[rockdoc123]

I was contemplating the peak and how it would occur on a global basis and one thing that keeps worrying me is the growing influence of government oil companies in the international oil and gas exploration/development business. In the past few years we have seen very aggressive behavior from CNPC (Chinese National Petroleum Co) and ONGC/Videsh (Indians) both from the standpoint of obtaining exploration contracts through bids or negotiation and the acquistion of companies. Both countries are desparate to secure a long term energy supply as evidenced by the Chinese foothold in Sudan and more recently in the Canadian oil sands. Sinopec was also one of the foreign companies paying an outrageous amount to explore for gas in Saudis Rhub al Khali area. The Indians have also a reasonable position in Sudan and have signed deals with Qatar to supply LNG and Iran to supply gas. My question is when we reach peak and start down the slippery slope who is going to have all the marbles? If the Saudis still control most of the hydrocarbons you would imagine they will sell to the highest bidder but lets say that the Indians, Chinese and several other National oil companies have procurred much of the outstanding supply for their own use through long term contracts. Would the peak then hit North America and Europe harder and faster? Would the US try to use influence or guns to guaranty their fair share? Complicating things further if the US started to get pushy, would OPEC countries (most of whom seem to not like the US anymore) decide to peg the barrel on the Euro rather than the USD (not an economist but would not this have a huge impact on US money flow and demand for same?). Would be interested in your opinions.

[RonMN]

all i can guess is that the more unevenly the oil is distributed...the more war there will be.

[nero]

I agree peak will hit countries at different times. Consider that many developing countries subsidize petrol consumption. These countries if they don't have domestic production are basing their government's stability on their ability to continue this subsidy as the price of oil skyrockets. No wonder some of them are hedging their bets by agressively locking in foreign suppliers. Why do you consider what they are paying an outrageous amount? Most IOCs are conservatively basing their decisions on $25 dollar oil because the risk for them is all weighted on the side of over estimating the future price of oil. For countries however the real risk is in underestimating the future price of oil.

[pip]

I've wondered about this also. My opinion is that this: I can afford to pay for more for energy and probably the majority of the developed world can too. I still have some fat left in my spending for the cost of everything to rise. I think after peak developed countries may be able to continue to consume oil at a growth rate at the expense of the less developed world.

If I can pay $100 for oil and someone in Africa can't, then I just got a big boost in oil supply.

[MD]

I am convinced the United States will suffer the collapse of the Petrodollar within the next 24-26 months(perhaps much sooner).
If so, you could see US consumption crash from 20 to 10 million barrels a day very rapidly.

The producting nations will then likely experience a glut, while the consuming nations, unless they have desirable exports, will experience shortage. The United States could possibly suffer the worst.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'W')hy do you consider what they are paying an outrageous amount? Most IOCs are conservatively basing their decisions on $25 dollar oil because the risk for them is all weighted on the side of over estimating the future price of oil

[MicroHydro]

Ironically, the country (IMO) in the best situation for peak oil (drumroll please) is Russia.

Today, Russia has about half of US population and just over a tenth of US oil consumption. So they already live lean. They also produce almost three times as much oil as they consume. So they can sell their surplus to the EU and China and have the ability to supply their own oil needs for a long time. When the oil runs out, they have the largest forest on the planet available for methanol production.

They have a large enough nuclear deterrent that they are immune to the threat of resource theft that hangs over places like Venezuela. Russia has a well educated population. Aside from jihadist enclaves like Chechnya, they are relatively free of religious extremism like the USA rapture cult.

Ironically, Russia is the country most likely to have a net benefit from global climate change. They will not be particularly impacted by sea level rise, and a longer growing season is good for Russia. The Gulf stream shutting off is not an issue for Russia either.

Russia is controlled by murderous gangster cartels and has no civil liberties or free press. There are many environmental disasters. Much of the infrastructure has decayed due to incompetence and corruption. But, the same could be said for all the great powers at this point.

[nero]

$this->bbcode_second_pass_quote('rockdoc', 'T')hat isn't true at all. BP is one of the big companies that keeps a low price forecast but pretty much everyone else is basing their bets on the forward strip.....which is $45+. How do I know this, just a simple calculation of what oil companies need to meet their hurdles (at least 15 - 20% IRR) and what has been bid recently for assets such as EnCana's Equador production and the blocks that went in the recent Libya round. Incidently backing out the bids for some of these blocks which have significant exploration risk indicates these bidders were betting on 50+ oil. That is extremely unusual for IOC's to take this aggressive a stance.

[SD_Scott]

Good topic. I wonder how many people around the world are being priced out of the market right now. For example, of all the people around the world that use between 1 and 3 barrels of oil per year, how many will be able to sustain that usage if prices go higher? Low income rural folks here in the US can't tolerate much more of an increase.

Geopolitically, I think it will play out the same way it always does. The biggest and strongest make the rules.

I'm trying to find reports on low income people around the world that are having to suddenly do without oil. The Philippines and Indonesia might be a good place to research.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'I')ronically, the country (IMO) in the best situation for peak oil (drumroll please) is Russia.

[FatherOfTwo]

I have a question.

Do all of these investments and contracts really mean that they are securing a long term contract for oil at a fixed price, thereby subverting the price they would normally pay for oil on the open market? Or are they merely ensuring that whatever price the oil is sold for, they’ll be in on the profits?

[MicroHydro]

$this->bbcode_second_pass_quote('rockdoc123', '')$this->bbcode_second_pass_quote('', 'I')ronically, the country (IMO) in the best situation for peak oil (drumroll please) is Russia.

[SD_Scott]

These are the kind of reports I expect to see more of.

http://english.people.com.cn/200505/31/ ... 87729.html

[Leanan]

I think the U.S. will suffer a lot, because we are so very dependent on oil. We suffered the most during the Great Depression because we were the most industrialized, and I think peak oil will be similar.

The countries that do well will be those that produce more oil than they need, assuming they can avoid being "Iraq'd." Russia, as someone upthread said. And Venezuela, as the June ASPO newsletter mentioned. (They recommend the Venezuelan bolivar as the currency to invest in for a peak oil world.)