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Page added on April 12, 2013
The decline of the world’s major oil fields
With all the talk about new oil discoveries around the world and new techniques for extracting oil in such places as North Dakota and Texas, it would be easy to miss the main action in the oil supply story: Aging giant fields produce more than half of global oil supply and are already declining as group. Research suggests that their annual production decline rates are likely to accelerate.
The most recent research on giant oil fields has been available since 2009 so it doesn’t attract media attention the way new discoveries hyped by oil company public relations departments do. And yet, that research is far more important to understanding our oil future.
Here’s what the authors of “Giant oil field decline rates and their influence on world oil production” concluded:
- The world’s 507 giant oil fields comprise a little over one percent of all oil fields, but produce 60 percent of current world supply (2005). (A giant field is defined as having more than 500 million barrels of ultimately recoverable resources of conventional crude. Heavy oil deposits are not included in the study.)
- “[A] majority of the largest giant fields are over 50 years old, and fewer and fewer new giants have been discovered since the decade of the 1960s.” The top 10 fields with their location and the year production began are: Ghawar (Saudi Arabia) 1951, Burgan (Kuwait) 1945, Safaniya (Saudi Arabia) 1957, Rumaila (Iraq) 1955, Bolivar Coastal (Venezuela) 1917, Samotlor (Russia) 1964, Kirkuk (Iraq) 1934, Berri (Saudi Arabia) 1964, Manifa (Saudi Arabia) 1964, and Shaybah (Saudi Arabia) 1998 (discovered 1968). (This list was taken from Fredrik Robelius’s “Giant Oil Fields -The Highway to Oil.”)
- The 2009 study focused on 331 giant oil fields from a database previously created for the groundbreaking work of Robelius mentioned above. Of those, 261 or 79 percent are considered past their peak and in decline.
- The average annual production decline for those 261 fields has been 6.5 percent. That means, of course, that the number of barrels coming from these fields on average is 6.5 percent less EACH YEAR.
- Now, here’s the key insight from the study. An evaluation of giant fields by date of peak shows that new technologies applied to those fields has kept their production higher for longer only to lead to more rapid declines later. As the world’s giant fields continue to age and more start to decline, we can therefore expect the annual decline in their rate of production to worsen. Land-based and offshore giants that went into decline in the last decade showed annual production declines on average above 10 percent.
- What this means is that it will become progressively more difficult for new discoveries to replace declining production from existing giants. And, though I may sound like a broken record, it is important to remind readers that the world remains on a bumpy production plateau for crude oil including lease condensate (which is the definition of oil), a plateau which began in 2005.
One the clearest cases of the study’s key finding is Mexico’s Cantarell oil field, the second most productive in the world, until a steep decline began in 2004. Production from Cantarell stalled in the early 1990s leading Petroleos Mexicanos (PEMEX), the Mexican national oil company, to begin an aggressive drilling campaign and to build what at the time was the largest nitrogen extraction plant in the world. Once completed, the plant captured nitrogen from the air and injected it into the Cantarell field in order to counter falling pressure.
The result was a dramatic rise in production from about 1 million barrels per day (mbpd) in 1995 to above 2 mbpd in 2003, just two years after the nitrogen injection began. But, by the end of 2005 it was evident that Cantarell was in decline. What followed was a breathtaking slide from 2.136 mbpd in 2004 to just 394,000 barrels per day as of March this year. That’s a total decline of 81 percent in just over eight years.
PEMEX has stabilized total Mexican oil output from all fields at about 2.5 mbpd—it was 3.4 mbpd at Cantarell’s peak—by successfully increasing production from its Ku-Maloob-Zap offshore field. But once again the company is using nitrogen injection to achieve the increase just as it did at Cantarell. And so, PEMEX may be on course to repeat at Ku-Maloob-Zap the rapid decline previously experienced at Cantarell.
