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209 comments on DrumBeat: January 19, 2007

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westexas on January 19, 2007 - 4:54pm Permalink | Subthread | Parent | Comments top

The first symptoms of a genuine oil crisis are becoming more and more evident.

Expect to see more and more new stories like this in the months ahead.

BTW, David Shields is putting the decline in Pemex production this year at least 800,000 bpd, apparently from 12/06 to 12/07. IMO, the only real difference between Pemex & Cantarell and Aramco & Ghawar (other than production rates) is that Pemex has (grudgingly) admitted to the production decline at Cantarell, while still trying to hide their true estimate of the production decline.

A question regarding oil prices

The most commonly quoted oil price in the US is West Texas Intermediate, or light/sweet crude oil. So, why is the Total Liquids production number used so widely?

It's like pricing meat based on the steak price, but when you ask how many pounds of meat a butcher has, he gives you the number of pounds of beef, chicken, pork, soy protein, etc.

If we are going to talk about dollars per barrel of light/sweet crude oil, why don't we stick to barrels per day of crude + condensate? Or, if you are going to talk about Total Liquids, shouldn't you talk about the prices of crude oil, propane, butane, ethanol, Orimulsion, etc.?

Edit:

I think I made a mistake on the David Shields reference. I thought I heard this NPR story in 2006, but it looks like it was on 1/2/07, so I think that Shields is talking about a 800,000 bpd drop from 2007 to 2008.

NPR story:

http://marketplace.publicradio.org/shows/2007/01/02/PM200701024.html
Pemex faces change or drying up
Tuesday, January 02, 2007

Mexico's main source of oil is the Cantarell field. It's the second most productive field in the world after one in Saudi Arabia. And Cantarell's running dry.

DAVID SHIELDS: Cantarell is probably going to decline very sharply in the next three years, starting now.

That's energy analyst David Shields, author of two books on Pemex.

SHIELDS: Mexico currently produces just under 3.3 million barrels a day. We can expect production to fall to 2.5 million barrels a day, or perhaps even less next year.

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totoneila on January 19, 2007 - 5:24pm Permalink | Subthread | Parent | Comments top

Hello WT,

The key question is:

Does Bush & Calderon believe Pemex, or David Shields on who has the more accurate depletion rate, and what are they planning to do about it?

Either way, learning Spanish could be a big plus here in the US in the years ahead.

Bob Shaw in Phx,Az ¿Son los seres humanos más elegantes que la levadura?

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westexas on January 19, 2007 - 5:41pm Permalink | Subthread | Parent | Comments top

I don't think that it is a coincidence that just as we see accumulating evidence of contracting net export capacity worldwide that we see a massive expansion of the US military presence in the Middle East.

From 2004 to 2005, it looks like Mexico's domestic total liquids consumption increased by 5%. Shields is estimating a one year decline in production of about 25%.

If Shields is right, Mexico's net total liquids exports could drop from 1.7 mbpd in 2005 to 500,000 bpd in 2008. This is consistent with the WSJ article last year. I think that they said that Mexico could cease to be a net exporter by as soon as 2010.

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DelusionaL on January 20, 2007 - 8:11pm Permalink | Subthread | Parent | Comments top

WT,
Do you know roughly how much oil the US imports from Mexico? I thought it was a good sized chunk.

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Freddy Hutter on January 21, 2007 - 12:03am Permalink | Subthread | Parent | Comments top

Here are two tables. Crude & Total Petroleum Products. Sorry for the crappy formatting. u can get see the originating tables at EIA:

Crude Oil Imports (Top 15 Countries)
(Thousand Barrels per Day)
Country Nov-06 Oct-06 YTD 2006 Nov-05 Jan - Nov 2005

CANADA 2,065 1,704 1,778 1,756 1,609
MEXICO 1,462 1,481 1,606 1,658 1,542
SAUDI ARABIA 1,444 1,322 1,417 1,267 1,445
VENEZUELA 1,069 1,125 1,146 1,009 1,246
NIGERIA 919 1,049 1,046 1,163 1,068
IRAQ 589 505 567 572 540
ANGOLA 505 506 504 658 458
ALGERIA 253 449 352 265 230
KUWAIT 253 234 180 273 223
ECUADOR 243 315 274 264 270
BRAZIL 156 171 134 65 88
UNITED KINGDOM 119 74 131 229 241
CHAD 118 109 93 33 78
NORWAY 81 120 97 103 124
AZERBAIJAN 77 88 23 0 0

Total Imports of Petroleum (Top 15 Countries)
(Thousand Barrels per Day)
Country Nov-06 Oct-06 YTD 2006 Nov-05 Jan - Nov 2005

--------------------------------------------------------------------------------

CANADA 2,584 2,144 2,291 2,305 2,149
MEXICO 1,571 1,646 1,730 1,777 1,650
SAUDI ARABIA 1,489 1,382 1,459 1,370 1,543
VENEZUELA 1,234 1,354 1,418 1,258 1,529
NIGERIA 972 1,088 1,124 1,248 1,158
IRAQ 589 505 567 572 545
ANGOLA 521 536 526 675 476
ALGERIA 462 813 648 500 485
VIRGIN ISLANDS 327 335 325 303 327
UNITED KINGDOM 275 205 276 504 410
KUWAIT 259 239 185 289 239
ECUADOR 248 322 281 264 277
RUSSIA 223 381 370 217 423
BRAZIL 182 221 195 151 148
NORWAY 165 181 196 232

http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_l...

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brianf on January 20, 2007 - 12:36am Permalink | Subthread | Parent | Comments top

¿Son los seres humanos más elegantes que la levadura?

It's not that I speak Spanish really well, but using those web based translators doesn't always work. It translated smarter as smartly dressed. So it comes off like, "Are humans more elegant than yeast?" That's also a good question. But for the next post on a Spanish web site try, "¿Son los seres humanos más inteligentes que la levadura?"

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totoneila on January 20, 2007 - 1:04am Permalink | Subthread | Parent | Comments top

Hello Brianf,

Thxs for the correction! I just quickly plugged my tagline into Babelfish-- it didn't seem quite right to me either, but I had to leave.

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DelusionaL on January 20, 2007 - 9:32am Permalink | Subthread | Parent | Comments top

"3.3 million barrels a day. We can expect production to fall to 2.5 million barrels a day."

Thats a 24% decline!

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