PLEASE NOTE: click on the link below for the most recent oil forecast update
http://www.theoildrum.com/node/3623 which includes forecasts for Kuwait and the UAE.

Executive Summary

1. World total liquids production (Fig 1) remains on a peak plateau since 2006 and is forecast to fall off this peak plateau in the middle of 2009. According to the IEA, the current peak production of 86.13 mbd occurred on July 2006 and only one year later, June 2007 total liquids production fell to an unexpectedly low 84.50 mbd. A good increase up to 85.10 mbd occurred for September 2007. As long as demand continues increasing then prices will also continue increasing.
   
   
   
2. Forecast world crude oil and lease condensate (C&C) production retains its 2005 peak (Fig 2). The forecast to 2100 shows declining C&C production, using a bottom up forecast to 2012 (Fig 3). The forecast to 2012 shows a 1%/yr decline rate to 2009, followed by a 4%/yr decline rate to 2012.
   
   
   
3. World oil discovery rates peaked in 1965 (Fig 4) and production has exceeded discovery for every year since the mid 1980s. Discoverable reserves in giant fields also peaked during the mid 1960s (Fig 5). The time lag between world peak discovery in 1965 and world peak production in 2005 of 40 years is similar to the time lag of 42 years for the USA Lower 48 (Fig 6).
   
   
   
4. World C&C year on year production changes to June 2007 and July 2007 (Figs 7,8) show significant declines for Mexico, North Sea and Saudi Arabia and significant increases for Russia, Azerbaijan and Angola. As Russia is likely to be on a production plateau and Saudi Arabia, Kuwait and the UAE have probably passed peak production, the world C&C production will continue to decline slowly.
   
   
   
5. Saudi Arabia retains its 2005 C&C peak (Fig 10), which is the same as the peak year for world C&C (Fig 2). Saudi Arabia C&C production has dropped to 8.6 mbd which is 1 mbd less than its peak in 2005. It is now almost a certainty that Saudi Arabia passed peak C&C production of 9.6 mbd in 2005 (Figs 9,10).
   
   
   
6. Kuwait retains its 2006 minor C&C peak (Fig 12). Kuwait C&C production has now dropped to 2.5 mbd which is less than its peak in 2006. There is a strong likelihood that Kuwait has passed its minor 2006 peak (Figs 11,12). Kuwait’s major peak was 3.3 mbd in 1972.
   
   
   
7. UAE retains its 2006 C&C peak (Fig 14). UAE C&C production has now dropped to 2.6 mbd which is just less than its peak in 2006. Once again, there is a strong likelihood that UAE passed its 2006 peak (Figs 13,14).
   
   
   
8. World natural gas plant liquids is forecast to increase due to new OPEC projects (Fig 15). World ethanol and XTL production is forecast to double by 2012 (Fig 16). World processing gains are forecast to decline slowly to 2012 (Fig 17).

As of noon EDT on 6/7, this is the Gonu post of record.

The final models from Chuck Watson of KAC/UCF are in and they are forecasting, based on their damage models, that:

* Qalhat (Sur) LNG terminal: 18 days down time
* Mina al Fahal oil terminal: 14 days down time

(NB: These final damage estimates decreased a bit from initial runs but have been close to these numbers all along--all assume US construction standards.)

Why did we spend so much time on this? As I said before, that answer begins with the fact that the world production of petroleum is plateauing around 85 mbbl/day, so any slight blip in supply or exporting could be quite noticeable on the world markets--as a sizeable portion of the world's petroleum exports go through the Gulf of Oman. This has not changed. Had Gonu remained a more powerful cyclone, because of the lack of supply available to the market I mention above, the scenario could have played out quite differently.

And even so, there are a lot of things we do not know yet. The storm still may have affected petroleum exports from Iran and the UAE for that matter--mainly because of shipping disruptions in the Straits of Hormuz and the Gulf of Oman, but there could also be some real effects on infrastructure and assets depending on storm surge, track and landfall--factors we are still learning about.

I am happy that the human and material cost of this storm has been much smaller than we expected to this point. I hope that people do not forget the people whose lives have been changed by this storm...and there are many in Oman and other countries who need our charitable help. I hope that the news continues to be better than we expected--but I still stand by my decision to cover this storm closely on The Oil Drum.

Under the fold (hit "there's more") are links to previous threads and links to all of the resources we used over the course of the coverage of Gonu. We would ask that you deposit new material in this comment thread.

Newest Gonu thread created on the front page with newest information as of noon EDT on 6/7/07--the new link can be found by clicking here or you can also find it by going to the front page of TOD at theoildrum.com, we'll have a link there for the foreseeable future that will take you to our most recent coverage!

KAC/UCF and Chuck Watson are forecasting, based on their damage models, that the Qalhat (Sur) LNG terminal will be out for 20-30 days and the Mina al Fahal oil terminal will be down for 10-20 days--all of this assuming they are built to US standards.

All tips and resources (*and there are already many down there in the first thread, let's replicate that here today in the second thread! Thank you!*) welcome in the comment thread below. If you have any insights, please email the editors box with the word GONU in the subject.

Last updated at 8pm EDT, 6/5.

Here is a link to the first Cyclone Gonu Thread from yesterday. Please put all new resources and insights here as of 7:30am EDT 6/5, but make sure to check out the first thread as well.

Also, click "there's more" below for MUCH more graphics and links, and there's much more from our readers in the comment thread as well...but you are likely to want to go to link noted above for the most recent coverage.

The following is a guest post by Phil Hart, a petroleum facilities engineer and member of ASPO-Australia. Phil worked for Shell in the UK for five years, before returning home to Melbourne in late 2006. Phil's blog can be found here.

Following a summary of EIA data for 2006, I thought I would make a more detailed country-by-country estimate of the potential for 2007.

Starting with the headline EIA figures for last year:

Crude Oil and Condensate: 73.5 Mb/d (down 0.2)
Natural Gas Liquids (NGLs): 7.9 Mb/d (up 0.14)
Other Liquids: 3.3 Mb/d (up 0.08)

Total Liquids: 84.6 Mb/d (up an insignificant 0.02)
Mb/d = million barrels per day
kb/d = thousand barrels per day

Numbers for November and December suggest real OPEC production cuts in Algeria, Libya, Qatar and UAE. The total cut could be 230kb/d which knocks around 50kb/d off annual average production. I did not expect to find evidence for cuts, but that's how the data looks to me - four small cuts made at the same time by countries that otherwise increased their production last year through announced projects. Thus, I believe those four OPEC members, but only those four, have the ability to restore that production. Without those cuts, crude and condensate production would still be clearly down, but total liquids would have shown a somewhat more significant increase.