Oilfield Hacks and Future Oil Prices

Hack: A modification of a program or device to give the user access to features that were otherwise unavailable to them.

While a cult of Peak Oil adherents fret about the end of the hydrocarbon age, we’ve been focusing on trends that will provide buffering to the upcoming declines in oil production. Don’t get me wrong, I’m not saying that Peak Oil won’t happen. However, the dreaded peak may turn into a downward sloping plateau supported by higher prices. This high price plateau should buy the planet enough time to start thinking about conservation and using alternate energy sources.
One little known fact about the oil business is that the majority of the oil discovered to date will never be produced. Engineers use the term “recovery factor” to describe what percentage of the “original oil in place” or OOIP will be produced. In the United States it is estimated that 66% of the oil discovered to date or the OOIP is left in the ground.

State oil companies control approximately 80% of the world’s oil reserves. The vast majority of these countries are not friendly towards the United States.

The discovery of giant oilfields today is hampered by the fact that giant oilfields are the ones that are discovered first in an exploration cycle. The longer we look for them the less likely we are to find them. Giant fields are usually discovered first. 

Seeking Alpha