Four years on from the 2009 study it is possible that the percentage of world oil production from the giants has slipped as just enough production from new smaller fields has been added to keep global production flat. But if, as the study suggests, the decline rate for giant fields accelerates, the record-breaking expenditures and herculean technical efforts now being undertaken by the oil industry just to keep production flat may be overwhelmed.
Perched on a production plateau, either we are approaching ever closer to a decline in worldwide production of crude oil proper or new developments—that is, ones not yet in evidence—will boost the global rate of production definitively above the current plateau. The weight of the evidence, however, suggests an unfavorable outcome in the decade ahead.
UPDATED 4/9/13: After mysteriously disappearing, the missing PEMEX production report which included the latest production rate from the Cantarell oil field has returned to the company’s website. I’ve now provided a link above.
13 Comments on "The decline of the world’s major oil fields"
Dmyers on Sat, 13th Apr 2013 12:28 am
An honest and accurate treatment of the subject. That decline of the giants is the face of reality coming into focus.
Saudi Arabia uses so-called enhanced recovery techniques, such as those described in the article. It isn’t and can’t be emphasized enough, the acceleration of decline which follows enhanced recovery. As a wise man once said, “Thar ain’t but so much in thar, son.”
Plantagenet on Sat, 13th Apr 2013 12:45 am
US gains from Fracking and the growth in oil production from Iraq are helping to keep world oil production on a plateau.
BillT on Sat, 13th Apr 2013 1:40 am
And the oil companies are spending huge sums to find puddles. Fraking is also a bubble about to burst as prices to frak are going to exceed the ability to sell at a price the consumer can afford.
Any country in the M.E. is subject to constant disruption and maybe an all-out war in the near and far future. The US methodically got rid of the only leaders that could keep them in line because the banksters knew that selling oil for anything but dollars would bankrupt the US and Saddam and Gaddafi both were trying to do so. Ditto for Iran.
Now China and many other countries have joined the ‘dump the dollar’ parade and it is unstoppable. When it succeeds, and it will, the dollar will cease to be the world’s reserve currency and the US will join the 3rd world. It will take the Euro and the Yen down with it.
Arthur on Sat, 13th Apr 2013 9:02 am
Kurt Cobb of the Christian Science Monitor has found a copy of Heinberg’s “The party is over” and decided to write a review about it, without source reference. Better late than never.
Arthur on Sat, 13th Apr 2013 10:34 am
“Now China and many other countries have joined the ‘dump the dollar’ parade and it is unstoppable. When it succeeds, and it will, the dollar will cease to be the world’s reserve currency and the US will join the 3rd world. It will take the Euro and the Yen down with it.”
The US will not join the third world, at least not without a fight. Once larger parts of the Euro-American economic core of the US will understand that the American Era is over, they will start to revolt. The Ron Paul ‘internet-revolution’ was/is essentially a lilly white movement that did not want to be called white. The quip goes that at tea-party gatherings there are more jews and blacks on the stage than in the public. The GOP and tea-party leadership do not YET want to acknowledge that they are essentially a white club, because they do not yet want to give up on the USA or even US empire. But the moment will come (immediately after the impending dollar crash, after which the US will be one big flash mob) when some Euro-American will pull a Milosevic, who will start to defend his people. From that moment on the GOP will morph into the White Party and the landgrab will begin and parts of the US will be warzones like Iraq or Syria. Meanwhile northern states will start to secede and reconfederate, with racial undertones. Just like Yugoslavia/Iraq ended up ethnically (‘racial’) cleansed and segregated, the US will be no different. The result will be that the NWO, brought into life by the great Stalin-Roosevelt coalition, will be dead in the water. Meanwhile 750 million Europeans from Euro-Siberia will observe the spectacle from the sideline and will have great trouble hiding their delight, will send blankets and soothing words of moderation towards north-America and will encourage said northern states to join a white-christian identitarian coalition to contain China. If you do or choose to go isolationist does not really matter as Euro-Siberia can contain China on it’s own with two fingers in the nose. After all we can have a non-agression agreement with China, with a secret annex with the following content (remembering that Australia fought against continental Europe both in WW1 and WW2):
1) if China invades Siberia it’s forces will get nuked
2) if China invades Australia, Europeans will angrily stamp on the floor real hard and worse: for at least three years Europe will import 5% less fireworks from China, I repeat 5%!
