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THE Gulf of Mexico Oil Thread (merged)

General discussions of the systemic, societal and civilisational effects of depletion.
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Re: Mexico May Have Hit the Mother Lode in Oil Find..

Unread postby smiley » Wed 15 Mar 2006, 15:30:31

Every year or so Mexico announces the biggest oil find in a century, it is like a national tradition. And so far no oil has ever showed.

The fact that Pemex does not mention their great achievement on their website makes me conclude that this find mostly concerns political oil. The kind that you cannotr put in your tank and doesn't last beyond the next elections.

Besides it would be very interesting if Pemex was able to estimate the reserves of such a reservoir with a single exploration well.
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Re: Mexico May Have Hit the Mother Lode in Oil Find..

Unread postby nth » Wed 15 Mar 2006, 15:36:59

$this->bbcode_second_pass_quote('Leanan', '
')
That looks like a bumpy plateau to me. If Hirsch's work is correct, it won't last long. The peak is sudden and unexpected. You never see it coming.

Sure, there will be lots of oil coming online next year. But how much will Ghawar, Cantarell, Burgan, and others have declined by then? Prudhoe Bay was a huge find, but it wasn't enough to change the U.S. peak. It was just a bump on the downslope.


Hmm...
I will say this. You are right that PO will hit when industry experts don't expect it as majority of them don't think PO will hit within 10 years from what I read.

Even Campbell don't believe that Middle East oil will hit significant decline within 5 years, so I doubt PO in 2005.

Comparing US PO and the addition of Alaska is a joke. US was already in a huge decline when Alaskan oil was producing large volumes. If the decline wasn't so great, then Alaska would change US PO as it created a second Peak.

One thing going for you and other 2005 PO is that Norway is dropping fast.
I bet Mexico will see a significant drop, too.
Nigeria's government has decided to fight rather than appease, which may backfire and 500k to 1mbpd will be in jeopardy.
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Re: Mexico May Have Hit the Mother Lode in Oil Find..

Unread postby Leanan » Wed 15 Mar 2006, 15:46:14

$this->bbcode_second_pass_quote('', ' ')US was already in a huge decline when Alaskan oil was producing large volumes. If the decline wasn't so great, then Alaska would change US PO as it created a second Peak.


Exactly. That is what the argument for "peak oil in 2005" is. No one is saying there isn't plenty of new production coming online. They're saying it won't be enough to offset the decline of existing wells.

That is one of the strengths of Hubbert's method. New discoveries really don't change the peak much, as calculated with a "Hubbert linearization." If Prudhoe had come online earlier, it would have produced a higher peak, but not a later one.
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Re: Mexico May Have Hit the Mother Lode in Oil Find..

Unread postby PWALPOCO » Wed 15 Mar 2006, 15:50:47

Leanan ,

Be mindful of the fact that the graph , as compelling as it appears to be that the plateau is at hand, represents only a tiny portion of the world oil production history.

However , it does "look" like the real deal , doesnt it ?

Im not totally sure to be honest , this is my first time playing "Spot the Catastrophe"

Paul
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Re: Mexico May Have Hit the Mother Lode in Oil Find..

Unread postby nth » Wed 15 Mar 2006, 16:00:33

$this->bbcode_second_pass_quote('Bleep', '')$this->bbcode_second_pass_quote('nth', 'T')hunderhorse is only going to produce 200kmpd. I doubt it plays a big role in PO.

Well this thread is about a Gulf of Mexico deep water discovery. I doubt it will play a big role in PO either.


GoM does play a big role!
GoM deep water is going to produce over 1mbpd.
I think that is big. You may not.
I remember someone on these boards stating that 2mpbd is insignificant.
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Re: Mexico May Have Hit the Mother Lode in Oil Find..

Unread postby nth » Wed 15 Mar 2006, 16:03:31

$this->bbcode_second_pass_quote('Leanan', '')$this->bbcode_second_pass_quote('', ' ')US was already in a huge decline when Alaskan oil was producing large volumes. If the decline wasn't so great, then Alaska would change US PO as it created a second Peak.


Exactly. That is what the argument for "peak oil in 2005" is. No one is saying there isn't plenty of new production coming online. They're saying it won't be enough to offset the decline of existing wells.

That is one of the strengths of Hubbert's method. New discoveries really don't change the peak much, as calculated with a "Hubbert linearization." If Prudhoe had come online earlier, it would have produced a higher peak, but not a later one.


