[Kingcoal]

$this->bbcode_second_pass_quote('TheTurtle', ' ')I have long maintained that the ecological damage resulting from our society's attempt to keep the SUVs running as long as possible will be a major component of the nightmare to come.

[TheTurtle]

$this->bbcode_second_pass_quote('Kingcoal', '')$this->bbcode_second_pass_quote('TheTurtle', ' ')I have long maintained that the ecological damage resulting from our society's attempt to keep the SUVs running as long as possible will be a major component of the nightmare to come.

[mekrob]

When I mention that the coasts and rest of GoM only has 35 billion barrels URR, you should note that the US GoM that is being drilled now only has a URR of 35 billion as well, has production at about 1.5 mpd and will peak within a few years. Just some more numbers to think about.

[skiwi]

Lack of offshore rigs pumps up oil prices
$this->bbcode_second_pass_quote('', 'L')ONDON - Oil companies have run out of offshore exploration rigs for the first time in almost 20 years.
Projects are having to be delayed or shelved because of the shortage of rigs, while hire costs have soared up to fivefold in two years.

[Eli]

I wonder if it is reasonable to infer from this that we will see an accelerating decline in production rate out of the North Sea.

This sounds a little like what happened in west Texas when the US reached peak. They sank as many wells as they could just to stand still then the decline set in and it did not matter how many wells they sunk.

Unlike West Texas however the North Sea has run out of drilling rigs,that means they have reached the limit on the amount of wells they can start.

We know the North Sea is in decline without many more wells the decline is going to get steeper.

[Graeme]

U.S. Interior Department Plans To Allow More Offshore Oil, Gas Drilling

$this->bbcode_second_pass_quote('', 'T')he U.S. Interior Department has put the final touches on a five-year plan to expand oil and gas drilling in the Gulf of Mexico and offshore from Alaska and Virginia.

Congress will have until the end of June to review the final drilling plan for all three areas.

[Cynus]

We've got to use up that last 15% of oil remaining in the US as fast as possible!
Personally, I'd give all remaining oil to the pentagon. There might be a war to two to fight in the next... forever.

[Troyboy1208]

It makes politicians look good like they are trying to lower gas prices...it aint gonna do much thats for sure.

[Newsseeker]

How high do gas prices have to go before ANWR is on the chopping block? I remember an interview with Simmons where he said that unless the US allowed deep water drillign it should start dismantling the US economy.

[vampyregirl]

recent wells drilled in deep waters of the atlantic and gulf of mexico. natural gas fields developed off the coasts of China and Australia. new finds in persian gulf waters. all pretty good signs. keep in mind the technology for deep offshore drilling didnt exist until the 1970s. lots of unexplored ocean yet. it hasnt peaked in the deep blue sea yet

[emersonbiggins]

Yep, lots of expensive and super-expensive oil left to be found. Shame it won't help much, though.

[RdSnt]

Just because they haven't poked holes everywhere doesn't mean they haven't explored everywhere. There are going to be very, very few surprises regarding the results of drilling.
I'd also remind you that the most recent deep water holes haven't produced anything yet. They may have found oil but they haven't figured out how to get it out of the ground safely and economically.
Thunderhorse isn't producing yet and won't (if ever) for years yet.

[RdSnt]

Just because they haven't poked holes everywhere doesn't mean they haven't explored everywhere. There are going to be very, very few surprises regarding the results of drilling.
I'd also remind you that the most recent deep water holes haven't produced anything yet. They may have found oil but they haven't figured out how to get it out of the ground safely and economically.
Thunderhorse isn't producing yet and won't (if ever) for years yet.

I would also say that none of the deep water sources are going to keep pace with depletion. Both because of their low production rates and very long development cycles. As well, with rising fuel prices, the deep water sites quickly become uneconomical.

[LoneSnark]

$this->bbcode_second_pass_quote('', 'A')s well, with rising fuel prices, the deep water sites quickly become uneconomical.

[Lanthanide]

$this->bbcode_second_pass_quote('LoneSnark', '')$this->bbcode_second_pass_quote('', 'A')s well, with rising fuel prices, the deep water sites quickly become uneconomical.

[LoneSnark]

How did you and your boss decide what your salary would be? I ask, because few employees are in a position to demand anything. They may want to be paid in diamonds, does not make it so.

