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95 comments on This Week in Petroleum 11-7-07

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shargash on November 7, 2007 - 11:46am Permalink | Subthread | Parent | Comments top

Next week's report is going to be very interesting. Not only will the full impact of Mexico be felt, but there was a story a couple weeks ago that the ship watchers were saying OPEC deliveries for 11/1 - 11/15 were running behind October's levels.

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PartyGuy on November 7, 2007 - 1:50pm Permalink | Subthread | Parent | Comments top

And do you know WHY this is the case? Most OPEC countries increased their production in October AHEAD of the scheduled start to do so on November 1st. Remember, the total increase was ONLY supposed to be 500,000. Then we add in that PESKY maintenance from UAE which took 600,000 BPD off the market for 4-6 weeks, and suddenly your production is actually down 100,000 bpd.

Naturally your shipments will be lower. Naturally WT touts this to his hearts content :P

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oilmanbob on November 7, 2007 - 2:42pm Permalink | Subthread | Parent | Comments top

PartyGuy,
I feel your pain. It must really be distressing you that westexas is right most of the time and that people respect his opinion for both his good manners and clear exposition of his ideas, but its value as being predictve about the amounts of oil available in the future in the US market place from imports. (sarcanol alert) Bob Ebersole

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PartyGuy on November 7, 2007 - 5:46pm Permalink | Subthread | Parent | Comments top

I never said WT was wrong. Have I commented that he repeats himself endlessly with the same cut/pastes post, of course. My main grip is that he likes to ignore the 'dog legs up' and cherry pick his data, and I am not the only one who has told him this in public or privately.

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westexas on November 7, 2007 - 6:46pm Permalink | Subthread | Parent | Comments top

I never said WT was wrong.

Then what are we discussing?

And what part of the post-1990 Saudi production data did Khebab ignore in the following article?

Texas and the Lower 48 as a Model for Saudi Arabia and the World (May, 2006)
http://www.energybulletin.net/16459.html

BTW, anyone else find it ironic that I seem to be constantly replying to allegations that we "ignored and cherry-picked" data, and then I am accused of being repetitive when I defend our work?

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team10tim on November 8, 2007 - 1:39am Permalink | Subthread | Parent | Comments top

Westexas,

ELM is your theory so it falls to you to defend it. It is scary and depressing. People are going to complain that your data is bad, that your conclusions go too far or don't go too far enough. And, years from now when you are proven correct to a greater or lesser degree nobody is going to be happy about it.

Sorry man, it is a rough job you have.

Tim Morrison

When this whole global energy problem winds down and people are back to worrying about sports I'll buy you a beer.

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westexas on November 8, 2007 - 7:09am Permalink | Subthread | Parent | Comments top

I talked to Matt Simmons at ASPO-USA and told him that I started looking at net export capacity because of some of his prior work. Matt said that he took no comfort from apparently being right about so many aspects of Peak Oil/Peak Exports. I feel the same way.

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PartyGuy on November 8, 2007 - 4:03pm Permalink | Subthread | Parent | Comments top

The 'cherry picked' data is the fact that you are relying on the HL for KSA without taking into consideration how unstable it is. The URR has increased by 25% in the last half a decade alone. Therefore it is impossible to assign a realistic depletion rate to KSA at the present time. Stating that they are 58.1% depleted as of 2005, when they could just as easily be 40% depleted is highly misleading.

And I am not attacking your ELM. Any rational person understands it, though you must also take into account the oil exporting countries controlling their demand to make a completely accurate prediction. The recent events in Iran in which they increased the cost of their oil should be a red flag for you, but its not.

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memmel on November 7, 2007 - 7:03pm Permalink | Subthread | Parent | Comments top

Your picking on the wrong guy I think. WT made some valid observations that the doglegs may just represent increased drilling activity and thus URR estimates that include them may be inflated. The technology and drilling program used for a field and especially changes in the program will result in new URR estimates how much of that is real and how much of it is just faster extraction is open for debate. I'm the dogleg guy.

And I think that its valid to question HL results. But so far they have both been fairly accurate and lower than all other methods. And if HL is wrong its wrong on the high side and given that the HL predictions are already fairly sobering I don't think thats a huge issue.

Time will tell but its reasonable to consider that global oil production will not be symmetric i.e past performance does not insure future results. I myself find the doglegs very worrying since they imply a significant overestimation of remaining URR using HL maybe up to 50% in some cases.

For example I'm pretty convinced that KSA remaining reserves are between 40-60GB only by aggressively adopting the latest technologies have they managed to maintain production. This does not bode well for the future.

But WT is not the person presenting this argument his insight about the possible implications of the dogleg provided the basis for the argument that HL URR's may be inflated.

But as far as I know I'm the only one thats saying that we have used technology to dramatically increase extraction rates over the last 20 years leading to high HL estimates so I expect decline rates to be fairly steep soon.

So bash the right guy but the implications of the doglegs scares the piss out of me.

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jkissing on November 7, 2007 - 3:07pm Permalink | Subthread | Parent | Comments top

You bring up a good point. SA boosted prod with their new project as expected and starting in oct, so with 21 day lag we probably are now seeing this arrive in port. UAE supposedly began cutting nov 1, not confirmed that this has begun. If so, we will see lack of shipments in last week of nov. So, current boost is now depressing price, dec cut has not yet boosted it. Stocks at end of year probably not good and declining, just as xmas and winter arrives.

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