The Oil Drum

If I recollect correctly from reading the CIBC report yesterday, their analysis resulted in an overall average decline rate of 3.4%. If planned new production comes online as projected and demand increases as predicted (in the CIBC report) that would give about 2mbpd spare by the end of 2007. A decline rate of 5% would evaporate that, higher implies very imminent peak oil. Even given the 3.4% decline rate they envisage supply and demand coinciding by end 2008.

Since a large proportion of current production is using enhanced recovery techniques and what data we have on decline rates for more mature such fields is generally coming in at the upper end of the 5% to 10% range (in some cases even higher), my guess is we may be facing supply shortfall sooner than most people expect. However, I also suspect that geopolitical events could bring that yet closer.

Thanks.

Is it possible to break out some of the big fields into subsets to get some sort of average based on the various subsets?

Reading between the lines on this subject I suspect that as the newer fields have formations that make oil harder to extract, more expensive to develop and drill due to depth etc. These use water flood etc from the start, so declines will be higher. Is this correct?

So consequently the decline rate may increase longer term, as the average will include more fields with bigger declines. Average may go up, as Cantarell is a big field with big declines. Is this valid?

I suspect this is why Schlumberger is saying 8%. They see more, younger fields with higher decline rates as compared to the older slower decliners. It also backs up what Simmons says as well as technology is pushing up the decline rates.

Are the formations more complicated to extract from then say 50 years ago?

I suspect this may be part of the answer as well.