Articles tagged with "oil production"
Posted by Heading Out on August 25, 2013 - 5:04am
Tags: alaska, bakken, colombia, kazakhstan, malaysia, non-opec production, north dakota, oil production, oman, opec, russia, saudi arabia, south sudan, sudan [list all tags]
The news that Saudi Arabia is planning to employ 200 drilling rigs next year (up from 20 back in 2005) suggests that there is a recognition that future reserves may not measure up to the planned volumes needed. Plans now include exploration of the shale deposits in the country, looking primarily for natural gas. There are estimates that this resource could run as high as 600 trillion cubic ft. Current plans are to drill seven exploratory wells in the Red Sea, off Tabuk.
This is across the country from the major oil fields currently in use, which lie more along the Persian Gulf coast, centered perhaps around Damman. It therefore suggests that they are looking for extensions of the Israeli and Egyptian fields into northern KSA. (Minister Al-Naimi said that they still “had to find them.”)
In discussing the venture Saudi Minister of Petroleum and Mineral Resources Ali Al-Naimi also noted that, choosing to look for – and presumably finding - natural gas, would take the pressure off the country to maintain its oil reserve.
Al-Naimi said that prospects for global production of shale gas and oil – including in China, Ukraine, Poland and Saudi Arabia – were so promising that the Kingdom might not need to continue with its decades-long policy of maintaining an oil-output cushion for use in global supply disruptions. “It is not a question whether Saudi Arabia has spare (oil) capacity. It is a question of whether we need to spend billions maintaining it at all,” Al-Naimi said.
The Oil Drum staff wishes a Merry Christmas to all in our readership community. We are on a brief hiatus in this period, and will be back with our regular publications early in the new year. In the meantime, we present the top ten of best read Oil Drum posts in 2012. The third in this series is a January 2012 guest post by Matthieu Auzanneau, a freelance journalist living in Paris. This article previously appeared in Le Monde.
Olivier Rech developed petroleum scenarios for the International Energy Agency over a three year period, up until 2009. This French economist now advises large investment funds on behalf of La Française AM, a Parisian assets management firm. His forecasts for future petroleum production are now much more pessimistic than those published by the IEA. He expects stronger tensions as of 2013, and an inevitable overall decline of oil production "somewhere between 2015 and 2020", in the following interview.
Olivier Rech, responsible for petroleum issues at the International Energy Agency from 2006 to 2009.
Uncertainty whether Russia can maintain its high level of oil production continues - 10.7 million b/d in 2012 to date on average. A new more benign tax regime recently put into place and significant industry investments may plausibly enable the Russian Bear to extend its “plateau production” to 2020.
The post below outlines how this impressive achievement has been made possible, given that the decline of existing production is plausibly 6% or more every year for most old giant fields in West Siberia. In other words, the Russian oil industry needs to invest substantially in pushing more oil from existing fields (lowering decline rates) and new field developments to keep production steady.
How long production levels can be maintained beyond 2020 is a difficult question, and one that I have left to answer another day. A view of ongoing developments and things to come up to 2020 is available below the fold.
This is a guest post by Stephen Sorrell, senior lecturer Science and Technology Policy Research, Sussex Energy Group, and lead author of the UKERC Global Oil Depletion report, and Christophe McGlade, doctoral researcher at the UCL Energy Institute. This post was slightly revised by the authors and updated here on 25/07/2012. Please see paragrapghs 8 and 9 below the fold for the updated text.
Commentary on: Oil: 'The Next Revolution: The Unprecedented Upsurge of Oil Production Capacity and What it Means for the World' - Leonardo Maugeri, Belfer Center for Science and International Affairs, Harvard University
Summary Maugeri's analysis and conclusions are critically dependent upon the decline rates applied to existing and future fields, and yet he does not explicitly say what these decline rates will be. However, Maugeri’s assumptions can be derived from his Table 2, which projects gross and net capacity additions over the period to 2020. Doing so suggests he uses an average annual decline rate for all fields of 1.6% over this period, which is less than half of the IEA and CERA estimates for 2008 (4.1%/year and 4.5%/year respectively). The discrepancy is even greater since the IEA and other analysts project an increase in average decline rates over the 2011-20 period. If we replace Maugeri’s 1.6% decline rate assumption with the IEA estimate of 4.1%, the projected loss of production capacity over the period to 2020 increases from 11 mb/d to 26.5 mb/d. In turn, the projected global production capacity in 2020 reduces from 110.6 mb/d to 95.1mb/d (a reduction of 14%). Since average decline rates would be expected to increase over this period, this projection must be considered optimistic.
