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Page added on June 23, 2018
Oil Executive: Industry Needs ‘Another Iraq Or North Sea’ To Meet Demand Growth
The global oil industry needs to find “another Iraq or North Sea every year” to plug the shortfall of oil supply as demand continues to grow, Majid Jafar, the chief executive of the UAE-based Crescent Petroleum, told CNBC on Thursday.
According to the oil executive, the industry continues to see underinvestment as spending on exploration and new projects has not recovered enough from the recent downturn.
“The big message here has been the industry is not investing enough. Investment is down 50 percent from where it was three or four years ago and hasn’t really recovered,” Jafar told CNBC on the sidelines of an OPEC conference attended by many oil industry executives.
“Actually, what we have seen in this meeting is we need to add another Iraq or North Sea every year and it is not clear where it is coming from,” Crescent Petroleum’s chief executive noted.
Currently, the global oil industry has an image problem, with the majority of the public thinking that it’s a dying industry and “not important anymore,” Jafar said, but added that oil and gas still meets 60 percent of global energy output, compared to the 3-percent share met by renewables.
Earlier this month, BP’s Group Chief Financial Officer, Brian Gilvary, said that “We’re not seeing under-investment coming through yet.”
In March, Saudi Aramco’s president and chief executive Amin Nasser warned that the industry would need to invest more in exploration, after record-low discoveries last year.
According to Nasser, the industry—which has already lost US$1 trillion in investments during the downturn—needs more than US$20 trillion over the next 25 years to meet rising demand for oil and gas.
More recently, higher oil prices and lowered development and project costs have led to cautious optimism and measured risk-taking within the industry that is set to see an uptick in global oil investment this year, energy consultants Wood Mackenzie say.
By Tsvetana Paraskova for Oilprice.com
290 Comments on "Oil Executive: Industry Needs ‘Another Iraq Or North Sea’ To Meet Demand Growth"
rockman on Sat, 23rd Jun 2018 12:24 pm
The industry is spending exactly what it should be spending…plus a little bit more. We spend what the economics of what’s left to drill for that is justified. That little bit more is what is spent by unscrupulous promoters who raise capex from unsophisticated investors. Those direct investments just a tiny fraction of what the industry spends. Probably less then 1% of the total. And with very little success. And the promoters still make money drilling dry holes. Have explained that before so won’t bother again.
What’s left that justifies drilling is a function of the oil/NG price. But at any price point there’s only so many wells left to drill. Spending more capex then that amount won’t generate more new reserves.
Anonymous on Sat, 23rd Jun 2018 12:40 pm
Once those pipes out of the Permian get built, STFB.
Everybody thought Scott Sheffield (Permian COB, formerly CEO) was high when he said a couple years ago that Permian would grow to be 5-10 MM bopd. Now that it has grown from 1 to 3+, that doesn’t seem so crazy any more!
5 will be easy, once the pipes get built (early 2020s). Lots of mainstream analysts are now talking about 8 MM by late 2020s.
Permian is already equal to North Sea (or the Iraq from a couple years ago). It can double in size also.
Anonymous on Sat, 23rd Jun 2018 12:43 pm
All of this assumes price cooperates. They need $50+ for strong growth.
If demand drops off (or supply grows too fast), we will have another price drop. Situation normal, though. Always been like that. Peakers like Matt Simmons and James Hamilton with their endless $100+ expectations were wrong, wrong, wrongitty, wrong, wrong.
Massbytes on Sat, 23rd Jun 2018 4:28 pm
We have seen $100 dollar oil and more than likely will see it again. Even if the Permian produces 5-10mm per day, there are other oil supply problems in the world that will deduct from supply. Should be interesting.
twocats on Sat, 23rd Jun 2018 9:54 pm
we can’t act that this industry is sane and logical in terms of its investments when its been as psychopathic in its need for deception regarding the needs of society to transition away from FF. can’t have it both ways. we can’t be in the grip of PO dynamic and in the death throws of civilization as we know it and also be like, ‘they are spending the exact computer-generated amount of capital necessary’ like they were some perfectly honed AI in a minecraft world.
and second – this blathering about the genius of the permian while at the same time saying – oh yeah oil needs to be above $50. crazy is exactly what this is sounding like.
not normal, not normal at all. all the kray.
