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60 comments on Where Supply Increases Come From

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BaSE on October 4, 2005 - 3:07am

Since Saudi Arabia is the place where the US and IEA wish to see 25Mbd and if as has been suggested, decline rates could approach 15% on their production of sweet light crude, we could see numbers like -700KB in a small number of years. Additionally while Russian numbers look good on the greaph above, their expected production increases are 3% this year and 2% next year or 300KB and 200KB. Additionally Norway and the UK have seen much greater declines at about 15% last year than they did in 2001 when it was 6-7%. I think we are very much closer to peak than this graph implies. In fact if SA is in decline, then I would agree that the world is in decline.

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mw on October 4, 2005 - 5:47pm

Speaking of Russia, this article on TASS sounds positively giddy:

In our latest report we have modeled three oil price scenarios for Russia for 2006-2015: (1) A base case of an average long-term Urals Med oil price of $32/bbl (from 2007); (2) A $50/bbl average oil price in 2006-2015; and (3) A $10/bbl annual increase in the oil price until it reaches $100/bbl in 2010, remaining there through 2015. The results in the latter two cases were striking.
Under our $50/bbl scenario: President Vladimir Putin's goal of doubling GDP by 2012 would not be met - it would only come in 2013, which is still a remarkable achievement given the derision with which the original target was greeted. Meanwhile, Russia's average monthly income would rise five-fold to $1,386, providing strong support for the current consumption boom; the country's nominal dollar-based GDP would be $2.8trn, overtaking Spain's; and Russia's per capita GDP would be $20,073, approaching Portugal's $25,658.

http://www.prime-tass.com/news/show.asp?topicid=0&id=385156

Now, its written by equity analyst, not the government, but you can imagine the giddyness in Russian govt. of the prospects.

Nary a word about reserve life or depletion.

Meanwhile, Iran:

Official: Iran could run out of oil reserves in 9 decades
Madrid, Oct 4, IRNA-Iranian Oil Ministry Deputy for International Affairs Hadi Nejad-Hosseinian said that Iran could run out of oil reserves in nine decades.
Speaking at a gathering dubbed "Iran in the 21th century: Energy and Security" in Madrid on Monday, he cited latest figures which put Iran's crude oil reserves at 137 billion barrels, accounting for 11.6 percent of the world's total reserves.
He also said that Iran has about 29,000 billion cubic meters of gas which is 15.3 percent of the world's total gas reserves.
Quoting research findings, the official said that due to the fact that Iran's gas reserves were diminishing and gas and oil production in other parts of the world was uneconomical, the Middle East could emerge as the biggest supplier of the world's needed energy by 2030, supplying about 95 percent of global requirement.

http://www.payvand.com/news/05/oct/1023.html

95, eh? How nice.

But some in Iran see renewables as important:

Member of the Energy Commission at Majlis Mohsen Yahyavi told the National Energy Committee's quarterly meeting entitled "The Impact of Increase in Global Prices of Crude Oil on Country's Energy Policies" that dlrs 10 billion/year is to be invested in the oil sector in the Fourth Plan as scheduled.
Yahyavi said increase in the prices provide a good opportunity to replace crude with the new and renewable energy resources such as solar and wind energy.

http://www.payvand.com/news/05/oct/1029.html