The Oil Drum | DrumBeat: April 5, 2007

152 comments on DrumBeat: April 5, 2007

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Leanan on April 5, 2007 - 9:23am

Speaking of Cantarell....the WSJ has a story on it.

Mexico Tries to Save A Big, Fading Oil Field

AKAL C OIL PLATFORM, Gulf of Mexico -- In March 1971, a Mexican fisherman named Rudesindo Cantarell took a few geologists from state-run oil company Petróleos Mexicanos to this spot, where he had seen oil slicks. Mr. Cantarell didn't know it, but he had stumbled across one of the largest offshore oil fields ever found.

A few decades and 12 billion barrels of oil later, the field that bears Mr. Cantarell's name is dying, and Pemex, as the state-owned company is known, is struggling to stave off the field's demise.

Subscription required, alas, but maybe it will be available for free in the Pittsburgh Post-Gazette later today.

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PhilRelig on April 5, 2007 - 9:56am

Interesting bit of trivia that Cantarell is named after a guy - an otherwise very ordinary, very anonymous guy. I wonder if he even made a penny off of it for his luck?

How would you like to be immortalized by having a mega-oilfield named after you?

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Calorie on April 5, 2007 - 10:15am

Cantarell was the name of a fisherman who discovered the field - his nets kept getting coated with oil, he kept complaining to Pemex about it, and Pemex finally investigated and found the field.

See my post yesterday for a couple of additional graphics:

http://www.theoildrum.com/node/2434#comment-176409

This might be the best article in WSJ's Cantarell series yet. The author extends the discussion of Cantarell to the status of the worlds super giant fields, quoting Simmons at one point:

The demise of Cantarell highlights a global issue: Nearly a quarter of the world's daily oil output of 85 million barrels is pumped from the biggest 20 fields, according to estimates from Wood Mackenzie, a Scotland-based oil consulting firm. And many of those fields, discovered decades ago, could soon follow in Cantarell's footsteps.

It's widely believed that the world's biggest oil fields have already been found. In the decades leading up to the 1970s, the world discovered eight big fields that produced between 500,000 to one million barrels a day, according to Matthew Simmons, a veteran oil industry banker. During the 1970s and 1980s, only two were found. Since then, only one -- the Kashagan field in Kazakhstan -- has the potential to easily top the 500,000 barrel-a-day mark.

Two decades ago, about a dozen fields produced more than a million barrels a day. Now there are only four, one of which is Cantarell. The future of two others, discovered more than 50 years ago, remains in question. Some analysts speculate Saudi Arabia's Ghawar, the biggest field by far, could begin a gradual decline within a decade or so. Another, Kuwait's Burgan, is showing signs of maturity. In November of 2005, Kuwait Oil Co. lowered its estimate of the field's sustainable production level to 1.7 million barrels a day from 1.9 million a day.

Replacing big gushers is difficult. Industrialized countries, which tapped out their big fields years earlier, haven't been able to maintain output despite finding large numbers of smaller fields and investing heavily in technology. Alaska production, hurt by declines at the giant Prudhoe Bay field, dropped from 2 million barrels a day in 1988 to a current rate of about 900,000 a day.

"The world faces a situation where we have production from smaller and smaller fields trying to keep up with declines from the big fields like Cantarell," says Mike Rodgers, a partner at industry consulting firm PFC Energy in Houston. "You're on a treadmill trying to keep up, and you get to a point where you can't make any more forward progress."

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Calorie on April 5, 2007 - 11:52am

There are also some online-only quotes from a few oil experts. For example:

Matthew Simmons, oil industry banker and author of "Twilight in the Desert," which questions whether the Saudis have as much oil as they claim:

"Given that peak oil might be the biggest issue we face this century, it's very unfortunate that we don't have the data from the fields."

"The age-old mistake in the oil industry is being in denial when a field goes down. Usually you can't tell until after the fact. The irony of Cantarell is [that it is] the only super-giant field that we're going to watch from a front-row seat as it declines, because of the visibility of the month-by-month production data."

David Victor, director of Stanford University's Program on Energy and Sustainable Development:

"We're going to continue develop new technologies that will make most out of the big fields, and we'll move to smaller fields. Together, that will create much more supply."

"The people who worry about peak oil are worrying about the wrong problem. There isn't, in some fundamental sense, some problem under the ground about not enough oil. But there is a big problem above ground with some of the key firms that control much of the resource. Most of the fields are under control of the national oil companies, like Pemex. And those firms vary enormously in their compentence."

"The shift from Cantarell as the elephant of Mexico to perhaps a dozen projects, most of which are complex, means Pemex will have to develop capabilities it doesn't have. You can't contract that out. You as the company, as controller of the resource, still need to make decisions about how you can develop that resource."