Anonymouse1 on Sat, 23rd Jun 2018 11:14 pm
IoW, the uS desperately needs more Iraq’s to plunder. However most of the remaining ‘Iraq’s, are too strong for the uS to conquer directly. This fat, this reality is causing considerable consternation in the boardrooms of corporate amerika and the pentagon. While the rewards of stealing of other peoples resources are, and have been great, the risks have increased now as well. The uS has plundered most of the low-hanging Iraq’s, I mean fruit, and most of the remaining fruit, that is to say Russia, wont picked, or steam-rolled as easily as Iraq was.
Wont stop the amerikans from trying of course, but this mad drive on the uS’s part to control the worlds remaining oil will either lead to the uS’s eventual destruction, or possibly, the worlds.
Lets us hope it is the former, rather than the latter.
Boat on Sat, 23rd Jun 2018 11:35 pm
Lol,
Listen to this peckerhead do N Korea style propagsnda. amouse wants to play braindead politics like some kind of dictator. What a trip.
Boat on Sat, 23rd Jun 2018 11:45 pm
Two cats
US oil is not a company.Foreign investors play in the market as well. And PS, they are in the business of oil, not saving lives or the climate you nieve foreigner. Why do you care what price oil is. You Damm sure benefit from it.
GregT on Sun, 24th Jun 2018 12:46 am
“amouse wants to play braindead politics like some kind of dictator. What a trip.”
Take a trip and never leave the big screen TV.
Definitely opioids.
MythBuster on Sun, 24th Jun 2018 1:33 am
I’m guessing oil company geologists have detailed global maps of where all the untapped oil is “hiding”. Every nook and cranny of planet earth has been scrutinized many times over for any hint of oil, maps and data dutifully recorded. Geologists have this info. If what Majid Jafar says is true, that the world needs another Iraq or North Sea every year to meet growing demand, then it seems we’re out of luck. There are no more Iraq or North Sea oil fields to be found. They’re one of a kind! $20 trillion newly created USD digi-bucks pumped into exploration over the next 25 years isn’t going to find much more oil. The exploring has already been done, there isn’t anything left worth investing in, otherwise they’d already be doing it.
Cloggie on Sun, 24th Jun 2018 4:25 am
Haha, Europe has very different plans with the North Sea and it ain’t smelly oil, but a fresh breeze instead.
“Britain Rules the Waves of Offshore Wind”
https://deepresource.wordpress.com/2018/06/24/britain-rules-the-waves-of-offshore-wind/
Antius may have mixed feelings about this development, but Britain is rapidly becoming a major renewable energy nation.
For me personally it is a drama as the Netherlands, like with the Winter Olympics medal table or agricultural exports, is again not able to beat the US, now in the field of offshore wind.
Anonymous on Sun, 24th Jun 2018 6:41 am
More examples why Pratt was prescient with his “oil is found in the minds of men”.
This quote is the concluding paragraph of a history of the Bakken (written in 2010):
“Probably the most compelling evidence as to how changing exploration strategies and technologies are altering our perceptions
of the oil and gas potential of the Williston Basin is found by comparing the technically recoverable reserves estimated by the North Dakota Department of Mineral Resources (DMR) in 2005 with those in the 2008 assessment (Bohrer et al.). In 2005, the DMR estimated that just under 14 million barrels of oil were recoverable from the Bakken with the technology of that time. Three years later, changing technology places the reserves at 2.089 billion barrels of recoverable oil. Even though the Bakken itself has not changed, our ability to extract oil from it has, so that as
technology advances our ideas concerning the future possibilities of this resource must as well.”
https://www.dmr.nd.gov/ndgs/documents/newsletter/nl2010/ABriefHistoryofOilProductionfromtheBakkenFormationintheWillistonBasin.pdf
twocats on Sun, 24th Jun 2018 8:06 am
a lot of shit is in the minds of men.
including hypocrisy of at one point claiming that this industry is somehow a perfect organism of efficiency and at the same time whining about needing more investment for pipelines or that externalized costs like the destruction of the planet are just “get over it” complaints. sorry boat and nony, we need to melt down your useless body to produce some oil, “get over it”
but the realities remain,
“North Dakota had the highest rate increase at 57.6 percent, but the report found that the rate increased more than 30 percent in 25 states, including South Dakota, Montana, Wyoming, and Kansas.”
https://abcnews.go.com/Politics/cdc-report-finds-rise-suicide-rates-states/story?id=55719214
granted not all of this is peak oil related – we should also be locking up the sackler family and associates.
twocats on Sun, 24th Jun 2018 8:08 am
mouse1 – well played sir
joe on Sun, 24th Jun 2018 8:28 am
Tight oil does not need a high oil price to get drilled/mined it needs cheap capital to justify the initial outlay. They know they also need heavy oil to mix it with and that’s either from Venezuela or Canada. Both of those countries NEED high prices. Got it, (tight oil likey cheap money, heavy oil likey big price = gas for your car…..)