There are a lot of new oil coming online before we have significant decline that is why your example does not work. If we are hitting significant declines then yes.

Also, your graph is misleading. You could say 2004 is PO, too. As Jan of 2005 saw a drop in oil production, too!
My gosh whoever predicted PO in 2004 are right!
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Re: Mexico To Strike Oil?

Unread postby Starvid » Wed 15 Mar 2006, 16:08:24

http://www.peakoil.com/fortopic18316-0-asc-0.html
Peak oil is not an energy crisis. It is a liquid fuel crisis.
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Re: Mexico May Have Hit the Mother Lode in Oil Find..

Unread postby Leanan » Wed 15 Mar 2006, 16:16:39

$this->bbcode_second_pass_quote('', 'T')here are a lot of new oil coming online before we have significant decline that is why your example does not work. If we are hitting significant declines then yes.


But that was true for the U.S. as well. Prudhoe was discovered in 1968.

The problem is that the new oil discovered tends to be fields that are smaller than the fields discovered first, and/or difficult to produce from some reason. So you need an awful lot of them to make up for the easy oil you discovered early on. The low-hanging fruit is picked first.

There's a lot of new oil supposedly in the pipeline, but these projects almost never come online as scheduled, with as much oil as claimed. Hurricanes, technical difficulties, labor troubles - there are a zillion things that can go wrong, and usually do. There are a lot of unexpected things that can make a project late, but few that can make it early. Sure, eventually it will all come online, but by then, how far will we have declined?

Thunder Horse is the classic example. It was supposed to be producing in the fall of 2005. Oops.

$this->bbcode_second_pass_quote('', 'A')lso, your graph is misleading. You could say 2004 is PO, too. As Jan of 2005 saw a drop in oil production, too!


It's not my graph, it's Stuart's. The blue line is raw data; lately, it tends to be revised downward on further review.

It's hard to see from the graph, but 2005 is definitely higher than 2004. May 2005 and December 2005 are very close, but EIA at least has December higher. (Not that it's statistically significant, of course.)
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Re: Mexico May Have Hit the Mother Lode in Oil Find..

Unread postby nth » Wed 15 Mar 2006, 16:56:54

$this->bbcode_second_pass_quote('Leanan', '')$this->bbcode_second_pass_quote('', 'T')here are a lot of new oil coming online before we have significant decline that is why your example does not work. If we are hitting significant declines then yes.


But that was true for the U.S. as well. Prudhoe was discovered in 1968.

The problem is that the new oil discovered tends to be fields that are smaller than the fields discovered first, and/or difficult to produce from some reason. So you need an awful lot of them to make up for the easy oil you discovered early on. The low-hanging fruit is picked first.

There's a lot of new oil supposedly in the pipeline, but these projects almost never come online as scheduled, with as much oil as claimed. Hurricanes, technical difficulties, labor troubles - there are a zillion things that can go wrong, and usually do. There are a lot of unexpected things that can make a project late, but few that can make it early. Sure, eventually it will all come online, but by then, how far will we have declined?

Thunder Horse is the classic example. It was supposed to be producing in the fall of 2005. Oops.

$this->bbcode_second_pass_quote('', 'A')lso, your graph is misleading. You could say 2004 is PO, too. As Jan of 2005 saw a drop in oil production, too!


It's not my graph, it's Stuart's. The blue line is raw data; lately, it tends to be revised downward on further review.

It's hard to see from the graph, but 2005 is definitely higher than 2004. May 2005 and December 2005 are very close, but EIA at least has December higher. (Not that it's statistically significant, of course.)


Alaska's production was insignificant until 1980's. When the pipeline was completed, it came gushing out and move US production significant higher.
So if this field is true and that it is 10+, then it will increase Pemex production significantly when it does come online.
So, just by this we know that if 10+ is true, then Mexico will have more than one hump. As we all know Pemex is in decline now.

As for the graph, yes, 2005 is higher than 2004, but my point is that the graph does not state that 2005 is highest peak. We have no idea when the Peak will hit by that graph. The evidence in that graph that shows 2005 is peak is the same evidence shown on the graph for 2004 peak.
That is production peak in December and dropped in January.

