The Alchemist in the Oil Patch

Most of their remaining reserves are difficult to produce, so Vladimir Putin and Hugo Chavez wouldn’t have kicked the big oil companies out if they hadn’t planned on granting major development projects to big service companies like Schlumberger, Baker Hughes, and Halliburton. Yet despite having access to the best oilfield technology in the world, most big projects still suffer from bottlenecks, delays, and cost overruns. This phenomenon is widespread enough that it supports the core ideas behind the Peak Oil theory – most notably that the “easy oil” has already been consumed.
Chris Skrebowski, editor of Petroleum Review, became a leading Peak Oil theory proponent after initially setting out to prove that it was nothing more than worrywarts seeking to make headlines. With decades of international oilfield consulting and research experience, he ran the numbers and concluded that data on both historical production and future projects was not precise enough to assume ample oil supply as far as the eye can see.

Skrebowski draws two conclusions from his latest megaprojects analysis. “First, data on production, project performance, and depletion rates is wholly unsatisfactory, particularly for the OPEC producers. Second, the large volumes of new capacity being added between 2007 and 2012 may not translate into the sort of increased production flows the world economy needs to underpin economic growth.”

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