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53 comments on Oilwatch Monthly - June 2007
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53 comments on Oilwatch Monthly - June 2007
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Excellent work. BTW, do you know if the Total Liquids Export graph is Net Exports?
The following is based on EIA data:
The top four net oil exporters--Saudi Arabia; Russia; Norway and Iran--accounted for about 43% of Total Liquids Exports in 2006, based on the above graph. From 2005 to 2006, their combined production dropped by 1.8%. Their combined consumption increased by 4.3%. Their combined net exports declined by 3.9%.
Based on their HL plots, Saudi Arabia, Russia and Norway are well past their 50% of Qt marks. Iran is a somewhat more complex case, but I think that they are past the 50% mark, and their production declined from 2005 to 2006.
As we send torrents of cash flow to the exporting countries, I expect that in most cases, their domestic consumption will increase, probably at a rapid pace (at least initially), e.g., the 50% annual rate of increase in foreign car sales in Russia.
My analysis now is basically the same analysis that I had in January, 2006, to-wit, the combination of an advanced state of depletion in the top oil exporting countries and increasing domestic consumption in the exporting countries represents a lethal threat to the world industrial economy.
IMO, the very lifeblood of the world industrial economy is draining away in front of our very eyes.
Links to my 2006 articles follow. Note that PG edited my final statement in the January, 2006 article. I said that there "would be" a net export crisis. In the following, I also made one minor correction to the grammar.
http://www.energybulletin.net/19420.html
Published on 21 Aug 2006 by GraphOilogy / Energy Bulletin. Archived on 21 Aug 2006.
Net Oil Exports Revisited
by Jeffrey J. Brown
BP is saying net crude exports rose 2.5% in 2006 and net products rose 14%.
Perhaps someone can figure out the apparent discrepancies between the various data sets.
In any case, if we look at recent monthly data, there is no doubt that net exports are down. On a month to month basis, Saudi Arabia for example is down much more sharply than the average annual number shows, and Mexico is down 18% from 1/06. The EIA shows flat annual net exports for Mexico from 2005 to 2006. The common thread here is the near certain decline/crash of the two largest producing fields in the world, resulting in the near certain decline of every oil field in the world that has produced one mbpd or more (crude + condensate).
BTW, Mexico is declining as Khebab predicted, using the HL method. And it seems that someone did warn about a Saudi decline in the vicinity of 2006.
The only discrepancy is that BP is a complete global data set for 2006. The only one. EIA hasn't released their yearly update yet and it will only be for 2005 when they do.
See Rembrandt's note down the thread.
Lethal threat?
what do you mean... big recession?
Boris
London
You can pray that it's only a big recession. If that is all we get, then we get off easy but I'm not counting on it.
Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett
@Westtexas
"BTW, do you know if the Total Liquids Export graph is Net Exports?
The method used is to subtract consumption of all liquids (except biofuels since no data on that is available) from all liquids production to obtain "exports". It does not provide figures for actual flows, these will be incorporated in the next months were available (only for OECD countries). I did not yet do this because it is very time consuming.
Incorporating actual flows will change the picture somewhat but probably not the overall conclusions. Producers who do not have refineries themselves will be worse off because they will have to compete on the global market when prices rise higher. Actual exports are therefore likely somewhat higher than portrayed in this picture.
Your point about the increasing consumption because of the higher prices of oil is an interesting subject to research in more detail.
@Echelon
BP is saying net crude exports rose 2.5% in 2006 and net products rose 14%.
I saw this too, BP tracks actual flows of liquids which gives a different picture because various producers do not refine their own crude. My method assumes that they all do currently. This would mean that oil exports are divided more equally over the globe. To know the exact differences, I need to do more analysis and see were the errors lie, and what they mean. Will come back to that next month when actual flows have been taken into account.
Unfortunately trade flows between the 2006 and 2007 BP report cannot be compared, because they increased the trade figures for 2005 with more than 1 million b/d! This makes their numbers somewhat doubtful regarding their accuracy.
If we look at the 2007 report we see that BP gives an increase in production in liquids of 413,000 b/d and that the increase in exports of liquids is 1,379,000 b/d. I currently do not have an explanation of why this discrepancy occurs.
Thank you for your analysis regarding BP's reports. Very interesting. Do you or anyone else have The IEA's OMR numbers for Saudi+neutral zone for May released today? The EIA is again reporting 8.6mbpd - exactly equal to their quota minus targeted cuts for November and February. I'm assuming the IEA is inline with this.
I don't have access to the IEA's report directly unfortunately. Would cost too much bucks for a report that is released for free two weeks later anyway.
What I do know is that the IEA forecasted a production decline of 110.000 b/d for OPEC from april to may, which is less than the EIA's expectation.
Therefore i think it si likely that Saudi Arabia's production didn't change or even slightly increased in the IEA's data.
It would be interesting to compare compare BP's numbers for net exports for each of the top 15 net exporters to the EIA's numbers for the top 15--an apples to apples comparison.
In regard to month to month versus average annual numbers, as noted above, the EIA shows Mexican Total Liquids exports to be flat from 2005 to 2006 (average annual), but Pemex itself shows that their exports are down by 18% from 1/06 to 4/07. The EIA shows Saudi Arabia to be down by about 4% from 2005 to 2006 (average annual), but their net exports are probably now down by at least 13% from their 2005 high (monthly basis).
As noted above, the central driving factor here for Saudi Arabia and Mexico is the near certain simultaneous decline/crash of the two largest producing fields in the world. As I have frequently stated, the primary difference, IMO, between Saudi Aramco and Pemex is that Pemex has admitted to the decline/crash of its largest field, while Saudi Aramco has not.
So, let's assume we have two countries--Production Land (producing 2 mbpd of crude oil), but it has no refineries and Refinery Land (with no crude oil production but they have the refineries).
Let's ignore refinery gains and crude/product transportation costs. Each country consumes one mbpd of product.
So Production Land exports 2 mbpd to Refinery Land, and Refinery Land exports one mbpd of product back to Production Land. So, the net exports are two mbpd less one mbpd = one mbpd.
Makes sense to me.
The paper that Khebab and I are going to work on is an attempt to model future exports. My tentative plan is to focus on the top 10 (accounting for about 70% of exports, based on your 47 mbpd estimate), and use HL plots of each country to predict future production, and then plug in at least two, and maybe three assumptions about consumption. As I have noted elsewhere, I have seen HL plots on six of the top 10, and all six are in close proximity to, or past, their respective 50% of Qt marks.
IMO, in 10 years time net exports will be down to a fraction of their current level--perhaps as low as 25%.--remember that the UK went down to zero in about six years. But we will see what Khebab comes up with.
Rembrandt, you might want to crosscheck your work with german statistics on the same topic from the Mineral Öl Wirtschaftsverband.
http://www.mwv.de/cms/front_content.php?idart=2&idcat=9