Is a Wall of Oil Heading for the Market?
Posted by Prof. Goose on August 10, 2006 - 5:12pm
Topic: Supply/Production
Tags: chris skrebowski, eia, iea, megaprojects [list all tags]
[editor's note, by Super G] This is a guest post by Cry Wolf.
Those few of you who may have read some of my earlier posts will know that I like technical analysis, but prefer to look at the technical position in conjunction with what is going on in the real world. In particular, Stuart's excellent plateau posts provide a short-term view of world oil production struggling to rise above 85 million bpd.
What has concerned me was the knowledge that a number of large new oil fields are due on stream during 2006 (and beyond) and I was left wondering how many of those were already on production, and would be included in EIA, IEA data and therefore included in Stuart's charts? And how many have yet to come on stream later this year? Was it possible that a wall of new oil was heading for the market that would see production rising towards 86 or 87 million bpd?
Chris Skrebowski's megaprojects database (pdf warning) formed the basis of this research. I have basically trawled company web sites and the internet for status reports on the 29 new 50,000 bpd+ projects that were due on during 2006.
The results fall into three categories:
- Projects with recent data reporting that they are on stream
- Projects with recent data indicating that they will be on stream by the end of 2006
- Projects with no recent or confident data whose status is unknown. These are mainly ME OPEC projects.
So here's the results (the numbering system is from my spreadsheet which is available on request at the email at the bottom of this post):
Projects that are on production with indicated max flow rates
1 AOR-E delta, 110,000 bpd new production capacity came on July 067 Erha, 150,000 bpd, March 06
9 In Amenas, 50,000 bpd, May 06
13 Azeri-Chirag, 300,000 bpd, June 06
14 Albacore Leste, 180,000 bpd, June 06
16 Benguela Belize, 110,000 bpd, July 06
19 Chinguetti, 75,000 bpd, Feb 06
21 Enfield, 100,000 bpd, July 06
23 Golfinho, 100,000 bpd, June 06
26 Syncrude ph3, 100,000 bpd, May 06
29 Upper Salym, 60,000 bpd, June 06
30 Yoho, 160,000 bpd, Feb 06*
12 projects: 1,485,000 bpd new capacity already introduced
* not on the "Megaprojects" list.
Projects not on production yet but with reported probability that production will start 2006
15 Atlantis, 150,000 bpd, end 0617 Buzzard, 100,000 bpd, late 06
20 Dalia, 240,000 bpd, no recent news
22 Foster Creek, 115,000 bpd, SAGD tar sand
24 Jubarte, 60,000 bpd, 2H 06
25 Surmont, 100,000 bpd, SAGD tar sand
28 Thunderhorse, 250,000 bpd, ¾ 06
7 projects: 1,015,000 bpd new capacity going to come on
Projects with uncertain status
2 Asab upgrading, 100,000 bpd3 Bu Hasa, 180,000 bpd
4 Darquain, 105,000 bpd
5 Dolphin, 100,000 bpd
6 EA, 50,000 bpd
8 Ghawar Haradh, 300,000 bpd
10 NEB, 100,000 bpd
11 South Pars 6 & 8, 120,000 bpd
12 South Pars 9 & 10, 250,000 bpd
27 Tengiz, 150,000 bpd
10 projects: 1,455,000 bpd that may or may not be already on production
Note that Cachalote in Brazil is on the Megaprojects list but I can find no reference to it being an actual project for 2006. This is replaced by a large Nigerian Field, Yoho, that is not on the Megaprojects list but which came on in February this year.
Looking at the fields with confident reported data, 12 are on production representing 1,485,000 bpd new production capacity whilst 7 fields are still expected on stream by the end of the year representing 1,015,000 bpd new production capacity. This is split exactly 7:5 indicating that new production has come on stream proportionally throughout the year and is neither biased towards the beginning or the end. It therefore seems reasonable to assume that 2006 production from the 10 projects with no data may be distributed similarly (although some of those such as South Pars 6&8 have been delayed to next year).
The main conclusion to draw from this is that capacity erosion has been balanced by new capacity for the first 5 months reported on Stuart's most recent plateau chart. Equally, it is worth noting that 7 of the projects already on, came on stream during June and July and are not yet included in Stuart's data, these are, however, included in the current oil price. It would not surprise me if we see June and July production creeping up, to be knocked back in August by supply disruption at Prudhoe Bay.
