[ROCKMAN]

Starvid,

This where I think the IEA gets us turned inside out. They say decline is so much without investments and by so much if they get the investments. I do not believe the IEA has a data base which allows them to see the production potential of those projects. I suspect they are making some broad statistical assignment of this potential based upon some historical model. But that's just a wild guess.

That's why I think it's critical for us to collective evaluate their methodology in details before we debate the merit of any numbers we see. Like you, I anxiously await to see some meat on this bone they’ve tossed out.

[Starvid]

Maybe you should take a look at Robelius thesis? If I recall correctly the university payed $$$ to get access to top-notch IHS data, which they then published in the thesis for all to see.

Which might be why that thesis within a few months became the second most downloaded .pdf ever from the Uppsala university webpage.

[ROCKMAN]

I saw it many months ago Stavid....in fact you might have pointed it out to me. A very impressive piece of work as I recall. Probably the most technically sound work I've seen on the subject. I'll be very impressed if the IEA took comparable efforts. But, as you know I do this sort of work for a living, and understand the difficulty with getting sufficient data to make an accurate assessment. And even when you do have the data the answers are still difficult to solve.

As I vaguely recall, Fredrik did a fine job of describing his methodology. If the IEA does likewise it will make their assessment much more credible IMO.

[CrudeAwakening]

$this->bbcode_second_pass_quote('ROCKMAN', '
') Even if they are analyzing actual decline rates in the major fields this number should also be taken with a grain of salt. Mega fields, like Ghawar, are water-drive reservoirs. Ghawar’s current decline (truly known only by the KSA) will eventually take a sharp downward turn. Though the existing water-injection program had greatly aided in maintaining high production rates, there is a serious downside: when the water levels eventually reach the majority of the perforations in the wells the decline rate could jump to 15% to 20% in a year or two. Though a different drive mechanism this is why Cantrell is experiencing 30%+ decline rates lately. The injected N2 gas cap used to maintain high production rates has now reached the perfs in many wells. Both situations essentially amount to tipping points in each fields decline rates. Cantrell has reached it. Only the KSA has any idea when Ghawar will hit its tipping point. But it isn’t a matter of if it will…but when: 2 year…5 years…maybe next year. The same is true for all other water-drive mega field reservoirs.

[ROCKMAN]

Crude,

I obviously can't answer for the IEA but if they have assumed the current decline rate at Ghawar today is constant then the field must have already begun a steep decline. And I doubt the KSA has made that admission. But a more important point regarding your statement about the enhanced recovery methods used in the field: such methods can allow high flow rates and increase ultimate recovery. But they do not prevent the field from watering out. If anything, such water injection programs lead to even more rapid decline rates when the water level rises to the level of the perforations in the majority of the wells.

If you haven't studied the details of secondary recovery my statement might be confusing. The water is injected below the oil-water contact. This allows a much more efficient movement of the water upward as it pushes the oil towards the producing wells. But there is no force on heaven or earth that can stop the water level from reaching those wells when the majority of the reserves are produced. If you’re not too familiar with reservoir engineering I’ll off a simplistic but valid model: imagine a tube half filled with water on the bottom and half filled with oil on the top. A hose connected to the bottom of the tube pumps water in causing the oil to overflow the top. The oil flows at a constant rate and is 100% oil. But eventually the oil-water interface reaches the top of the tube. At that time the flow changes from 100% oil to 100% water very quickly. This is a simple model but the drive mechanics are exactly the same as for the Ghawar reservoirs. This is especially dramatic in high quality reservoirs such as at Ghawar. This fact is cannot be debated: one day Ghawar will begin a very rapid decline rate. The only way to estimate that date is by a complex reservoir model for which only the KSA has the necessary info.

As I mentioned earlier, we have to look closely at the IEA methodology. If they have assumed Ghawar will have a constant decline rate until 2030 then there must be much more oil in the reservoir then even the KSA claims (I think).

[CrudeAwakening]

Thanks Rockman

I guess we'll just have to wait until the report is released before we can analyse the nitty-gritty. And, as usual, the results will be clouded with uncertainty as to the true state of Saudi fields.

[ROCKMAN]

Yes Crude...as that worn out phrase goes: the devil is in the details.