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Ricko on April 5, 2007 - 12:02pm

There is a I guess a mistake by the writer because it says "Some analysts speculate Saudi Arabia's Ghawar, the biggest field by far, could begin a gradual decline within a decade or so."

Then the chart starting in 2007 shows a 10% decline for Ghawar to 2010. That Woods Mackenzie (a big outfit) is predicting a decline at all is the important thing to me.

The WSJ would seem to be well aware of Peak Oil even though they don't come right out and say so.
Ricko

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veganmaster on April 5, 2007 - 2:13pm

Yes, the understatement in that article was killing me. They gotta tip toe around so the cornucopians can still ignore peak energy (finite resources), while the realists can extract the implicit truth...

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Bob G on April 5, 2007 - 3:23pm

The online version of the same chart has different rounded figures: Ghawar -11%, Burgan +1.6.

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ericy on April 5, 2007 - 10:23am

Yeah, I see it. Right on the top left corner of the front page, too. Hard to miss :-).

Buried back in there they have a table of projections for '07-'10 for the big oilfields in the world. They are projecting Ghawar at -10%. Cantarell at -30%. Burgan at +1.5% (if you believe that). Rest of world at +10%.

In the table they don't total it all up, but it was easy enough for me to do it. Their total for 2007 is 87.3 million barrels. For 2010, they are projecting 94.8 million barrels. Don't complain to me about it - all I did was add up their numbers :-).

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Darwinian on April 5, 2007 - 10:28am

Notice in the chart above that the decline is following the "worst-case" scenario. It is wishful thinking to believe that 50% of the oil can be recovered, from this field anyway.

Ron Patterson

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brutus on April 5, 2007 - 10:39am

It's really a fascinating article for the WSJ, because the whole thing is talking about peak, without really concisely putting all the pieces together, be too much of shock for the financial community.

For example they lay out all the issues and use Canterall as specific example but when they get to Burgan they say, "Another, Kuwait's Burgan, is showing signs of maturity. In November of 2005, Kuwait Oil Co. lowered its estimate of the field's sustainable production level to 1.7 million barrels a day from 1.9 million a day."

Hah, it's mature!

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ericy on April 5, 2007 - 11:28am

Heh. That's why I spent the time adding up projected production for 2010 from the table. I wanted to see if they were projecting a worldwide decline or not.

They project an extra 7.4 million barrels/day from the rest of the world by 2010...

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cynus on April 5, 2007 - 12:34pm

In the article they mention that "the oil industry was stunned" by the decline in Cantarell and Mexico. Do you know who wasn't shocked? All of us PO-ers who knew that Mexico was peaking right on schedule. The oil industry was similarly shocked by the North Sea peaking, but the peakists knew it was happening right as predicted.

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Leanan on April 5, 2007 - 12:40pm

Yeah. That's what really gets me. How many times does that have to happen before they get a clue?

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veganmaster on April 5, 2007 - 2:43pm

Never underestimate the talking primate's ability to believe sans evidence! :) Hoping for a better tomorrow usually means ignoring the realistic predictions of today.

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westexas on April 5, 2007 - 4:56pm

The same major oil company guys are now telling us Peak Oil is decades away, worst case.

I'm checking out Portland, Oregon today.

See ya later.

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Aniya on April 6, 2007 - 2:34am

Hi WT/J,

I'd be interested in your report, if you'd like to share.

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Planner on April 5, 2007 - 1:41pm

What struck me from the article was:

From January 2006 through February 2007, Cantarell lost a staggering one-fifth of its production.

and

Cantarell, which currently produces one of every 50 barrels of oil on the world market, is fading so fast analysts believe Mexico may become an oil importer in eight years.

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cheapseats on April 5, 2007 - 5:32pm

Following the "worst case" from the chart above, which appears to also be the most likely case, production goes from 1.6 in Jan '07, to .8 in Jan '08.

DOWN BY HALF IN ONE YEAR

Did I see that right?

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ET on April 5, 2007 - 6:35pm

Obviously the oil industry should start hiring poor fishermen to cast their nets in all the obscure parts of the ocean. Yeah, that's the ticket. Maybe they'll discover more oil that way;^>

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Leanan on April 5, 2007 - 7:20pm

PeakOil.nl has put up the chart from this story.

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DIYer on April 5, 2007 - 9:24pm

Thanks for posting the Rigzone [partial?] reprint of that article up top, Leanan. I had no idea how Cantarell was named. Interesting story, well told.

| _{The problem will solve itself.}| _{But not in a nice way.}

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152 comments on DrumBeat: April 5, 2007

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