The Oil Drum

New liquids capacity with first oil in 2003 as estimated from Petroleum Review MegaProject report in Jan 2004, and estimate from Wikipedia table as of November 25th, 2007.

Oil production is highly pyramidal and almost half of the world production is coming from less than 3% of the total number of oilfields. Therefore, tracking large oil projects seems like a good approach and it is generally easy to gather good information about a few hundreds of important projects. The most notorious studies are from Chris Skrebowski (ODAC) that has tracked megaprojects since 2004 (see references at the bottom of this post). Initially, only projects that could produce 100 kbpd and more were included. In 2007, the last update included also 40,000 bpd and more. However, forecasted increases in new production capacity have been overly optimistic. So what went wrong? They are many possible causes: demand destruction due to high prices, significant project delays, withheld capacity, larger decline of the resource base, etc..  Having a good estimate of the decline rate of the resource base (Most estimates are ranging between 2 and 6%/year) is fundamental for the precision of supply forecasts derived from megaproject database (see Rembrandt's recent post). Stuart is also looking at this problem here.

As happened at the last ASPO meeting in Boston, the Conference organizers had arranged for a mystery reporter to act at the end of today’s papers as a Mystery “Guest Responder,” to review and comment on the papers of the day. It turned out to be James Kunstler , and while I had hoped his summary might have made it easier to cover a day where there was a vast quantity of information, and though he gave a concise and effective summary, our views on what was most interesting appear to differ quite a bit. And so, gentle readers, you are stuck once again with my perception. But since there are a lot of TOD readers and contributors here (a pleasure to put a face to the name) please do chip in with your views and comments, particularly if you disagree with what I write.

The atmosphere seemed a little different today, perhaps the influence of more “energy professionals”, investment advisors and professionals made it seem more of a business conference, perhaps the nature of the message that came at us as the papers proceeded were a sobering influence. After the ASPO meeting in Cork I had become a little more worried about the approaching problems, and had, as I noted, begun to see 2009 and 90 mbd as the critical numbers. Today I think I added the first twinge of terror to my emotional lexicon. We talk about it with an academic dispassion, we list the numbers and plot the curves but the numbers that we heard today have an immediacy and an impact that indicate the anonymity with which we exist in many media is perhaps going to change sooner than many of us have anticipated. This was the day of revising numbers, of reviewing past data in light of the changes since last year, and so let me, “start at the beginning” with the first paper of the day.

After yesterday's discussion of on-stream production growth (or the lack thereof), it would seem apropos that we follow that up with a discussion of the existing largest fields and their decline rates.

Greyzone and others worked a while back to assemble as much data as they could about the largest producing oil fields, their peak year, and whether or not they were in decline, and if so, the decline rate.

I thought I'd repost this as a discussion point, but also to accomplish two other goals: 1) can we expand this to the top 50 fields easily? is that a worthwhile exercise? and 2) is there any more data out there that can fill in the blanks (note that most of the missing data is from SA) that are present?

Here's a link to the data, and here's a link to the original thread that started this all.

Most of us thinking about peak oil have been aware for some time that the central uncertainty is the decline rate on fields in production (FIP). This dramatically affects when one believes peak will be, and seems to be the main difference between more pessimistic projections such as Chris Skrebowski's , and CERA's. It's also critically important in assessing the economic impact, since the faster total production declines, the harder it will be for the economy to adjust, and as we go further and further past peak, the fewer new projects there will be to add to the declining bulk of production.

In the past, peak oil projections have used fairly low decline rates for FIP - 3%-6%. There are now several pieces of evidence that the FIP decline rate might be more like 8%. Adding that to Chris Skrebowski's list of new projects makes for a very rough ride:

Production projection with 2005 ODAC Megaprojects plus various average decline rates of existing fields and the supply required to maintain "business as usual".