The Oil Drum

156 comments on DrumBeat: March 21, 2007

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ZPDM123 on March 21, 2007 - 5:44pm

Jeez Euan, this is just dandy! Not to show my frustration. Your attempt to analyze SA spare capacity by getting a handle on well productivity was creative. This latest data though takes the contention from your article and stands it 180 degrees on its head. As a bonus, we find that with all the horizontal wells the peak will not likely be a gentle, pretty downslope, but much closer to cliff. Thanks for putting my mind at ease about PO ;)

Here's something else to smile about if it hasn't been caught earlier:

A decline in imports of natural gas from Canada may lead to higher U.S. prices this summer, said Peter Linder, an energy analyst with DeltaOne Capital Partners in Calgary.

``We're going to have the biggest decline in western Canadian production in the history of the industry,'' Linder said. ``There's going to be 400 to 600 million cubic feet a day less production from western Canada in 2007 versus 2006.''

http://www.bloomberg.com/apps/news?pid=20602099&sid=aKfnFfrQZo8M&refer=e...

best wishes all.

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Euan Mearns on March 21, 2007 - 7:59pm

ZDPM123

This latest data though takes the contention from your article and stands it 180 degrees on its head.

You might be surprised to know that I don't fully agree with you here. The watering out of a handful of wells near term will have negligible effect on Saudi production. Many of the horizontals drilled in the last 15 years will already have watered out - so that kind of activity is already in the data. Looking to the future, all these wells are spread among more than 10 producing fields of varying maturity - so there will be no cliff edge.

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Hindmost on March 21, 2007 - 8:46pm

A very good perspective to keep for decline rates (from a pro-peak analyst):

Offshore oil peaks are easier to define because of the rapid and consistent way full field developments proceed. Studies show that output from offshore wells declines by an average of 15% per year. Individual fields decline less rapidly, at around 10% per year, because the best wells are worked-over and enhanced recovery projects briefly stem decline. By the same token, unless containing very few fields, sedimentary basins decline by around 5% per year as new, progressively smaller, fields are added.
Countries, regions and fields may decline by less still if they contain many basins and reservoirs. Decline rates are averages and can be affected by the discovery and development of new provinces, plays or reservoirs and by technological breakthroughs that lead to a one-off jump in output. They are also affected by commercial and political circumstances, such as output restriction by OPEC. Figure 2 is the model profile that sedimentary basins will adopt if unmodified by these effects.

(from pg 2 of 3 http://www.energyfiles.com/articlesfiles/Resource%20Depletion%20(Oct%202006).pdf

This is observed in the "slow" decline rate for the lower 48, e.g. I would expect Saudi Arabia's _net_ decline rate to be pretty slow, at the start...

CW
Global peak: 2007 - 2010
Global decline rate, Post peak: 2%
Economic response: Severe global recession, ~5 years, then slow recovery