[ROCKMAN]

What a timely choice ib. Congrats and good look. Have you been able to get any sort of a credible read on the potential reaction to any OPEC success in become a viable cartel. I wonder if this was a factor in Bourdaire's comment.

[KevO]

oh.

so we're screwed again?

oh well
There is no exit door and THIS is the LAST EVER recession

[TheDude]

ROCK - what do you think of SA's schemes for keeping the water away from the perfs in the first place? Some of their techniques are unique to KSA, aren't they?

In the early days of the site we had a big thread on Saudi Production: Collecting the Data, which you might take an interest in.

[essex]

On top of this there is the projected decline in availability to the market, AKA the export land model. This situation is very serious.

I sold my 1928 vintage Hudson a few weeks ago and now have my truck for sale.

[TheDude]

Some additional quotes from the IEA's Nobuo Tanaka in Oil-Price Rebound Could Be Severe:
$this->bbcode_second_pass_quote('', ' ')LONDON (WALL STREET JOURNAL via Dow Jones Newswires), October 29, 2008
The slump in oil prices has spread relief among consumers and fuel-reliant industries, but also is squeezing the companies who could invest in new sources of oil -- spurring concerns that prices will prompt them to shelve investments.
Industry executives warn that could mean the world will face a dramatic ramping up of prices as soon as the global economy, and demand, begins to rebound.

[ROCKMAN]

Dude -- I don't know the specific details of those water abatement efforts but there are all fairly standard. A lot of the west TX fields are similar to Ghawar. Physical methods, like horizontal well bores, are obvious. There are chemical blockers that can useful to hold water back sometimes. But in the end you can't change the laws of nature. One of the best methods for delaying water encroachment is to reduce the flow rates. The water moves faster then the oil so pulling slower allows more of the oil to stay ahead. I've heard from expats over there that for years the KSA was producing Ghawar wells to fast and thus pulling the water in faster. This really hurts ult recovery.

I don’t know the details of Ghawar very well but I do not it’s not acting as one unified reservoir. From the bits and pieces I’ve seen it’s acting more like several somewhat connected reservoirs. This essentially means that the water will hit different parts of the field at different times and different wells at different times even in the same local area. But it will hit each and every well in time. It won’t just jump to 100% water in any given well. And it might take many years for the water cut to get to 50% or more. So Ghawar will be making a lot of oil for a long time yet. But not anywhere close to the rates we see today. But to maintain whatever max rate possible will still take a big capex to expand the above ground processing facilities. Separating oil from water isn’t so much a difficult process as it is a time consuming effort. You can’t produce the field any faster than you can separate the oil from the water.

The most simplistic way to visualize how a water drive reservoir can drastically change the net oil volume rather quickly is to just imagine a bath tub half full of oil sitting on top of water. Start pumping water up the drain hole and you have a water drive oil reservoir. As you pump the oil flows over the sides of the tub. And this process continues producing 100% oil at as constant rate as long as you keep the water pump constant. So things click along nicely with no hint of water production on the way. But as most of the oil is spilled out the water reaches the lowest spots around the rim and…ta da…you start getting a water cut. But suddenly the water gets to the rim all around the tub and before you know it…100% water. But rocks are not bath tubs. But the concept is the same: water drive reservoirs are great producers…until the water hits the perfs in a well. We should all be very thankful that the Ghawar reservoir is a very solid carbonate rock. If it were a soft sandstone rock like many in the Gulf Coast the water production would also lead to sand being produced with the oil and water. This really hurts flow rate and ult recovery.

I wish I didn’t have to generalize about Ghawar but even if we had all the detailed data the KSA has on the field it still wouldn’t be that easy to predict how quickly the oil rate will drop. But we do know it will drop and when it starts it cannot but help to have a very dramatic effect of the global market. Ghawar is just too big a piece of the puzzle.

[Starvid]

$this->bbcode_second_pass_quote('Sys1', 'L')ahere spoke only about oil production. His conclusion was that a depression would eventually occured in the coming years and we would have later to shift to... nuclear energy.

[Starvid]

$this->bbcode_second_pass_quote('lb262', 'I')'m doing my degree's thesis on Peak Oil and its impact on International Relations (University of Exeter), and last summer I interviewed the French geophysicist Jean-Marie Bourdaire (former Director of Long-Term Cooperation and Policy Analysis -LTO- Office at the IEA, responsible for publishing World Energy Outlook reports).

[Starvid]

$this->bbcode_second_pass_quote('ROCKMAN', '[')Petroleum Geology essay]
If you haven’t slipped into a coma by now you understand depletion mechanics better than 99.9% of all the economists out there. Congratulations!!!

[seahorse2]

Back in May of this year, there was an article on the upcoming November IEA report which said the IEA November report would "sharply" reduce is oil supply forecast. Here is the previous article:
$this->bbcode_second_pass_quote('', 'S')AN FRANCISCO (MarketWatch) -- The Paris-based International Energy Agency is getting ready to issue a sharp downward revision of its oil-supply forecast, according to a published report.
A story in the online edition of the Wall Street Journal early Thursday reported IEA's forecast revision signals growing pessimism about whether oil companies can keep abreast of booming demand.