And how much will the price of the drilling rig go up? well, what are the costs of building it?
Wages for miners to extract iron ore
wages for mill workers to make it into steel
wage for steel workers to turn it into a drilling rig
fuel and electricity to mill, make, and construct the platform

That said, if inflation kept up with the oil price rise then the real price of oil has not changed; whatever was true before is true now.

Finally, I was responding to the sentence I quoted, which made no mention of either inflation or financial distress.

[Oil-Finder]

If anyone wants to read a nice analysis of the potential profitability of a super-duper expensive offshore oil field, click on the link here:
--> Petrobras' Tupi Discovery Will Likely Be Profitable <--

Petrobras themselves have reiterated that guy's position:
--> Brazilian oil company says new reserves economically viable <--

[RdSnt]

In 2005, Thunderhorse had already cost BP 5billion. That was before launch and before the hurricane damage.
Also keep in mind that the field it is parked over hasn't produced anything yet.
Thunderhorse is designed to pump 250,000b/d max.

You missed the lifting costs LoneSnark. If Northsea lift costs are $15/barrel then you can bet Thunderhorse will be twice that at least.
You also missed the landing costs. There's no pipeline to the rig, the crude will need to be stored and loaded on tankers.

Finally, I made the typical mistake of just talking about $ when that isn't what we should ever be talking about when assessing these types of ventures. All these projects need to be assessed using emergy audits and EROEI.

[LoneSnark]

So what? Off shore oil drilling is rediculously expensive; that is not in dispute. What is disputed was the assertion that higher oil prices, all else equal, would somehow turn a profitable off-shore investment into an un-profitable one.

To be blunt, if we accept your numbers as gospel ($15 lift costs, $5 billion up-front, 250,000b/d, add in $100/barrel) then the rig will pay for itself in just under 8 months, everything after that is profit. If they spend another $5 billion on landing costs then it will take 16 months to pay for itself. Do you see where this is going? There is no way for a profitable oil well to become unprofitable just by higher oil prices. Worse case scenario the only costs in oil production is oil, in which case costs would increase in-line with revenues. There is just no way for costs to increase faster than revenues are increasing.

$this->bbcode_second_pass_quote('', 'F')inally, I made the typical mistake of just talking about $ when that isn't what we should ever be talking about when assessing these types of ventures. All these projects need to be assessed using emergy audits and EROEI.

[Graeme]

Offshore EOR Crucial to Sustaining Future Oil Supply

$this->bbcode_second_pass_quote('', 'A') major campaign of enhanced oil recovery (EOR) in offshore fields will be crucial for sustaining the world's future oil supply, according to renowned petroleum consultant Dr. Rafael Sandrea.

Sandrea, president of Tulsa, Okla.-based IPC Petroleum Consultants Inc., is the author of a groundbreaking, provocative new multiclient study to be published in May by the Oil & Gas Journal Research Center.

The global offshore oil and gas sector's production performance the past two decades has been "remarkable," noted Sandrea, adding that offshore fields now account for about a third of world oil and gas production, expressed in oil-equivalent terms.

But offshore's potential is even greater, he said, given the vast remaining discovered resources.

"Globally, a total of 500 billion barrels [bbl] of offshore oil has been discovered, of which 200 billion bbl has already been produced," Sandrea said. "The ultimate recoverable reserves for the global offshore could be near 850 billion bbl."

Offshore oil production will continue to grow strongly in the medium term and is expected to reach 35 million barrels per day (b/d) by 2015, up from 24 million b/d in 2005, he estimated.

The disparity in discovered vs. produced reserves is even greater for offshore natural gas, Sandrea said: "In regard to offshore natural gas reserves, more has been discovered (580 billion bbl of oil equivalent) than oil, and barely one-sixth has been produced."

EOR potential

Dr. Sandrea estimates in his study that the total volume of discovered, conventional original-oil-in-place (OOIP) resource worldwide is nearly 11 trillion bbl; this number excludes the vast heavy oil and oil sands regions of Venezuela and Canada. Today the average worldwide recovery factor in oil fields is only 22 percent of OOIP.

He contends that an effort to increase that recovery factor by a single percentage point would add more than 100 billion bbl of oil to the world's reserves -- enough to replace almost four years of global oil production. In fact, Sandrea asserted, " ... 70 percent is a tenable level of recovery."