OilCast.com #28: Pemex exclusive 'We are in the middle of Hubbert's curve'
Posted by Prof. Goose on December 1, 2005 - 3:58pm
Oilcast.com today breaks an exclusive interview with a senior engineer from Mexican state oil company Pemex, who says "the days of the Mexican super giants are over." He claims Pemex is in the "doorway of depletion" and "in the middle of the Hubbert curve." (You can also just read the transcript in the right sidebar if you wish.)
Link: http://oilcast.com.
“Of all races in an advanced stage of civilization, the American is the least accessible to long views… Always and everywhere in a hurry to get rich, he does not give a thought to remote consequences; he sees only present advantages… He does not remember, he does not feel, he lives in a materialist dream.”
—Moiseide Ostrogorski (1902, 302-303)
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Only the majors have the clout to admit what is happening without their share price toppling. The US independents simply want this (PO) to go away - they do not want to talk about it. I can assure you this is the case, as I broached the subject in a divisional meeting last year. I was not only upbraided and castigated at the meeting, but pulled aside later and told to "keep your doom and gloom to yourself".
Until the levee breaks with respect to oil prices, I don't believe anything will happen, regardless of how many of us cry "WOLF!" Once investors can see that oil will forever get more scarce and rapidly, and in the end will kill the world economic machine, then money will seek out gold and silver (initial panic and gold broke $500 this week anyway). Once precious metals are too high to buy, and the panic wears thin, then money will seek the AE sector.
I think this scenario likely because there are few investors or investment firms that look out farther than 12 months, and the investing populace wants their returns to be higher than is actually possible in a merely stable economy. Investors are dependent on growth or destruction of growth, leaving nothing in the middle. We have the "bulls" and we have the "bears" - what we need is some cows, willing to let things sit and grow at a reasonable rate of return.
That timing scenario means that we are all looking at some very unstable times...
It's not all the that unbelievable though. The North Sea has seen aggregate annual 8% falls over the last few years, individual fields have seen higher... Cantarell could collapse at 10%+. They say 11bn barrels from a URR of 16bn? For peak to occur after 69% extracted then the downside is going to have to be steep!
http://omrpublic.iea.org/supply/mx_to_ov.pdf
http://www.pemex.com/files/dcpe/eprohidro_ing.pdf
EIA link (includes other countries also):
http://www.eia.doe.gov/emeu/ipsr/t22.xls
This link, just put up, also discusses Mexico:
http://www.energybulletin.net/11370.html
I have made watching Mexican production a hobby the last 3 years. They are perhaps the most key, as our second largest source of imported oil and closest to severe decline. PEMEX publishes numbers for each previous month on the 17th or 18th.
This story has broken that eerie silence. "It ain't over till it's over."
Still, as of today, almost 40% of gulf oil production is still shut down, and only returning very gradually.
I meant the "doomsday" scenario never happened, not that the Gulf rigs weren't damaged severely. Here we are, under $60/barrel again, and all's right with the world. ;]
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Not so popular stories:
- Ford to fire 7000 US-more overseas (Volvo/Jaguar).
- Natural-gas futures soared 90.4 cents to settle at $13.931 per million British thermal units, after rising as high as $13.95 -- just 38.8 cents off their record settlement of $14.338 reached Oct. 25.
- Today's shut-in oil production is 539,074 BOPD. This shut-in oil production is equivalent to 35.94% of the daily oil production in the GOM, which is currently approximately 1.5 million BOPD.
Today's shut-in gas production is 2.943 BCFPD. This shut-in gas production is equivalent to 29.43% of the daily gas production in the GOM, which is currently approximately 10 BCFPD.The cumulative shut-in oil production for the period 8/26/05-12/02/05 is 96,956,676 bbls, which is equivalent to 17.709% of the yearly production of oil in the GOM (approximately 547.5 million barrels).
The cumulative shut-in gas production 8/26/05-12/02/05 is 501.222 BCF, which is equivalent to 13.732 % of the yearly production of gas in the GOM (approximately 3.65 TCF)
http://www.mms.gov/ooc/press/2005/press1202.htm
http://www.businessweek.com/ap/financialnews/D8E8B8UO0.htm?campaign_id=apn_home_down&chan=db
The tragic part of all this is that we have become such a foolish and craven people, so lost in our endless victory laps, incessant self-awards, and failures of attention, that we will deserve everything that reality throws at us. We are past the point of being unworthy of our own history, so maybe we ought to stop pretending to celebrate it.
http://www.kunstler.com/mags_diary15.html
Easy there. I sense great anger and frustration.
The sheeple do not "deserve" the harsh pains that reality (aka Mother Nature) might throw at them.
"Deserving" is a side companion of "blame" and the "I'm better than they" syndrome. None of that is going to help.
One should forgive the sheeple because, honestly, they really, really "know not what they do".
Would you blame a 5 month old baby for making a doo doo in his/her pants? Of course not. They know not what they do (do) and also, physically they probably can't help it.
It is going to take time, patience, and a great deal of educating to move society from its current state of blissful ignorance to one of knowledge and proactive prevention.
We don't give up on messy babies. We shouldn't throw in the towel on our messy civilization either.
Deep breath and start your day afresh.
Peace.
America has a problem, see from this graph what a 15% pa decline at Cantarell does to Mexican exports:
I've written about it here: Word from Mexico