The Oil Drum

This is a guest post by Jean Laherrere.


World Arctic cumulative discovery.

We have been a little fixated over the recent CERA report on the myth of an imminent peak oil problem, and, in the process, have not given enough recognition to another report that has just been released. Wood MacKenzie is also a company that provides information on the energy industry and, is the often more conservative evaluator of reserves that Jean Laherrere has used in some of his studies. On November 1 Leanan noted their press release, which can be seen on video in which they noted that while the Arctic Regions do, in fact, contain significant amounts of oil

The US can no longer consider the Arctic as a long-term strategic energy supply source, according to a new joint study by Wood Mackenzie and Fugro Robertson, "Future of the Arctic." The study found the Arctic potential is significantly less than previous estimations had suggested, and the mix of resources have been found to contain much less oil and more gas.
"These findings are disappointing from a world oil resource base perspective," said lead study author, Andrew Latham, Vice President, Energy Consulting at Wood Mackenzie.
The study shows only approximately one quarter of the oil volumes previously assessed in key North American and Greenland basins.

Prudhoe Bay may take months to come online.

BP expects to replace 73% of Prudhoe pipelines now.

Here's the first Prudhoe Bay thread.

I had intended to write a short piece tonight about the life of an oilfield, but will put that back a little to draw attention to a just posted story in the New York Times.

Because of severe corrosion in one of the pipelines, BP is temporarily closing the production from the Prudhoe Bay oilfield, and, in the process, cutting off some 400,000 barrels of oil a day, some 8% of US production. The NYT story suggests that this might raise prices by as much as $10 a barrel.

ANCHORAGE, Alaska - In a sudden blow to the nation's oil supply, half the production on Alaska's North Slope was being shut down Sunday after BP Exploration Alaska, Inc. discovered severe corrosion in a Prudhoe Bay oil transit line.

BP officials said they didn't know how long the Prudhoe Bay field would be off line. "I don't even know how long it's going to take to shut it down," said Tom Williams, BP's senior tax and royalty counsel.

Once the field is shut down, in a process expected to take days, BP said oil production will be reduced by 400,000 barrels a day. That's close to 8 percent of U.S. oil production as of May 2006 or about 2.6 percent of U.S. supply including imports, according to data from the U.S. Energy Information Administration.

MSNBC, Yahoo, Reuters.

and then let's not forget:

OPEC production down in July 0.8%.

Tomorrow will be an interesting day. More under the fold.

UPDATE: From Rigzone

The Department of Energy Monday said it would consider offering refiners oil from the nation's emergency oil stockpile to address supply concerns in Alaska resulting from BP's shutdown of Alaska's Prudhoe Bay field.