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106 comments on Wikipedia Megaproject Update (August 2008)

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ace on August 22, 2008 - 1:33am Permalink | Subthread | Parent | Comments top

I am surprised that so much heavy oil is offshore as that seems like a production headache.

Brazil is a good example of an offshore heavy oil production headache.

The chart below shows Petrobras crude/NGL production forecast in Brazil. Almost all of Brazil's production is related to Petrobras projects. It's doubtful that Petrobras will be able to meet their 2008 crude/NGL production target of 1.95 mbd since the YTD average to July 2008 is only 1.84 mbd. Oil analysts Broad and Kovarsky agree.
http://www.bloomberg.com/apps/news?pid=20601087&sid=anXwzNM8si2c&refer=home
http://www.bloomberg.com/apps/news?pid=20601072&sid=arYVWwf8e8sg&refer=e...

I think that Brazil's crude/NGL annual production rate will never exceed 2.3 mbd.

click to enlarge
source http://www2.petrobras.com.br/ri/pdf/Diretor-Almir-IBEF-final.pdf

The chart below shows Brazil's megaprojects by year. Despite capacity additions of 340 kbd in 2006 and 640 kbd in 2007, Brazil's production looks more like a plateau since 2006 rather than a good increase. Maybe Brazil's underlying production decline rate is over 10%/year.

For reference the EIA Brazil crude/condensate production data is shown. It is less than Petrobras because NGLs are excluded in the EIA data.

click to enlarge
source
http://www2.petrobras.com.br/portal/frame_ri.asp?pagina=/ri/ing/Destaque...
http://www.eia.doe.gov/ipm/supply.html

In his January 2008 newsletter, Colin Campbell forecasts Brazil's crude production, split between regular and deepwater. His forecast shows that Brazil is on a plateau, including Tupi. A quote from his newsletter:

Operations test management and technical skills to the maximum. There has already been one serious accident with the loss of a mammoth floating production system. The lenticular nature of reservoirs that diminish waterdrive, and the fact that the partly degraded oil congeals in the freezing ocean depths, add to the difficulties. Additional difficulties are posed in connection with penetrating the thick salt sequence overlying the recent find, whose development will certainly be expensive, with individual wells estimated to cost at least $30 million and perhaps much more. In general, field production profiles are likely to be characterised by a lengthy low plateau rather than a peak, with fields being brought on stream sequentially to meet Brasil’s domestic needs and optimise the investment in the floating equipment. But the staggered nature of development does give a roughly bell-shaped depletion profile.

This is an interesting presentation by Petrobras on Tupi.
http://www2.petrobras.com.br/ri/ing/DestaquesOperacionais/ExploracaoProd...

Petrobras Brazil onshore crude oil production appears to have peaked in 2003 at 221 kbd and NGL appears to have peaked at 87 kbd in 2006.
http://www2.petrobras.com.br/portal/frame_ri.asp?pagina=/ri/ing/Destaque...

source Jan 2008 newsletter
http://www.aspo-ireland.org/index.cfm/page/newsletter

Offshore heavy oil production is difficult. What is also disappointing is that Brazil's additional capacity of 1000 kbd from 2006/2007 has not signficantly increased Brazil's production yet. Brazil's 1000 kbd additional capacity is about 12% of the world Megaprojects capacity additions for 2006/2007 and it's not becoming increased production.

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majorian on August 22, 2008 - 2:33am Permalink | Subthread | Parent | Comments top

As I see it Angola/Gabon are similar offshore heavy oil provinces to Brazil(which would please only Alfred Wegener, I think).
Rigzone has estimates of world heavy oil reserves totaling 429 Gb.
(yet I read online somebody else said that the Persian Gulf had several hundred Gb of heavy oil.)
60% of heavy oil is in South America
and 80% of bitumen in North America.

http://www.rigzone.com/magazine/heavyoil/

As I remember ASPO suspects that the nature of the bitumen resource will extract much slower than conventional regardless of investment and
as you mention heavy oil( and not just extra-heavy) may be extracted much slower than conventional as well. Then you have problems with heavy sour refining capacity, yet megaprojects curves all look only slightly more inclined over time.

Your graph shows that the world didn't peak in 2006--because of tar sands AND heavy oil?

Cantarell is an offshore heavy oil field. Is it depleting 'normally'?

I'm sure you've heard the claim that there is enough heavy oil to delay peak oil for many years.

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ace on August 22, 2008 - 3:23am Permalink | Subthread | Parent | Comments top

If only conventional crude/condensate (C&C) production is considered then the peak year may have been 2005. Including tar sands and heavy oil could cause the peak C&C year to be 2008. However, the specific year of peak is not as important as the strong likelihood that the peak 74 mbd C&C production plateau will end in 2008. World C&C production is forecast to drop to 72.9 mbd in 2009.

There was a good discussion of Cantarell on yesterday's Drumbeat
http://www.theoildrum.com/node/4438/397039

and some background here
http://en.wikipedia.org/wiki/Cantarell_Field

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ROCKMAN on August 22, 2008 - 9:08am Permalink | Subthread | Parent | Comments top

A nod and a wink to you Alfie reference majorian. We geologists do appreciate any attention.

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majorian on August 22, 2008 - 11:45am Permalink | Subthread | Parent | Comments top

Hehe...(Wegener)... is that why East Greenland has 31.4 Gb boe without drilling a single well?(Greenland mirrors Norway)

http://pubs.usgs.gov/fs/2007/3077/pdf/FS07-3077_508.pdf

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Matt on August 25, 2008 - 10:12am Permalink | Subthread | Parent | Comments top

What is also disappointing is that Brazil's additional capacity of 1000 kbd from 2006/2007 has not signficantly increased Brazil's production yet.

And this is exactly the reason why the above methodology:
(a) assume an average decline rate for the existing oil supply system
(b) add Mega-projects

fails. You have to do it country by country. Moreover, if there are now so many smaller projects in the hundreds, many will be in-fills, enhanced oil recovery etc. at field level, so you got to take the field decline rate which was 7% pa in 2005, increasing to 10% pa in 2015. Read here:

IEA workshop July 2004 in Rio entitled "Is the world facing a 3rd oil shock?"
http://195.200.115.136/textbase/speech/2004/kr_rio.pdf

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106 comments on Wikipedia Megaproject Update (August 2008)

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