The Vicious Competition For Peak Oil

There has been a heated argument for the last several years about when the world will start to run out of oil. The rate of oil production, after more than a century of drilling, may have already peaked or it may peak in a decade. Everything in oil production will be downhill after that. The Observer recently pointed out that,

The more relevant concern, at least in the short-term, about oil should not be how much there is but who will own it. The fight for crude ownership has picked up recently. Two decades from now there may be as much annual supply as there is this year, but the Chinese may have doubled or tripled their share of that market. The obstacle to that happening is that Western oil firms such as Exxon Mobil and BP will get into bidding wars with China-based oil operations for new deposits but that bidding could become extraordinarily expensive.

A month ago, Exxon agreed to buy a stake of one-quarter in the Jubilee field in the ocean off Ghana for $4 billion. China oil company Sinopec and BP came in later bidding for the same ownership. The fight over a deposit which could turn out to be one of the largest in the world is likely to become more heated as the competition moves into next year.

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