Anonymous on Sun, 24th Jun 2018 8:10 pm
2005, the prediction was 14 MM BO from the Bakken EVER in the future. It puts out that much every two weeks.
Brent Georgeson on Sun, 24th Jun 2018 8:29 pm
How much oil with how much debt is the question. Yes more oil is out there but what are people willing to pay and how much debt are we gong to go into to get it? World debt is already slowing down the economy.
https://www.cnbc.com/2018/06/05/howard-schultz-21-trillion-debt-is-biggest-threat-to-us-domestically.html
MASTERMIND on Sun, 24th Jun 2018 8:36 pm
Clogg
Wind can’t produce oil you moron..LMFAO!
MASTERMIND on Sun, 24th Jun 2018 8:37 pm
Oil discoveries in 2017 hit all-time low –Houston Chronicle
https://www.chron.com/business/energy/article/Oil-discoveries-in-2017-hit-all-time-low-12447212.php
Another Iraq or North Sea?
Is this real life?
MASTERMIND on Sun, 24th Jun 2018 8:45 pm
Annoymouse
North Dakota Department of Mineral Resources Director “We could have worldwide oil crisis by 2021”
http://www.kfyrtv.com/content/news/Latest-oil-production-numbers-reveal-modest-drop-also-presents-potential-worldwide-oil-crisis-476721983.html
Chevron CEO warns US shale oil alone cannot meet the world’s growing demand for crude
https://www.cnbc.com/2017/05/01/us-shale-cannot-meet-the-worlds-growing-oil-demand-chevron-ceo-warns.html
Imminent peak oil could burst US, global economic bubble – study
https://www.theguardian.com/environment/earth-insight/2013/nov/19/peak-oil-economicgrowth
Are We Sleepwalking Into The Next Oil Crisis?
https://oilprice.com/Energy/Energy-General/Are-We-Sleepwalking-Into-The-Next-Oil-Crisis.html
Humans are whistling through the graveyard..
Makati1 on Sun, 24th Jun 2018 8:56 pm
No, MM, some humans whistling, but not all. Who will be hurt the most by less oil at higher prices? The 3rd world? Some 2-3 billion of us at the bottom? Or the billion at the top, America, the EU, Australia and Japan?
My neighbors here will hardly notice. That is likely true of many billions in the world today. And the decline is likely to be slow and painful for those who waste the most. The Us in particular. Buckle up!
MASTERMIND on Sun, 24th Jun 2018 8:57 pm
Just a few years till this
THE OLDUVAI THEORY AND CATASTROPHIC CONSEQUENCES
http://www.resilience.org/stories/2008-06-24/olduvai-theory-and-catastrophic-consequences/
And once the lights go out that is the end of industrial civilization..And we go back to stone ages in a flash..
Cloggie on Sun, 24th Jun 2018 8:58 pm
https://deepresource.wordpress.com/2018/06/18/the-state-of-solar/
https://deepresource.wordpress.com/2018/06/23/renewables-2017-global-status-report/ren21-windshare/
https://deepresource.wordpress.com/2018/06/24/britain-rules-the-waves-of-offshore-wind/
https://deepresource.wordpress.com/2018/06/24/airborn-solar-panels/
https://deepresource.wordpress.com/2018/06/24/noor-worlds-largest-solar-power-plant-in-morocco/
“Clogg
Wind can’t produce oil you moron..LMFAO!”
https://youtu.be/rUZi67BmY_M
GregT on Sun, 24th Jun 2018 9:04 pm
“No, MM, some humans whistling, but not all. Who will be hurt the most by less oil at higher prices? The 3rd world? Some 2-3 billion of us at the bottom? Or the billion at the top, America, the EU, Australia and Japan?”
Don’t forget Canada Makati1. Canada consumes more energy per capita than even the U.S. does.
