Articles tagged with "opec"
Posted by Heading Out on August 31, 2013 - 11:47pm
Tags: biofuel, brazil, deepwater resources, exxonmobil, gulf of mexico, kyle, micawber, ngl, opec, the oil drum [list all tags]
Back in March 2005, I posted my first offering to the new site that Kyle and I had agreed to call “The Oil Drum.” Now, some eight years later, this will be my final Tech Talk to appear on the site, and it is perhaps appropriate to go back to that first post and make a couple of comments on how it panned out. It read as follows:
When I was young I was fascinated by a small china statuette that my grandparents had of Mr Micawber. He is a character, and a sympathetic one, in Charles Dickens's book "David Copperfield", in the course of which he goes into debt. His explanation of his financial condition can be compared to the coming world experience as we now live through Hubbert's Peak. You might, in today's phraseology, call this the Money quote:
'My other piece of advice, Copperfield,' said Mr. Micawber, 'you know. Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and - and in short you are for ever floored. As I am!'.
In this case, consider that our expenses, i.e. the world use of oil, went up last year to around 83 million barrels every day (mbd). (A barrel is 42 gallons). Now as long as our supplies (income) can match this outlay then we are in happiness. This was, in relative terms, where we ended last year.
However this year our expenses are going to go up. It is a little difficult to predict exactly how much but current predictions are for this to be around 2 mbd. Let us equate this to the old English sixpence (which was back then worth about a dime. Twenty pounds being worth about $100).
If we follow the Micawber example - if our income, world oil supply is equal to or greater than our expenses, then we can stay happy. But here is the rub:
When world oil production is just about as high as it can be (non-OPEC countries are now producing just about as fast as they can) and OPEC spare capacity is down to around an additional 1.3 mbd, then our income this year will likely not be much above 85 mbd, if it gets there. (In a later post I will explain why it probably won't).
So we are at the point where, within the next few months, income and expenditures will be in balance (Micawber's twenty pounds). Except that the industry being a big one there are always things going wrong. In the latter part of last year for example we had:
• the hurricanes in the Gulf that closed down about 0.5 mbd of production for several months
• oil production in Iraq, which should be around 3 mbd, but because of pipeline bombings etc dropped below 2 mbd
• there were frequent threatened strikes on the oil platforms in Nigeria
• and Russian production declined more drastically than had been anticipated
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 EIA has noted in This Week in Petroleum that, for the first time, the sum of non-OECD country demand contributed more than half to the total of liquid fuels consumed in the world.
It does, however, point out that the projections of the Short Term Energy Outlook are for the two curves to re-intersect at the end of 2014.
Posted by Heading Out on April 28, 2013 - 5:13am
Tags: crude oil production, liquid fuels, momr, north american production, oil demand, opec, saudi crude production [list all tags]
Just this month, Saudi Aramco announced that production had begun at their Manifa oilfield, and by July would be supplying up to 500 kbd to the new refinery that is being built at Jamail with the collaboration of Total. The first oil from the refinery is expected to ship in August, and both projects are currently ahead of schedule. Manifa will further increase in production next year, to 900 kbd, with the additional flow going to the Yanbu refinery being built with the collaboration of Sinopec. Both these refineries are designed to take heavy crude, and can also accept oil from the ongoing projects to expand production at Safaniya. Collectively this is said to ensure that the company will be able to achieve a maximum sustainable production of 12 mbd.
The gains in available reserves are required as the current production from Ghawar and the other major fields in the Kingdom continue to decline in production, as was discussed last year. I remain relatively convinced that Saudi Aramco will not increase their crude oil production above 10 mbd, despite the wishes and projections of others that they will end up doing so. By the time that their domestic consumption reaches the point that it lowers exports to a level that would hurt the KSA economy at current prices, the shortages globally will have raised the price sufficiently that the available production at that time will continue to suffice to meet their needs. (This is, however, a projection only for this decade).
This month’s OPEC Monthly Oil Market Report continues to anticipate a significant increase in available crude over the next three years, although this is indirectly recognized through the growth in crude distillation unit (CDU) capacity around the globe in that interval.