ThunderHorse has several delays unrelated to hurricanes. The hurricanes save them from printing out more excuses.
I agree there are more downside risk than upside, but nevertheless, there are upsides long and far between.
Exxon is notorious for coming ahead of schedule and under budget. Just look at their Africa and GoM projects.
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Re: Mexico May Have Hit the Mother Lode in Oil Find..

Unread postby smiley » Wed 15 Mar 2006, 16:58:46

$this->bbcode_second_pass_quote('', 'L')eanan ,

Be mindful of the fact that the graph , as compelling as it appears to be that the plateau is at hand, represents only a tiny portion of the world oil production history.

However , it does "look" like the real deal , doesnt it ?

Im not totally sure to be honest , this is my first time playing "Spot the Catastrophe"


I also think this graph is misleading in several ways.

When you take a broader view, spanning the past 25 years or so, you can see that the production in the past years has been slowing down.

The increase in 2003-2004 shows up like a step within that broader, slowing, trend. The reason for the step is OPEC turning on its spare production. In other words that is not natural growth, or growth that will be reproducible in the future.

I couldn't find the right graph with a long enough timescale but this graphs shows that the growth was already anemic before the step.
graph

So this is not a sudden plateau, but a continuation from an earlier trend. While it is hardly rock solid evidence, it does indicate to me that we are close to reaching the limits to growth.
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Re: Mexico May Have Hit the Mother Lode in Oil Find..

Unread postby smiley » Wed 15 Mar 2006, 17:15:47

$this->bbcode_second_pass_quote('', 'S')o if this field is true and that it is 10+, then it will increase Pemex production significantly when it does come online.


Well don't get your hopes up.

$this->bbcode_second_pass_quote('', 'N')oxal is the third exploratory well Pemex has drilled in deep water, which isn't enough to determine the size of the field, said David Shields, an energy consultant in Mexico City.

"The 10 billion barrels would be a substantial amount if there were a basis for it, and there's not at this point," Shields said.

http://www.chron.com/disp/story.mpl/bus ... 23671.html
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Re: Mexico May Have Hit the Mother Lode in Oil Find..

Unread postby nth » Wed 15 Mar 2006, 17:23:38

$this->bbcode_second_pass_quote('smiley', 'W')hile it is hardly rock solid evidence, it does indicate to me that we are close to reaching the limits to growth.


I totally agree that oil production is hitting a plateau.
Chris Skrebowski has compiled a very accurate list of mega projects.
If using BOE, you will get more than 16mbpd of extra production.
He uses barrels of oil and not BOE. He does not take into account non-conventional oil like tar sands, heavy oil from Orinco Belt, liquid condensates, and natural gas.

I think the way he looks at it is very accurate.
The world is seeing 4% decline in oil production due to 20+mbpd of production from declining fields and getting larger and larger.
As they say, we are walking on a slippery slope.

Another reason I don't believe 2005 is PO.
Chris Skrebowski
Last edited by nth on Fri 17 Mar 2006, 13:08:54, edited 1 time in total.
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Re: Mexico May Have Hit the Mother Lode in Oil Find..

Unread postby nth » Wed 15 Mar 2006, 17:35:32

$this->bbcode_second_pass_quote('smiley', '')$this->bbcode_second_pass_quote('', 'S')o if this field is true and that it is 10+, then it will increase Pemex production significantly when it does come online.


Well don't get your hopes up.

$this->bbcode_second_pass_quote('', 'N')oxal is the third exploratory well Pemex has drilled in deep water, which isn't enough to determine the size of the field, said David Shields, an energy consultant in Mexico City.

"The 10 billion barrels would be a substantial amount if there were a basis for it, and there's not at this point," Shields said.

http://www.chron.com/disp/story.mpl/bus ... 23671.html


Yes, you are right that is not SEC proven reserves and actually does not meet probably reserves, either. All they are saying is that the field size based on 2D seismic data and confirmed with exploratory drilling to state it can be 10+. Doesn't say much if you were a betting man. The odds don't look good, especially they don't tell lthe results of the drilling and only stated they found oil.

Well, articles state that Pemex's 2D seismic data claim that there are potentials for 50+b undiscover oil. That is almost the same as the article of this thread.
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Re: Mexico May Have Hit the Mother Lode in Oil Find..

Unread postby smiley » Wed 15 Mar 2006, 18:22:32

$this->bbcode_second_pass_quote('', 'A')ll they are saying is that the field size based on 2D seismic data and confirmed with exploratory drilling to state it can be 10+.