There does not seem to be a wall of new oil heading for the market that would substantially alter the emerging production plateau. The main areas of new production are the Caspian, Angola, Brazil and the US GOM. The Tbilisi-Baku-Ceyhan pipeline opened on June 4th and since then 8 consignments of oil from the Azeri-Chirag fields have been lifted at Ceyhan (just up the Med. form Lebanon) representing an average 120,000 bpd. This is projected to build to 1 million bpd over the next three years.
Note that all production data are for maximum capacity that will not yet have been reached in most cases. Production from those fields will build in the months ahead - just as production from fields brought on last year will have been building during the first half of this year.
I have a spreadsheet summarising all this data with links to sources. If you want a copy then mail me at:
euan dot mearns at btinternet dot com
aka Cry Wolf
Was this latest "Terrorist Alert/Airline Passenger crackdown" a response to the the Prudhoe shutdown? An overt attempt at rapid demand destruction? Subject the passengers to ridiculous conditions, and people will stop flying, airlines will cut schedules, just in time for the Prudhoe "Oil Cut."
Good point. It looks much like hysteria-pumping excercise aimed exactly at demand destruction. However, Prudhoe may not be the primary reason - there must be something bigger. If this theory is right, the UK and US governments will use this "failed terrorist plot" as an excuse for some vile atrocities (a war against Duka-Dukastan?)
to me yesterday's madness in the UK reminds of George Orwell's 1984 (see last sentence of the quote):
""Winston found that the one area of his interest in which Julia could not share was the idea of organized rebellion against the Party. She was not affected by the story of Jones, Aaronson and Rutherford. She did not mind as he did about the fact that history was being falsified daily. As for Goldstein and the Brotherhood, she went to sleep when Winston tried to discuss them. It did not matter to her whether they were fighting Eurasia or Eastasia, in fact she doubted whether there was a war at all, the Party probably dropped the bombs itself to control the people.""
- "Leverage the xenophobia" as the pentagon said in its internal documents re: Zarqawi. As the dictator screamed in the movie V, "REMIND THE PEOPLE WHY THEY NEED US!!!
- Get Lamont defeats Lieberman out of the news cycle
- Get dead Lebanese children out of the news cycle
- build momentum towards UK ID cards
- Get people accustomed to martial law
..
.
Maybe oil demand destruction is a peripheral motive also
Where can I send my application for this position?
==AC
I think it it tragic to see this list degenerate into a posting place for conspiracy theory nitwits.
Given that, it doesn't seem like much of a stretch to see other factors affect the timing of press releases. And at least this is a peak oil related theory.
But I agree that it would be nice if The Oil Drum didn't go to far down this road.
Hey, Capone said "Once is happenstance, twice is coincidence, three times is enemy action", but that doesn't mean he was right. Sometimes things just happen.
"The man who never alters his opinion is like standing water, and breeds reptiles of the mind."
~William Blake
==AC
For that, you would need to educate people to actually get informed and think and not just swallow headlines whole.
--
¡Think, organize, and fight!
But if you cannot think... ¡Organize and fight!
But if you cannot organize... ¡Fight!
-- Anarchist slogan
That's mayhem, not anarchy.
Sorry. I have anarchic moments. But the default state is not one of violence.
Seriously, see if you can help convince your anarchic brethren to use the alternate algorithm below:
while (! $goodEnoughSituation)
{
if ($Brain->thinking){
return createConstructiveSolution($Brain,$Community);
} else{
start($Brain);
}
}
Here's another take on how (not) to form governments:
"Meanwhile, a constitutional crisis. Prime Minister Nuri al-Maliki had announced that he was stripping the provincial governing council of Basra of its security portfolio. Security is collapsing in the southern port city, oil exports through which account for the only income the Iraqi government has. The governing council has declared that it will not relinquish the security portfolio.
The stage is set for a contest between the central government's armed forces, including the 10th Division of the army, and the Shiite militias that support the provincial government." - Juan Cole
For those that can translate:
http://www.azzaman.com/azzaman/http/display.asp?fname=/azzaman/articles/2006/08/08-09/999.htm
voices overheard :-)
Lebanon not going to good in the Media, What can we do to saturate the news with? I want a 24/7 wall to wall MSM event. What do we have on the burner?
Well we got a group planning to blow up an airline.
We'll go with that.
A little dark humor this morning.