Posted by Heading Out on April 21, 2013 - 1:10pm
Tags: 2030, asian pacific, bp energy outlook, china, coal production, crude oil production, natural gas production, north america, opec [list all tags]
I suspect I should apologize. Here I am talking about the future projections for energy production made by companies such as ExxonMobil and Shell, as though they were still the key and only players in the world. Yet in reality, Saudi Aramco (12.5 mbdoe), Gazprom (9.7 mbdoe) and National Iranian Oil (6.4 mbdoe) appear in the list before ExxonMobil arrives (at 5.3 mbdoe), and then there is PetroChina (at 4.4 mbdoe) before BP arrives (at 4.1 mbdoe), and it is only then that we find Shell, which lies 7th at 3.9 mbdoe.
So the projections of the ExxonMobil’s of the world are of somewhat lesser value than they might have been at one time. (For those curious, the list continues with Pemex (at 3.6 mbdoe), Chevron (at 3.5 mbdoe) and Kuwait Petroleum Co (3.2 mbdoe). This not only rounds out the top ten, it also closes out the list of those producing more than 3 mbdoe. (Abu Dhabi comes next at 2.9 mbdoe).
Yet with those caveats, and recognizing that Saudi Arabia now produces only slightly less than ExxonMobil, Shell and BP combined, let me review the BP forecast, having already completed that for ExxonMobil and Shell. While the latter two looked sufficiently far into the future as to obfuscate a little their shorter-term projections, BP is still focusing on the relatively short-term that runs to 2030.
Within that time frame, BP expects overall energy demand to grow by 36%, though like the ExxonMobil projection, BP expects that a “tremendous increase” in energy efficiency will continue to develop, thereby slowing the need for future resources. They point out that without this improvement in efficiency, global energy supply will need to double by 2030 in order to sustain economic growth.
This is particularly true for the United States, which BP sees approaching self-sufficiency in Energy, while it is the continued growth in demand from countries such as China, India and the Asian Pacific countries that provide most of additional need. Comparing their view from 2 years ago with the present there does not appear to be much change in the overall forecast. (Note that after the first two figures all the remainder come from the 2030 BP Energy Outlook).
Figure 1. Comparison of BP data and projections for population growth between their 2011 report (left) and that for 2013. (right)
Figure 2. Comparison of current and anticipated energy demand through 2030, from 2011 (left) and 2013 (right) BP reports.
Posted by Euan Mearns on November 28, 2012 - 3:45pm
Tags: algeria, angola, crude oil production, ecuador, iea, iran, iraq, kuwait, libya, nigeria, oil watch, opec, qatar, saudi arabia, spare capacity, united arab emirates, venezuela [list all tags]
OPEC is currently pumping at close to near term and historic highs of 31.2 mmbpd of crude oil. Outside of Saudi Arabia, the majority of spare capacity is deemed to lie in Iran and Nigeria. Iran could certainly pump more if permitted to do so by the international community. It is doubtful that Nigeria could. The UAE Kuwait, Qatar, Libya, Algeria and Venezuela are all pumping at close to capacity levels. Saudi Arabia alone has meaningful spare capacity of 2.1 mmbpd.
Embedded in the production stack (Figure 1) is an intriguing tale of general strike, international conflict, civil war and sanctions combined with masterly control of oil supply that has kept global markets in balance.
Figure 1 Monthly crude oil production for 12 OPEC countries. All data published in this interim report are taken from the monthly IEA Oil Market Reports.
From May 2007 to August 2010, Rembrandt Koppelaar published an e-report called Oil Watch Monthly that summarised global and national oil production and consumption data from the International Energy Agency (IEA) of the OECD and Energy Information Agency (EIA) of the USA. This is the second in a series of new Oil Watch reports, co-authored with Rembrandt and details crude oil production data for 12 OPEC countries (includes Angola and Ecuador, excludes Indonesia) as reported by the International Energy Agency. Earlier editions:
Posted by Euan Mearns on November 21, 2012 - 12:28pm
Tags: biofuel, bp, condenstae, crude oil, iea, ngl, non-opec, oil watch, omr, opec, processing gains, world total liquids [list all tags]
World total liquid fuel production data published by the International Energy Agency (IEA) suggests that global liquid fuel production has risen steadily (in stages) from 76.3 million barrels per day (mmbpd) in January 2002 to a recent high of 91.3 mmbpd in July 2012. +15 mmbpd represents a 20% uplift in liquid fuel supply in little over a decade.