Below is a picture of the Cantarell complex. I'm no geologists, but if the new complex is anything like this I cannot imagine that with 4 wells and a few seismics you can say that it holds 0.1, 1, 10 or 100 bb of oil.

Image

So they probably have found oil, but any numbers that are attributed to this find are for now completely imaginary.
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Re: Mexico May Have Hit the Mother Lode in Oil Find..

Unread postby Leanan » Wed 15 Mar 2006, 19:11:52

nth, please learn to use the "link" button. It's the one with chain links.
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Re: Mexico May Have Hit the Mother Lode in Oil Find..

Unread postby Leanan » Wed 15 Mar 2006, 19:21:36

$this->bbcode_second_pass_quote('', 'A')laska's production was insignificant until 1980's. When the pipeline was completed, it came gushing out and move US production significant higher.


Yup. And there you see the problem. It took awhile to build the infrastructure to produce the oil. It's not "low-hanging fruit." The new fields coming online will probably be even more challenging. After all, there's a good reason why they haven't been produced before.

$this->bbcode_second_pass_quote('', 'S')o if this field is true and that it is 10+, then it will increase Pemex production significantly when it does come online.


It might. Word is, this oil is heavier than Cantarell's. That means it will be harder to get out of the ground - assuming the find is as good as they hope, whiich is highly unlikely.

$this->bbcode_second_pass_quote('', 'S')o, just by this we know that if 10+ is true, then Mexico will have more than one hump. As we all know Pemex is in decline now.


We don't know 10+ is true. And even if it is...Mexico might have another hump, just as we did with Prudhoe, but it won't change the world peak any.

$this->bbcode_second_pass_quote('', 'A')s for the graph, yes, 2005 is higher than 2004, but my point is that the graph does not state that 2005 is highest peak. We have no idea when the Peak will hit by that graph.


The graph is not what proves the peak is now. It's merely suggestive. It's "Hubbert linearization" that predicted the 2005 peak.
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Re: Mexico To Strike Oil?

Unread postby rockdoc123 » Wed 15 Mar 2006, 19:50:28

Heres the news release from IHS Energy this AM:

$this->bbcode_second_pass_quote('', 'F')urther to DA 14 Mar 06: 3rd in 3-deepwater well campaign in Miocene Trend, approx. 100km NW off Coatzacoalcos in Sureste Basin, WD 936m, PTD 4,000m, last reported below 3,432m in mid Feb 06, reportedly the 'massive' oil find suggested yesterday, albeit testing still remains to be done. Ocean Worker SS.

Officials suggest the structure could hold up to 10 Bbbl, likely pretty optimistic until testing is completed. Deepwater Mexican wells have been US$25-30 MM operations; the 1st well Nab 1 was a heavy oil find, and Caxui 1 was dry.


Bottom line....1 well, untested.......likely wild speculation at this point as to actual size.
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Re: Mexico May Have Hit the Mother Lode in Oil Find..

Unread postby turmoil » Thu 16 Mar 2006, 00:01:53

$this->bbcode_second_pass_quote('Dreamtwister', 'L')et's put it into some smaller numbers, so it's easier to follow.

<snip>


:) [smilie=eusa_clap.gif]

well done ol chap, well done.

That took a lot of patience. Thank you.
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"When you have excluded the impossible, whatever remains however improbable must be the truth"-Sherlock Holmes
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Re: Mexico To Strike Oil?

Unread postby joewp » Thu 16 Mar 2006, 00:47:09

$this->bbcode_second_pass_quote('AirlinePilot', 'W')hy isnt this getting more play? Something potentially this big I would think we would see and hear a lot more about. Is there anything to this? Seems like a big find unless its just more speculation on PEMEX's part.

Can't seem to find much about it.


My girlfriend on CNBC, Melissa Francis mentioned it and said traders weren't very concerned since it would be at least 10 years before this oil is on the market and it's probably heavy oil.

Sometimes even CNBC can get it right.
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Re: Mexico's Fox To Announce New Deep Water Oil Find

Unread postby cudabachi » Thu 16 Mar 2006, 12:26:38

Just for the record, it's not always easy to predict the physical properties of a reservoir fluid based on depth alone.

You can find tar trapped in reservoirs very near the surface or very light oil (high gas oil ratios) at very high pressures and temperatures.
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