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84 comments on Oilwatch Monthly - December 2007
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84 comments on Oilwatch Monthly - December 2007
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Rembrandt - this is truly amazing work. I'm glad your old second hand lap top is still struggling on and wonder what all these free loading multi-billion $ corporations will do when it eventually croaks?
My feeling is that we are still on an undulating slowly rising plateau. Stuart's moving averages were trending down, and I suspect that they will now start to trend up. I think we'll see this ragged plateau rising to about 90 mmbpd by 15 nov 2011. At that point every sinew of the oil industry will be strained and tired and the system will break and begin its relentless decline.
A few notable points;
UAE - I've heard rumors they have production shut down for offshore maintenance. Can anyone elaborate? Most of UAE production is onshore. Amongst all ME OPEC states I think UAE likely has the most suspect reserves - and so wonder to what extent they've pushed some reservoirs over the brink?
Kuwait - seems to have had another rush of blood to the head.
Saudi - is ticking up again - I wonder if they are now marketing more sour heavy crude - with ongoing upgrading of global refining capacity?
LNG and NGL - there seem to be a number of countries ticking up with NGL's
Azerbaijan - wtf is going on there?
UK and Norway - both up, coming out of summer maintenance.
I'd tend to see this as multiple cycles in different parts of the industry that have just come into phase to produce this spikelet. If demand falters and prices weaken then you'll see KSA and Kuwait cutting back post haste.
As for 2008. My feeling there, is that we most likely have delayed projects always rolling up into the front year. And so anticipate about 5 mmbpd new capacity in 2008 - enough for average production to rise to about 86 mmbpd. And a year from now we'll be looking at 8 mmbpd new capacity in 09. I think I may spend some time scrutinising the 08 mega projects.
ACE work
Euan,
Re UAE shutting down production for maintenance. See:
UAE forced to slash oil output by a quarter (Arabian Business, Sun 23 Sep)
http://www.arabianbusiness.com/index.php?option=com_content&view=article...
Article: Scheduled maintenance at three of the UAE's largest oilfields will cut oil output by 600,000 barrels per day (bpd) in November, the Abu Dhabi National Oil Company (Adnoc) said in a statement on Sunday.
Adnoc's statement confirmed work widely expected by the industry and reported by Reuters in August. At its peak, the maintenance would cut 810,000 bpd of output from the world's sixth-largest oil exporter, oil traders said last month.
The output reduction as detailed by Adnoc was about a quarter of the UAE's output. The Opec member produced about 2.56 million bpd in August, according to a Reuters survey.
Adnoc will also do work at the 415,000 bpd Ruwais refinery from December 22 to February 25, cutting crude processing by a total of 5 million barrels during the maintenance period, Adnoc said.
... ADNOC gave no details on the length of the oilfield maintenance. Industry sources said last month the work would last for two to three weeks and start in late October.
The state oil firm also gave no details on the units to undergo work at Ruwais, the UAE's largest refinery. An industry source in August said Adnoc's refining arm Takreer would undertake work on a crude distillation unit and a diesel-making hydrocracking unit, shutting in around 150,000 bpd.
Thanks Doug. It strikes me as being a bit odd. In the North Sea, production drops every year for maintenance. There is nothing like this before in the 2002 - 2007 record of UAE. I would have thought a rolling maintenance program would be more likely. Using the same crew, moving from one field to the next, all the while trying to maximise production. This is one to watch.
It's a pure WAG, but I wonder if they are having problems with saltwater/bacterial corrosion (as at Prudhoe Bay) and/or they are having to dramatically increase their ability to handle (and reinject) produced saltwater.
Same idea I had water handling would be a reason to have to shutdown most of the production. I'd guess it has to be something critical thats being upgraded.
My feeling is water handling facilities too. If this is off shore then it is basically water clean up and tip it over the side - but if they're producing more water - then they also need to inject more - and that's major engineering in the offshore environment.
I second this sentiment, and add: any hedge fund out there that has profited from analysis from this site, please send Rembrandt a new laptop. Email editors box for address. No other renumeration required...;)
For real!
"Why is it that the greatest danger to mankind is only addressed by people who are doing it on their spare time, and can’t get any funding for it from the government, industry, investors, or anybody else? They have to do it on their own time and with their own money!" -- Charlie Hall, ASPO Houston 10/17/07
I have long contended that this situation is a travesty, and that the investing community should step up and fund the work of ASPO and TOD and other deserving analysts. It's enlightened self-interest, if nothing more. Any interested parties please write me privately. I have ideas about how to do it...
Beautiful, and highly useful work, Rembrandt. Thank you! I will stash these charts away for future reference.
--Chris Nelder
Energy Analyst, journalist getreallist.com
Given that the Kuwaitis are supposed to be producing at a "sustainable" level these days -- i.e. that they have been apparently limiting their production voluntarily to conserve for the future -- the sudden up-tick in recent months is quite striking.
I suspect they got their arms twisted at OPEC, to produce a temporary surge.
I suspect that the OPEC "surge" strategy was calculated to prevent the world economy from stalling on high oil prices, given that they expect an increase in production from new projects in 2008. It looks to me that it was a smart move, in terms of their own medium-term interests.
What about the Mexican production? The graph that is displayed differs from the one shown in the pdf-file.
Additionally I wonder: total liquids and crude oil are equal or at least almost 100% correlated. Just one drop in total liquids is not mirrored in the crude oil production. Can anyone explain this to me?
The graph displayed shows the EIA STEO figures, the one in the pdf the EIA IPM figures.
Sorry for any confusion, I was playing around with these two datasets a bit.
EIA crude oil production still shows a slightly declining trend. Around 500 kb/d of the September increase came from the North Sea and Mexico, both areas we know are in terminal decline. This will not last long.
Yes, we'll have to work out what the statistical definition is of a spike compared to a peak.