I watched "V is for Venditta" last night.
I would HIGHLY recommend it.
JC
No. It happened now because they intercepted a message from Pakistan basically saying "Go do it now".
I would like to know why "months" had passed before action was taken. Why was the 1% rule ignored? Why was action delayed until the 11th hour?
Feel free to elaborate. I hope the answers you find are to your liking.
I don't think that this is any different than any other type of op where you really want to get the maximun amount of intel before shutting it down. Maybe the Brits don't prescribe to Cheneyism's (hope not).
My sources have informed me that al Qaida has planned a "massive gas attack" intended to circumvent airport security.
Before taking to the skys the Jihadis gorge on refried beans at Taco Bell. They board their flights wearing wool. Once in the air, they commence with "death by flatus". Then they rub against each other and create a few static sparks. You get the picture.
Once word gets out, all passengers will have to travel nude and have a high-colonic before boarding.
http://canada.theoildrum.com/
They seem to be in need of being "spoonfed" information.
I can just see Wolf Blitzer talking about it on "The Situation Room"!
I have a plane to catch, assuming they let me on. I'm out of here and I'll see you on the 21st.
One correction. It looks like Thunder Horse will be delayed until 2007. With all of BP's problems they may not be able to get going till 08.
"BP also announced a further delay at its Thunder Horse platform in the U.S. Gulf of Mexico - one of the company's largest new projects - after workers discovered leaks.
Subject to weather, BP now hopes the platform will start up in early 2007. The company said last month it was aiming for a startup in the second half of 2006, while the platform was originally planned to come on stream in 2005."
http://money.cnn.com/2006/07/25/news/international/bc.energy.bp.results.reut/index.htm?section=money _latest
Any news on Atlantis?
---
BP's 58,700 Metric Tonne semisubmersible Atlantis platform has set sail for its permanent location in the deepwater Gulf of Mexico. Designed to process 200,000 barrels of oil and 180 million cubic feet of gas per day, Atlantis will be the deepest moored floating production facility in the world in 7,074 ft of water.
Atlantis Field
Discovered in 1998, the Atlantis Field development is designed to utilize the deepest moored semi submersible platform in the world. The water depth at the semi (PQ) location is 7,074 ft (2,156 m). It is designed to process 200,000 b/d and 180 mmcf/d. First oil is expected in 2007. Oil and gas will be transported to existing shelf and onshore interconnections via the Mardi Gras Transportation System.
BP operates the development (56% interest), with co-venturer BHP Billiton owning the balance.
Field will be developed via semi-submersible Production / Quarters facility, supported by a network of wet-tree subsea wells.
Development drilling and well completions will be conducted using a long-term development Unit (LTDU), the Global Santa Fe Development Driller 2.
Export is via separately funded and approved Mardi Gras export pipelines.
Project is in the execution phase currently, with the hull having been built in Okpo, Korea, and the topsides modules being built in Morgan City, Louisiana. The integration of the hull and topsides will occur in Ingleside, Texas.
BP in the Deepwater Gulf of Mexico
BP began deepwater Gulf of Mexico operations in the mid 1980s. BP produces in excess of 350,000 boe/d (barrels of oil equivalent per day) from nearly two dozen fields, including BP operated facilities at Na Kika, Pompano, Marlin, Horn Mountain, Mad Dog and Holstein. BP also operates a number of subsea tie-backs in the Gulf.
Execution of our exploration strategy has delivered excellent results, yielding a strong portfolio of large, high quality development projects. Focused exploration will continue across our portfolio.
BP undertook an unprecedented simultaneous development of five major projects in the Gulf of Mexico. Two have been completed. The remaining three -- Thunder Horse, Atlantis and the pipelines within the Mardi Gras Transportation System -- will be complete in 2007.
For more information please visit: http://www.bp.com/US
http://www.rigzone.com/news/article.asp?a_id=35014
So, now here we are, and at least in 2006 so far it seems like all we are getting is this lousy plateau. Not good. The fact that depletion is accelerating (see Saudi and Cantrell) right around the time when we get past where this boost was supposed to occur (2007) seems pretty scary to me. Am I missing something here? Sand and corn gonna save us? Guess we'll find out soon enough.
The other main uncertainty is the status of discovered undeveloped resources on the books of the super majors. Fields discovered 2 decades ago that were considered sub-commercial then and have never been booked.