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192 comments on DrumBeat: November 26, 2008

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Darwinian on November 26, 2008 - 10:19am Permalink | Subthread | Comments top

Russia's decline may be steeper than many people expect.

In an interesting article is the Wall Street Journal this morning, Russia May Cut Oil Output in Tandem With OPEC. Note: A click on this link brings up only the first few sentences of the article, but a http://news.google.com/ search on the title brings up the entire article.

But with Russia's oil output down 0.5% in the first 10 months of the year to 9.8 million barrels a day, and with further declines likely, such steps mightn't be necessary.

"The fact that Russia's oil production is already in a decline comes in very handy for the government," said Chris Weafer, chief strategist at investment bank UralSib, which sees Russian output falling 2% to 5%, or as much as 400,000 barrels a day, next year.

Lots of investment will be necessary just to keep Russian oil production between flat and a slight decline. With oil prices low and the Russian tax situation severely limiting company profits not much new investment is likely to happen.

Ron Patterson

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westexas on November 26, 2008 - 11:01am Permalink | Subthread | Parent | Comments top

Our model (principally Khebab's hard work) show that the HL based initial 10 year production decline for Russia is -5%/year plus or minus 2% (from mature basins):

http://www.theoildrum.com/files/image013.png

http://graphoilogy.blogspot.com/2008/01/quantitative-assessment-of-futur...

And our middle case shows Russian net oil exports approaching zero in about 18 years.

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PaulusP on November 26, 2008 - 11:12am Permalink | Subthread | Parent | Comments top

Ron,

How about this: "Russian oil companies may cut production and exports should they become unprofitable, Energy Minister Sergei Shmatko said on Tuesday. (11/18, #13)"

http://www.energybulletin.net/node/47309

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ace on November 26, 2008 - 4:08pm Permalink | Subthread | Parent | Comments top

Thanks for that link, Ron!

The forecast below is bottom up project based until 2012, followed by a steady decline rate of about 4%/year which between your link's 2% to 5%.

The decline in Russian output is a key factor in forecasting that world peak oil is probably 2008, excluding biofuels.

The forecast shows a steady decline because many of Russia's new oil projects have long ramp up periods.

Russia Crude Oil and Lease Condensate Production to 2020 - click to enlarge

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totoneila on November 26, 2008 - 6:00pm Permalink | Subthread | Parent | Comments top

Hello Ace, WT, Darwinian, Khebab,

As usual, thxs for the heavy lifting on the statistics, graphs, and analysis. As Russia goes postPeak in FFs, I think we also need to remember how important they are as a global exporter of I-NPK. The US, now a net importer of I-NPK relies on Russia for 12% [mostly N ammonia & urea].

From the POT website, a cool clickable graphic of each country's I-NPK and agro-statistics:

http://www.potashcorp.com/investor_relations/markets_information/world_m...
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webpage to launch World Agriculture & Fertilizer Market Map
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Russia net exports N = 4.65, P = 2.28, K = 5.72 [each millions of tons source: FAO,IFA, 2005 data]. I also believe they are a net exporter of recovered sulfur from sour crude & sour natgas, too.

Let's hope that Russia doesn't financially and socially implode so that these vital exports are curtailed. As you well know: we are evolved to sit in the dark, but we cannot do starvation. Have you hugged your bag of NPK today?

How long before postPeak women will go crazy for the guy with the biggest O-NPK compost pit and veggie plot?

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192 comments on DrumBeat: November 26, 2008

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