Figure 1 World total liquid fuel production based on data extracted from the IEA monthly Oil Market Reports (OMR). Chart not zero scaled. All charts are clickable to get a larger version.
From May 2007 to August 2010, Rembrandt Koppelaar published an e-report called Oil Watch Monthly that summarised global and national oil production and consumption data from the International Energy Agency (IEA) of the OECD and Energy Information Agency (EIA) of the USA. Owing to time pressure involved in compiling the statistics, the publication was discontinued. Rembrandt has kindly provided me with his database and I have begun the task of updating the last 2 years of data with a view to re-instating Oil Watch Quarterly. This is the first in a series of interim reports that are co-authored with Rembrandt.
There is a growing impression being given in the discussion of oil and natural gas supplies that the world is moving into a period where there will soon be such a plentiful sufficiency of crude that the US may consider exporting some of its production (h/t Leanan). But if one looks behind the headlines, and particularly at the current status of the largest oilfield contributing toward this rosy picture - the Ghawar field in Saudi Arabia - that optimism becomes more evidently built on a very transient set of data that, as this series of posts seeks to show, will not be sustainable for any significant period into the future.
The three major oil producers (i.e. those producing more than 5 mbd each) are currently seeing surges in production as the world moves to an overall production of 90 mbd. The OPEC June Monthly Oil Market Report (MOMR) notes that this has brought Russia to 10.33 mbd in May, some 100 kbd over the same period in 2011; and Saudi Arabia is reported to have averaged 9.917 mbd in May, up 40 kbd over April. The United States is running at 6.236 Mbd of crude (from the EIA TWIP), while importing 9.117 mbd. The MOMR reports US oil supply at 9.66 mbd on average, but counts more than just crude in this value. The gain over the past year is around 600 kbd. It is interesting to note, in regard to OPEC production the continued difference between the volumes that OPEC reports from direct contact with the suppliers, and that when the numbers are obtained from “secondary sources.”
This post appears in ASPO-USA's December 19th Newsletter.
The results of OPEC’s latest meeting to set oil production quotas were announced this morning. Instead of production targets for individual countries, a group production ceiling of 30 million barrels a day was set. This amount is a bit less than OPEC produced in November 2011 (actual 30.367 mbd), according to its reckoning, and less than it would have produced most of 2011, if Libyan production had stayed on line, based on the amounts shown in its November Oil Market Report.
A recent history of oil production from the November Oil Market Report, both for OPEC and in total, is shown in Figure 1.
This is a guest post by Derik Andreoli, Senior Analyst Mercator International, LLC
Upon exiting the most recent Opec summit, the visibly frustrated Saudi Oil Minister, Mr. Ali Naimi, proclaimed it to be “one of the worst meetings we have ever had.” In the lead up to the meeting, oil traders had come to believe that Opec would increase production quotas to cover the shortfall of light, sweet Libyan crude going into Europe’s peak demand season. This led traders to the conclusion that tight markets would loosen (relatively), and as a consequence, oil traders bid down the price for ‘paper barrels’ (oil futures) by a couple of dollars.
While hindsight may be 20/20, foresight is rarely better than 50/50, and in this case, the market was wrong. Opec failed to revise production quotas, and upon learning of this decision, traders quickly bid the price back up. A couple days later, Saudi Arabia announced that they would break with Opec by lifting production above their allotted quota. Oil traders reacted by bidding the price back down, and in the end, prices had settled back to previous levels as if the summit had never happened. But the story isn’t over until all the holes in the plot have been filled, and all the nagging questions answered.