Recent Tech Talks have focused on the increased use of novel technology in Saudi Arabia as a means of recovering oil stranded during the waterfloods that have successfully sustained production over the past few decades. That technology is further expanded with the use of carbon dioxide injection as part of an Enhanced Oil Recovery program. The CO2 project has been in the works for some years, with an initial estimate that some 40 million cubic feet of CO2 would be injected daily into flooded areas of the Ghawar field. The gas will come from the Uthmaniyah Injection Plant and will be initially injected into seven wells in the Uthmaniyah section of Ghawar. The initial flood will be monitored, since it is important to ensure that the CO2 finds the oil that it will help flow to production wells.
Aramco has also recently announced success with changing the make-up of the injection water being pumped into the fields to sustain pressure. By altering the ionic composition and salinity of this water, it has been possible to significantly increase the amount of oil that is liberated and thus recovered from the reservoirs.
Ghawar is sufficiently large that it has been divided into different segments, and the conditions vary between them. Because of the differences between the various regions, the overall statement that Ghawar is producing some 5 mbd has to be read with a degree of caution, lest it be presumed that this has continued to be from the same regions of the overall field. (And while this article deals with oil production, it should be noted that Ghawar also produces around 2.5 billion cubic feet (bcf) of natural gas a day.)
The US Energy Information Administration (EIA) recently released full-year 2011 world oil production data. In this post, I would like show some graphs of recent data, and provide some views as to where this leads with respect to future production.
World oil supply is not growing very much
The fitted line in Figure 1 suggests a “normal” growth in oil supplies (including substitutes) of 1.6% a year, based on the 1983 to 2005 pattern, or total growth of 10.2% between 2005 and 20011. Instead of 10.2%, actual growth between 2005 and 2010 amounted to only 3.0% including crude oil and substitutes.
The shortfall in oil production relative to what would have been expected based on the 1983-2005 growth pattern amounted to 4.7 million barrels in 2011. This is far more than any country claims as spare capacity. This is no doubt one of the reasons why oil prices are as high they are now. These high oil prices tend to interfere with economic growth of oil importing nations.
The shortfall in growth especially occurred in crude oil. Figure 2, below, shows crude oil production separately from substitutes.
Between 2005 and 2011, crude oil production rose only 0.5%. It was mostly the substitutes that grew.
The following interview is a guest post by Matthieu Auzanneau, a freelance journalist living in Paris. This article previously appeared in Le Monde.
Olivier Rech developed petroleum scenarios for the International Energy Agency over a three year period, up until 2009. This French economist now advises large investment funds on behalf of La Française AM, a Parisian assets management firm.
His forecasts for future petroleum production are now much more pessimistic than those published by the IEA. He expects stronger tensions as of 2013, and an inevitable overall decline of oil production "somewhere between 2015 and 2020", in the following interview.
Olivier Rech, responsible for petroleum issues at the International Energy Agency from 2006 to 2009.
Recently, the International Energy Agency’s Chief Economist Fatih Birol was quoted as saying,
In the next 10 years, more than 90% of the growth in global oil production needs to come from MENA [Middle East and North African] countries. There are major risks if this investment doesn’t come in a timely manner.
While I agree that we need more oil production, I think we are kidding ourselves if we expect that 90% of the needed growth in global oil production will come from MENA countries. In this post, I will explain seven reasons why I think we are kidding ourselves.
Reason 1. MENA’s oil production, as a percentage of world oil production, has not increased since the 1970s, suggesting that MENA really cannot easily ramp up production.
MENA’s oil production amounted to more that 40% of the world’s oil production back in the mid-1970s, but is now down to 36% of world oil supply. It is hard to see anything that looks like an upward trend in MENA’s share of world oil supply, even when high prices hit. OPEC talks big, but its actions do not correspond to what it says.
Like many of you, I am often unhappy with our political leaders. One thing that annoys me the most is that many will say or do just about anything to get elected. By now, you have surely heard the news that Republican presidential hopeful Michele Bachmann has promised a return to $2/gallon gasoline if she is elected president:
NEW YORK (CNNMoney) -- President Michele Bachmann has a promise: $2 gas.
"Under President Bachmann you will see gasoline come down below $2 a gallon again," Bachmann told a crowd Tuesday in South Carolina. "That will happen."
"The day that the president became president gasoline was $1.79 a gallon," Bachmann said. "Look what it is today."
Posted by Heading Out on August 21, 2011 - 6:32am
Tags: alaska, cook inlet, natural gas production, natural gas reserves, natural gas resources, oil production, oil reserves, usgs [list all tags]
Russian visitors had already noted the presence of oil seeps in Alaska, although they had not done anything about it by the time the tsar sold the land to America on March 30, 1867. Russian history would have it that some $165,000 of the $7.2 million of the sale was used to persuade doubting American legislators and members of the media of the value of the purchase. The oil can still be seen coming from current seeps such as this one:
These seeps occur both on and offshore, and as happened in the rest of the country, it was these seeps that brought prospectors to the region and where the first wells were drilled.