The Oil Drum: Europe | Oilwatch Monthly

89 comments on Oilwatch Monthly - July 2008

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GauharJK on July 16, 2008 - 8:15am

Well, I imagine a deep recession in the US would cause significant economic recessions in India and China too, which are dependent of American consumption to a large extent. It could, very well, reduce demand for a while, though I agree that by 2012, the game would be over.

But it is also possible that somehow, oil extraction may increase, given the new investment in Iraq, Venezuela and Brazil lately.

Check Out http://en.wikipedia.org/wiki/Oil_megaprojects

Oil megaprojects are large oil field projects to bring a significant amount of new oil production capacity to market.

Tabulations of oil megaprojects are used in an attempt to forecast whether future global oil supply will be adequate to meet demand for oil, or whether the world is reaching Peak Oil. As such, oil megaproject analysis has been controversial. This approach to oil forecasting is also known as the "bottom-up" approach, in that it relies on building a detailed model of where and when new oil production capacity will come on line.

These people have all the raw data in the world. And what are their conclusions?

New Oil Fields - In thousand barrels per day...
2008 - 5559
2009 - 4636
2010 - 5330
2011 - 3500
2012 - 3476
2013 - 1365

2010 is the peak of new oil production, from the known new facilities coming online. Couple that with Global Economic recession, and you'll see that Oil price is coming down in the short term. We'll just have to wait and watch...

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westexas on July 16, 2008 - 8:19am

Brazil is still, although just barely, a net oil importer.

Venezuela has shown lower production and lower net oil exports, for 10 years. At their current rate of decline in net oil exports, they would approach zero in about 20 years.

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netfind on July 16, 2008 - 2:30pm

The new oil projects tables like the one above, along with lower consumer demand, look they will solve our oil shortage untill you consider decline rates. As Jim Kingsdale points out at his website:

We commonly hear that the reason oil prices have risen is rapid growth in developing countries, particularly, China and India. But the decline of mature oil fields throughout the world is a much greater source of demand for new oil supplies than the growth of end user demand. It has been estimated by CERA that declining fields lose 4.5% of total oil production per year thus requiring about 3.9 mb/d of new oil each year for the global oil supply to stay the same. The growth in end user demand, on the other hand, varies from only the estimated 800kb/d this year to about 1.5 mb/d in recent years, much less than the estimated 3.9 mb/d per year of declines.

This estimate of about 4 mb/d of new oil needed just to offset old field decline rate is from CERA, the perpetual overestimator of world oil supply, and doesn't consider that much of recent production in the old fields has been done with horizontal wells, which often result in decline rates more like 10%. So we could ease the less significant end user demand quite a bit, add around 5 mb/d of new oil each year from the new project tables, and still easily wipe out all that good with a real decline rate of about 7%!

Also consider that about half the new projects oil is oil sands, deepwater and the like with an EROI around 4. The math of energy source displacement dictates that this kind of EROI replacing our conventional crude EROI from the old fields means that about 3 barrels of new oil must be produced to replace each barrel of old field declining production to give the world the same net energy. So adding this multiplier of 3 to the new projects table leaves us in the hole by mucho barrels.

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GauharJK on July 17, 2008 - 1:49am

It has been estimated by CERA that declining fields lose 4.5% of total oil production per year thus requiring about 3.9 mb/d of new oil each year for the global oil supply to stay the same.

This estimate of about 4 mb/d of new oil needed just to offset old field decline rate is from CERA, the perpetual overestimator of world oil supply, and doesn't consider that much of recent production in the old fields has been done with horizontal wells, which often result in decline rates more like 10%. So we could ease the less significant end user demand quite a bit, add around 5 mb/d of new oil each year from the new project tables, and still easily wipe out all that good with a real decline rate of about 7%!

This is really bad. If mature oil fields are declining so fast,... Oh Hell!

I had seen a slideshow presentation on CERA website, compiled in 2005, which claimed that Peak Oil is a hoax. It is still being circulated by Peak Oil deniers. But if CERA says the decline is so high, it has to be a lot higher than that.

You know, this is really gotten out of hand, and I don't like it. But CERA guys are still so optimistic, I don't understand why... Their numbers are different than what the IEA and EIA tell us...

Look at this...

Peak Oil Theory – “World Running Out of Oil Soon” – Is Faulty; Could Distort Policy & Energy Debate

In contrast to a widely discussed theory that world oil production will soon reach a peak and go into sharp decline, a new analysis of the subject by Cambridge Energy Research Associates (CERA) finds that the remaining global oil resource base is actually 3.74 trillion barrels -- three times as large as the 1.2 trillion barrels estimated by the theory’s proponents -- and that the “peak oil” argument is based on faulty analysis which could, if accepted, distort critical policy and investment decisions and cloud the debate over the energy future.

Source: http://www.cera.com/aspx/cda/public1/news/pressReleases/pressReleaseDeta...

Also look at "No Evidence of Precipitous Fall on Horizon for World Oil Production: Global 4.5% Decline Rate Means No Near-Term Peak: CERA/IHS Study"

The missing link for understanding the future of world oil supply – a solidly based view of oil field decline rates – has now been filled by a new field-by-field analysis of production data by Cambridge Energy Research Associates (CERA) and IHS Inc. The aggregate global decline rate is 4.5 percent, rather than the eight percent cited in many studies, based upon CERA’s analysis of the production characteristics of 811 separate oil fields.

Source: http://www.cera.com/aspx/cda/public1/news/pressReleases/pressReleaseDeta...

Atleast these people agree that "aggregate global decline rate is 4.5 percent". But they are as optimistic as always...

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