PeakOil is You
THE Gulf of Mexico Oil Thread (merged)
Re: THE Gulf of Mexico Oil Thread (merged)
by rockdoc123 » Fri 15 Jul 2016, 16:56:52
I think it is important to remember WoodMac looks at a very large range of projects for which their economic data may not be as constrained as that held by individual companies. That being said they look at the full range of projects and often what is captured in their summary analyses is the weighted mean average which can be skewed by number of projects analyzed or other assumptions. Here is a diagram from and early 2016 WoodMac study looking at the world range of economic breakevens. It is a similar story. Note that for ultradeepwater US there is a wide of range of economic breakevens but the weighted mean average is higher than for most of the onshore shale projects.
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Re: THE Gulf of Mexico Oil Thread (merged)
by Tanada » Sat 11 Jun 2022, 23:57:28
I came across this interesting graph that claims oil discoveries in the GOM grow larger by depth of field.
While this seems to be based on solid data I was under the impression that small fields in deep water are not economically feasible because the cost of developing and producing very deep fields requires a very large supply of crude oil to justify the investment.
So which is it, are there more large fields in deeper water or are only the largest deep water fields economically viable to develop?
While this seems to be based on solid data I was under the impression that small fields in deep water are not economically feasible because the cost of developing and producing very deep fields requires a very large supply of crude oil to justify the investment.
So which is it, are there more large fields in deeper water or are only the largest deep water fields economically viable to develop?
$this->bbcode_second_pass_quote('Alfred Tennyson', 'W')e are not now that strength which in old days
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
Moved earth and heaven, that which we are, we are;
One equal temper of heroic hearts,
Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
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Re: THE Gulf of Mexico Oil Thread (merged)
by AdamB » Sun 12 Jun 2022, 08:46:57
$this->bbcode_second_pass_quote('Tanada', 'I') came across this interesting graph that claims oil discoveries in the GOM grow larger by depth of field.
While this seems to be based on solid data I was under the impression that small fields in deep water are not economically feasible because the cost of developing and producing very deep fields requires a very large supply of crude oil to justify the investment.
While this seems to be based on solid data I was under the impression that small fields in deep water are not economically feasible because the cost of developing and producing very deep fields requires a very large supply of crude oil to justify the investment.
Offshore development, like any other, requires a certain IRR threshold. A company specific IRR threshold. That can be achieved not just with large volumes, but by less expensive CapX requirements because of new technologies, changes in regulations or taxation, or any of a myriad of factors that increases the IRR above the company's internal requirement for new project development. Even a future assumption of price in the calculation can change the answer, where once you might have assumed $40/bbl for the next 10 years, now if you assume $100/bbl for the next 5, presto, the IRR changes for the better without movement in any other factor.
$this->bbcode_second_pass_quote('Tanada', '
')So which is it, are there more large fields in deeper water or are only the largest deep water fields economically viable to develop?
More likely that future assumptions of price changed the equation from not or marginally favorable, to favorable. Nothing else needed to change for more expensive projects to begin to come online. It is why the maxim "the cure for high oil prices is high oil prices" works.
Plant Thu 27 Jul 2023 "Personally I think the IEA is exactly right when they predict peak oil in the 2020s, especially because it matches my own predictions."
Plant Wed 11 Apr 2007 "I think Deffeyes might have nailed it, and we are just past the overall peak in oil production. (Thanksgiving 2005)"
Plant Wed 11 Apr 2007 "I think Deffeyes might have nailed it, and we are just past the overall peak in oil production. (Thanksgiving 2005)"
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Re: THE Gulf of Mexico Oil Thread (merged)
by C8 » Sun 12 Jun 2022, 17:48:44
$this->bbcode_second_pass_quote('AdamB', ' ')Nothing else needed to change for more expensive projects to begin to come online. It is why the maxim "the cure for high oil prices is high oil prices" works.
Not true- if ideologically motivated climate alarmists control the govt. then they can shut down new field development in lands/waters they control. They can also sanction and penalize companies/nations that try to get around this.
This may come as a shock to you but, historically, governments have taken complete control over markets- its called Socialism. Since you have admitted elsewhere that you don't (or can't) read- then find YouTube video about the Great Leap Forward- over 40 million died from Mao's theories. Many of the people who favor shutting down fossil fuels are gaining power everywhere. Motivated by fears of global warming Armageddon they will push every limit. The US has, by far, the biggest military in the world and can easily reduce world trade.
Government > Economics
Always has been true- always will be true
You might actually want to read history some day- longs trends continue- and then totally stop. It happens all the time.
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