number of fields producing less than 1 million bpd made up for all of the production from those in decline, and a whole lot more.
I might add, that what you are in effect saying is that Saudi Arabia can peak, without the world peaking.
That's not at all what I am saying. I am saying that Saudi has a lot of smaller fields that can make up for Ghawar's decline. Again, we have historical precedent for this, because it is exactly what happened when the past 9 super giants declined.
Robert,
In these frequent exchanges between you and WT I don't think you have mentioned the decision of KSA not to honor the contract amounts of crude for certain Asian customers. Can this reported fact be reconciled with your assertion that the market conditions supported their claim that they couldn't find buyers for their oil?
In these frequent exchanges between you and WT I don't think you have mentioned the decision of KSA not to honor the contract amounts of crude for certain Asian customers. Can this reported fact be reconciled with your assertion that the market conditions supported their claim that they couldn't find buyers for their oil?
The Asian event happened after oil prices had fallen sharply, and OPEC had agreed to production cuts. The other event happened while prices were high, but inventories were very full and rising. I don't think it takes a rocket scientist to understand that inventories that are at record levels and rising means purchases are going to have to slow down. Hence, their statement is consistent with what was going on with inventories at the time.
The reality is both you and WT pick the data and interpretation you chose to focus on and neither can actually