[DantesPeak]

Lloyd’s List has not one but two articles today about Peak Oil. First, it says we have past peak in light sweet crude (something I have been saying for two years). Second, it says “oil supply shortages are looming as global oil production is pushed to peak levels”, barring some new discovery in the Beaufort Sea.

Well, why we are waiting for those Artic discoveries to come in, let’s see what they had to say:

$this->bbcode_second_pass_quote('', 'L')LOYDS LIST
July 17, 2007
Decline in light oil forces rethink

LIGHT oil production is already in decline, except in the reserve-rich Middle East, forcing consumer nations to utilise unconventional resources such as heavy oil, sour crudes and natural gas liquids.

Geological constraints, although not the only reason, seem to have affected production levels in most of the main basins outside Opec, providing little comfort to those who hope a supply crunch can be averted.

Analysts at Barclays believe that mature basins outside Opec will be the biggest cause of a supply crunch:

'One of the key dynamics of non-Opec supply in recent years has been its ability to massively disappoint,' Barclays says.

'We believe that the main culprit is the dynamics of mature production, and this year it has been most evident in Mexico and Norway.'

Mexico remains a strong oil producer, thanks to its giant Cantarell complex and the new Ku-Maloob-Zaap project, but its own growing domestic demand means exports are shrinking.

In Europe, output is declining, with the North Sea already over its peak. There may be success stories in the UK and Norwegian sectors that could improve production rates for short periods of time, but in general output levels will never reach plateau rates again.

The Russian Arctic is at a similar level of exploration and development, but the industry generally feels most of the hydrocarbon resources will be gaseous. Of the former Soviet Union nations, Kazakhstan and Azerbaijan have the most potential to build production levels.

So we are back in the Middle East for any significant gains in oil supplies. Saudi Arabia is currently the only nation with any proper spare capacity, and this is in the heavy, sour grades of crude that refineries do not want to handle.

Saudi Aramco is investing heavily in its existing onshore and offshore fields, but has not found large new fields for several decades, so even the world's key oil exporter will, one day, be unable to raise its production.

[Nano]

So, does this mean that the assassinations and revolutions are going to start now? It is all taking way much longer than I expected.

[Zardoz]

$this->bbcode_second_pass_quote('', 'M')exico remains a strong oil producer, thanks to its giant Cantarell complex and the new Ku-Maloob-Zaap project, but its own growing domestic demand means exports are shrinking.

[DantesPeak]

Here is more confirmation that we are past peak light sweet crude, this time from Asia. Although this article points to some new Asian fields of light sweet crude now coming on line, overall the new supplies would hardly over come world depletion of LSC this year (and maybe they don’t) - plus it won’t take us back to the LSC peak in 2005.

For those interested in the field production details, a very good article.

$this->bbcode_second_pass_quote('', 'N')ew sweet crudes to put Asia market under pressure

SINGAPORE - Some 120,000 barrels a day of new high-quality, low-sulphur oil will start flowing from Asian fields this quarter, putting strong regional crude differentials under some pressure and boosting light product yields.

"If you look at Asia excluding China, we see a production decline of 50,000 to 70,000 bpd per year for light-sweet crude this year and next," says N.Ravivenkatesh, associate at Houston-based consultancy Purvin and Gertz.

The region's shrinking oil output can be seen from the steady drop in most of Indonesia's fields, the plateau in top producer China and Malaysia's determination to use new offshore fields to offset the 3 percent decline in peninsular production.

China's June oil imports rose 20 percent, year-on year, even as Asia's main fields are declining, and some rather rapidly.

"Even if we said an 180,000 bpd increase by next year, there would be no sustained supply overhang," said Al Troner, managing director of Asia Pacific Energy Consulting (APEC).