MASTERMIND on Sun, 24th Jun 2018 9:06 pm
Clog
Solar and wind can’t create oil you dumb shit..They are used for electricity..and oil is used in general for transportation..Oil is what powers globalism, trucks, ships, planes..
How many fucking times do i have to explain this shit to you?
MASTERMIND on Sun, 24th Jun 2018 9:13 pm
We only need to find another Iraq every single year..Good luck with that..
Maybe Aliens will land on earth and teach the frackers how to beam oil up for pennies?
MASTERMIND on Sun, 24th Jun 2018 9:20 pm
Hey remember how Davy was bragging about Trump’s tariffs today? Here is the proof of how dumb he really is..
Southeast Missouri nail company gets hammered by Trump’s tariffs
https://www.missourinet.com/2018/06/22/southeast-missouri-nail-company-gets-hammered-by-trumps-tariffs/
This just proves how dumb people on the right like Davy are..They always vote against their own self interest..They just have to vote for the right because of the paranoid religious ideology..
MASTERMIND on Sun, 24th Jun 2018 9:32 pm
Now we know why they lied about WMD’s to go to war with Iraq..They were scared we were going to run out of oil..And they colluded with the Saudi’s to create 911 and the war on terror..And they said it was a guy living in a cave in Afghanistan who was behind the attack..LOL you can’t make this stuff up..
And for the record you can’t win a war on terror because terror is a tactic, not an enemy..Its a verb not a noun..
MASTERMIND on Sun, 24th Jun 2018 9:39 pm
RIP 7 Billion
Makati1 on Sun, 24th Jun 2018 9:49 pm
True Greg, but I seem to lump Canada with the Us these days. But, I would bet that more Canadians are able to adjust then Us citizens.
GregT on Sun, 24th Jun 2018 9:51 pm
“And they said it was a guy living in a cave in Afghanistan who was behind the attack..LOL you can’t make this stuff up..”
Actually MM, I believe what they said was; ‘An intricate network of caves’, and OBL was the mastermind behind the attack.
In reality, OBL was against the ‘House of Saud’, the supposed fanciers of 9/11.
GregT on Sun, 24th Jun 2018 9:53 pm
Financiers.
GregT on Sun, 24th Jun 2018 10:01 pm
“True Greg, but I seem to lump Canada with the Us these days.”
Canada is being controlled by the same element as the U.S. is Makati. Canada would be like USA lite.
GregT on Sun, 24th Jun 2018 10:02 pm
How do they put it again?
Less calories, tastes better?
MASTERMIND on Sun, 24th Jun 2018 10:16 pm
Some men aren’t looking for anything logical, like money. They can’t be bought, bullied, reasoned, or negotiated with. Some men just want to watch the world burn..
Michael Caine
The Dark Knight
MASTERMIND on Sun, 24th Jun 2018 10:20 pm
Message to the 1%
There’s a storm coming..
https://www.youtube.com/watch?v=q3CLc0IGstk
GregT on Sun, 24th Jun 2018 10:21 pm
The world is burning MM, because of greed, not because of intelligence.
MASTERMIND on Sun, 24th Jun 2018 11:47 pm
Greg
Shh…clogg don’t like that..
Cloggie on Mon, 25th Jun 2018 12:01 am
Now we know why they lied about WMD’s to go to war with Iraq..They were scared we were going to run out of oil..And they colluded with the Saudi’s to create 911 and the war on terror..And they said it was a guy living in a cave in Afghanistan who was behind the attack..LOL you can’t make this stuff up..
Liar. It was your tribe that did it.
Irrefutable proof: WTC7 collapsed into its own footprint with the speed of gravity > WTC7 was controlled demolition > you cannot wire a building for demolition without the owner knowing about it > owner (((Larry Silverstein))) > Israel did it.
Cloggie on Mon, 25th Jun 2018 12:11 am
Clog
Solar and wind can’t create oil you dumb shit..They are used for electricity..and oil is used in general for transportation..Oil is what powers globalism, trucks, ships, planes..
How many fucking times do i have to explain this shit to you?
A kWh is a kWh
https://www.youtube.com/watch?v=t8kZ7XX0-ms
https://deepresource.wordpress.com/2018/05/08/e-road-e-vehicles-breakthrough-in-sweden/
Everything that runs on oil can run on hydrogen or NH3.
https://deepresource.wordpress.com/2017/08/09/first-climate-neutral-power-station-in-the-netherlands/
Already have an open end ticket to Israel in your drawer, millimind?