The Journal reported the IEA is attempting to assess the condition of the world's top 400 oil fields. Its findings won't be released until November, but it is clear that future crude supplies could be far tighter than previously thought, the report notes.
The IEA has predicted previously that supplies of crude and other liquid fuels will keep pace with rising demand, topping 116 million barrels a day by 2030, up from around 87 million barrels a day currently, according to the report, which added that the agency now is concerned that aging oil fields and diminished investment mean that companies could struggle to surpass 100 million barrels a day over the next two decades.

The decision to rigorously survey supply reflects an increasing fear within the agency and elsewhere that oil-producing regions aren't on track to meet future needs, according to the Journal.
The report quotes Fatih Birol, the IEA's chief economist and the leader of the study, as saying "the oil investments required may be much, much higher than what people assume. This is a dangerous situation."

The IEA, employing a team of 25 analysts, is trying to assess the health of major fields scattered from Venezuela and Mexico to Saudi Arabia, Kuwait and Iraq, the Journal reported. The fields supply over two-thirds of daily world production. End of Story

[shortonoil]

seahorse2
$this->bbcode_second_pass_quote('', 'T')he report quotes Fatih Birol, the IEA's chief economist and the leader of the study, as saying "the oil investments required may be much, much higher than what people assume. This is a dangerous situation."

[RapaNui]

A month before he apparently stopped posting, this guy/woman seemed to anticipate the new numbers pretty dead on:

$this->bbcode_second_pass_quote('Cashmere', 'U')m. What? Disconnected from reality? Why would you say that? It's entirely based on reality:
Mexico - 14% decline or more.
North Sea - about 14% or more.
Most newer fields, when they decline, decline at very high rates.

Saudi Arabia - large fields likely to go into very steep decline (or are already there) because of mismanagment, overproduction, water injection. 8% is my conservative estimate. My best estimate is above 10%. I think now, rather than later, because of all of the data available.

Oil 5x the price it was in '01, yet producers aren't producing more? The only reasonable explanation for that is . . . inability.

We used 10% of all URRs in GWB's first term. We used 10% of all URRs in GWB's second term. 8% is a conservative estimate for decline once we start declining. We are about to see the ball fall off the table that's it's been rolling on for some time. It'll be soon.

[FreedomSlave]

Welcome back, Gideon/Cash!

Where's Rocc?

[cynthia]

$this->bbcode_second_pass_quote('FreedomSlave', 'W')elcome back, Gideon/Cash! Where's Rocc?

[cynthia]

Apologies for digressing from this important thread.
Heavy information here that I am still digesting. Looking at these projections it appears I will have to use everything I've learned up until now to move to forward to the next unknown.
Hey, that's what I've been doing all along, so no worries!
Something to see here, gather around.
cynthia

[RapaNui]

You all seem to be missing something critical:
The IEA leak, if it is even later proven accurate (or at least not changed), is not discussing total production - its only talking about existing field production. That's why the numbers increase out to 2030 or whatever. You see? The IEA is neither admitting peak nor admitting that there is going to be a problem. They are not saying that there is going t o be a decline rate of 9%. They are saying that there is going to be a production increase over the next 2 decades, but that it will come from an increase in new fields that counterbalances the decline in old fields. That's all. This is not an admission of Armageddon. This is not an admission of peak. This is not an acknowledgment of a problem in the next few years. You'll notice that no date of first decline has been given. This thread is border line hysterical. It's like a bunch of ghost hunters found a lady who says she saw a shadow and everybody wet themselves before looking to see the cat. The IEA is a controlled body. There is no way they're going to induce mass panic with an announcement that societal collapse is imminent. Sorry to burst the bubble of this thread, bt that's the way it is. Nothing to see here. No holy grail. No confirmation of your reason d'etre. No public announcements that peak has arrived, your rants vindicated, your sleep deeper. Pop.

[ROCKMAN]

In our conversations we should keep clear the two different "production rate" phrases we use. More accurately, we are talking about maximum production rate capability and actual production rate. Let's say the world may currently be capable of producing 95 million bopd but the actual production rate might be 85 million bopd.

Historically the IEA has assumed future production rates would be equal to demand. To the best of my knowledge they've never studied actual production capabilities of the world oil fields. They just assumed production would be increased to meet the demand they've estimated. If I understand correctly, the really big news is that this latest report does include a study of existing fields and their actual estimated decline rates. And this is resulting in the scary predictions.

Bottom line: we need to see the report and learn exactly what the basis is before we can condemn or approve their approach. But here’s a little bit that I know is true: more than 95% of the 400 fields studied by the IEA are in decline by their own admission. And many are in steep decline. Future maximum production capability will be strong influenced by the remaining mega fields like Ghawar and Cantarell. BTW, PEMEX has recently announced that Cantarell’s decline has accelerated past 35%.

[RapaNui]

$this->bbcode_second_pass_quote('Shannymara', 'H')ow likely do we think it is that unconventional will grow that much, and Saudi will increase production that much?

[wisconsin_cur]

$this->bbcode_second_pass_quote('RapaNui', '')$this->bbcode_second_pass_quote('Shannymara', 'H')ow likely do we think it is that unconventional will grow that much, and Saudi will increase production that much?

[GoghGoner]

$this->bbcode_second_pass_quote('RapaNui', '')$this->bbcode_second_pass_quote('Shannymara', 'H')ow likely do we think it is that unconventional will grow that much, and Saudi will increase production that much?