But Cantarell Fld is a good example of how quickly a good situation can turn very bad. Three or four years ago a lot of folks would have said you were crazy if you had predicted the decline rates we’ve seen in the last year. But the dynamics are the same as Ghawar except upside down. The N2 is injected into the top of the reservoir at Cantarell and pushes the oil DOWN towards the perforations. This allowed a high flow rate and greatly increased the ultimate recovered volume. But just as with the rising water at Ghawar, the N2 gas cap eventually moves down to the perforations and the rapid decline rate begins. Thanks to the N2 injection the field might recover several times as much oil as it would have otherwise. But it doesn’t change the nature of the late-life rapid depletion phase…just as we’re seeing today. Last numbers from PEMEX show an almost 40% decline rate.

[erb]

$this->bbcode_second_pass_quote('Jotapay', 'T')hat rate of decline is terribad.

[seahorse2]

Rockman, I know any guess as to when Ghawar might go into decline is only a guess, but what is your guess. Specifically, when would you guess the that, like Cantarell, a decline in Ghawar would become so obvious that it could not be hidden?

[Starvid]

ROCKMAN,

Would you as a professional say that water/gas injection will generally

a) increase URR

b) decrease URR

c) not affect URR

d) different depending on the reservoir (how?)

e) depends on if the people doing the injection screw up or not

f) none of the above

g) all of the above

h) a combination of the ones above (what combination?)

[Carlhole]

The Coming IEA Report
$this->bbcode_second_pass_quote('', '.').. The world is not running short of oil or gas just yet.
The world’s total endowment of oil is large enough to support the projected rise in production beyond 2030 in the Reference Scenario. Estimates of remaining proven reserves of oil and NGLs range from about 1.2 to 1.3 trillion barrels (including about 0.2 trillion barrels of non-conventional oil). They have almost doubled since 1980. This is enough to supply the world with oil for over 40 years at current rates of consumption.Though most of the increase in reserves has come from revisions made in the 1980s in OPEC countries rather than from new discoveries, modest increases have continued since 1990, despite rising consumption. The volume of oil discovered each year on average has been higher since 2000 than in the 1990s, thanks to increased exploration activity and improvements in technology, though production continues to outstrip discoveries (despite some big recent finds, such as in deepwater offshore Brazil).

[Leanan]

If you read the whole report, it's clear that there was disagreement among the authors. Some are pretty doomerish, others are not.

The part predicting a 6F rise in temperature is pretty darn doomerish. Good-bye, Netherlands. And New Orleans. And probably most of the US coastal cities.

[copious.abundance]

$this->bbcode_second_pass_quote('', 'T')he volume of oil discovered each year on average has been higher since 2000 than in the 1990s

[AirlinePilot]

I guess Oilfinder is once again Cherry picking data to support a point thats meaningless when taken into the context of the longer term picture of discovery history.
This is the graph everyone should be paying attention to.
Chart (large)

Converted Url to hyperlink.-FL

[Rogozhin]

$this->bbcode_second_pass_quote('AirlinePilot', 'I') guess Oilfinder is once again Cherry picking data to support a point thats meaningless when taken into the context of the longer term picture of discovery history.
This is the graph everyone should be paying attention to.
See chart Airline's post (large)

[copious.abundance]

$this->bbcode_second_pass_quote('', 'C')an I believe that the primary sources that provided the data for this graph are valid?

[virgincrude]

Mods, should this get merged ... "the era of cheap oil is over"

And this: Heinburg Scoop PO supported by IEA ....... where Rockman has provided probably the most usefull insights?

[TheDude]

$this->bbcode_second_pass_quote('OilFinder2', 'F')or example, when Prudhoe Bay was discovered in '68, they first announced it was a 5-10 billion barrel field. It has since produced something like 11 billion barrels, and is still producing. So, the folks who made that chart bumped up the graph by 1-7 billion barrels for the year 1968.

[TheDude]

On the issue of backdating, here is Colin Campbell's explanation of its usefulness:
$this->bbcode_second_pass_quote('', '1')7. Dating Revisions
· An oilfield contains what it contains because it was filled in the geological past, but knowledge of how much it contains evolves over time.
· If we want a genuine discovery trend, we need to backdate revisions to the discovery of the field.
· Failure to backdate gives the illusion that more is being found than is the case. It is a cause of great misunderstanding
18. BP Reserves
This demonstrates how BP reports reserves, failing to backdate the revisions. It has misled many analysts.

[virgincrude]

Carlhole wrote:
$this->bbcode_second_pass_quote('', 'T')hese guys don't sound like Doomers to me."