MASTERMIND on Mon, 25th Jun 2018 12:14 am
Clogg
Whats more likely?
Building seven was secretly rigged throughout the entire building with explosives and nobody ever saw them or the devices?
Or
The building caught on fire and was cheaply made and collapsed?
MASTERMIND on Mon, 25th Jun 2018 12:16 am
Clogg
Don’t worry you will die from conflict or starvation soon..And you will remember MM when shit hits the fan..
MASTERMIND on Mon, 25th Jun 2018 12:45 am
Clog
UC Davis Peer Reviewed Study: It Will Take 131 Years to Replace Oil with Alternatives
(Malyshkina, 2010)
http://pubs.acs.org/doi/abs/10.1021/es100730q
University of Chicago Peer Reviewed Study: predicts world economy unlikely to stop relying on fossil fuels (Covert, 2016)
https://www.aeaweb.org/articles?id=10.1257/jep.30.1.117
I blinded you with science!
LMFAO!
GregT on Mon, 25th Jun 2018 1:48 am
“Building seven was secretly rigged throughout the entire building with explosives and nobody ever saw them or the devices?
Or
The building caught on fire and was cheaply made and collapsed?”
Considering the fact that no steel reinforced concrete high-rise building has ever collapsed due to fire before 9/11, or after, kind of points to answer #1 as being more likely correct MM.
“The building caught on fire and was cheaply made and collapsed?”
Now that would be totally ridiculous.
Makati1 on Mon, 25th Jun 2018 3:51 am
Both towers were also pre-rigged to cause a controlled demolition. Obvious when I watched it happen on TV in the conference room of the construction company I worked for then, along with the whole office staff.
Thermite was obviously mixed with the paint recently applied to the columns. Not noticeable until set off.
https://en.wikipedia.org/wiki/Thermite
I just laughed when they claimed two airplanes did it. Americans are so gullible!
Cloggie on Mon, 25th Jun 2018 4:03 am
“Building seven was secretly rigged throughout the entire building with explosives and nobody ever saw them or the devices”
WTC7 wasn’t rigged throughout the entire building, only the carrying columns in the basement.
Davy on Mon, 25th Jun 2018 4:33 am
“The world is burning MM, because of greed, not because of intelligence.”
The world is burning because of the lack of wisdom which is the determination of the proper intelligence to pursue. Our intelligence today consists of the attainment of more technological potential instead of sustainability and resilience. We have mistaken the two and consider more technology as what is needed to be more sustainable and resilient. What has resulted is the unsustainable. We are now near boundaries of failure across a broad spectrum of existential variables. Technology has allowed an order of magnitude more people many of who can consume vastly more. It has resulted in an extinction process. Technology as cause climate to disrupt. Greed is a constant with human nature. It is the type of wisdom and the nature of the intelligence that has changed. This has allowed the natural human trait of greed to be put on steroids.
Davy on Mon, 25th Jun 2018 4:40 am
“Irrefutable proof: WTC7 collapsed into its own footprint with the speed of gravity > WTC7 was controlled demolition > you cannot wire a building for demolition without the owner knowing about it > owner (((Larry Silverstein))) > Israel did it.”
One flaw in your speculation is how did the “conspiracy of owners” know the twin towers were going to collapse? Maybe the twin towers might have just burned leaving an exoskeleton of charged material near the top. Then what would the “conspiracy of owners” have done? Would they have blown up the building anyway with the other building standing? It is not like there has ever been an experiment with running a jumbo into a tall building to know they would collapse.
Davy on Mon, 25th Jun 2018 4:43 am
“A kWh is a kWh”
And that is where it ends. Once a kWh is introduced into an economy and civilization it is then about the economics and physics of it in relation to that economy and civilization.
Davy on Mon, 25th Jun 2018 4:49 am
“Both towers were also pre-rigged to cause a controlled demolition….Thermite was obviously mixed with the paint recently applied to the columns. Not noticeable until set off.”
LOL, obviously??? Please thermite paint applied to columns?? Do you have any evidence of contractors applying paint to columns. That would be something on record because you just don’t pain columns and hide it. Who is the gullible one?