J-Gav on Sat, 13th Apr 2013 12:01 pm
Accelerating decline rates will mean accelerating price rises at some point and then accelerating panic as the Age of Oil begins to unravel in earnest. Any way you can find to reduce dependency on any grid will be helpful.
econ101 on Sat, 13th Apr 2013 3:30 pm
The problem is of course that future finds must offset depleted reserves. One way to look at this is to realize development will be confined to known areas until these areas become uneconomic. Then production areas will expand.
some of the expansion areas are already defined and adjacent to what is out there now, others are being studied for development further out. There are more than enough reserves identified now without exploring another day to last 100 years. Continued exploration is going to certainly expand these reserves.
Its not necessary for the human race to identify all of its oil that it is going to need forever, today. What we have to realize is we have huge supplies ready to go, some on deck and others further out. Certainly more will appear as they have in the past.
GregT on Sat, 13th Apr 2013 5:00 pm
The US is well on it’s way to becoming a third world country, or a Banana Republic. Just take a good long look, at almost every major city.
“Banana republic is a political science term for a politically unstable country whose economy is largely dependent on the export of a single limited-resource product, such as bananas.(or FRNs ) It typically has stratified social classes, including a large, impoverished working class and a ruling plutocracy that comprises the elites of business, politics, and the military.[1] This politico-economic oligarchy controls the primary-sector productions and thereby exploits the country’s economy.”
Sounding more and more familiar, with every passing day.
BillT on Sat, 13th Apr 2013 5:41 pm
“… 750 million Europeans from Euro-Siberia will observe the spectacle from the sideline and will have great trouble hiding their delight…”
If you truly believe this, you are in deep denial. At this point, it appears that the EU is going to default one by one and disappear in to the third world, Germany included. Then Japan, then the US. Then the riots will begin in earnest all over the West.
And a treaty is just paper. When the SHTF, it will be every country for itself. Russia will sit on the sidelines and pick up the pieces of Europe that are left when it is over. If it does not go nuclear in a new world war.
Arthur on Sun, 14th Apr 2013 12:47 am
“At this point, it appears that the EU is going to default one by one and disappear in to the third world, Germany included. Then Japan, then the US. Then the riots will begin in earnest all over the West. ”
You are unable to frame an argument and simply make unsubstantiated assertions.
You are totally ignoring the arguments I made in my post. The US bailout mass in 2008 was 100 times that of Cyprus and 10 time that of Greece. So, if you want to use bailout mass as an indicator of who is going down first, according to your own logic it should be the US. European budgets are more or less stable (3% deficit). In the US it is 1 trillion deficit.
Sure, following current trends, the US and EU will both disappear in the 3rd world, together. However if you look at numbers…
US 180/120 (babies 50/50)
EU 470/30
…it is obvious who will go first.
http://www.presstv.ir/usdetail/297097.html
Paul Craig Roberts: “US a Third World country in 11 years”
On top of that, Dutch are still Dutch, Germans still Germans, Poles still Poles, Russians still Russians, who all know what is to be defended. We have far more spiritual resources to fall back upon. When your ancestors left Europe 100-200 years ago, they abandoned their national identities and became ‘American’, the ‘proposition identity’ you share with Africans and Asians… meaning no identity at all, meaning virtually defenseless.
When communist/multicultural shithole Yugoslavia exploded, the Serbs had Kosovo ethnically cleansed within 48 hours and hunted down all the muslims against the fences of Macedonia, (illustrating how alive national identities in Europe still are) until your jewish rulers Wesley Clark and Madelaine Allbright proclaimed that ‘nationalism was no longer to be tolerated in the 21st century’ and started to bomb the Serbs.
“Then the riots will begin in earnest all over the West. ”
You bet. Holland, France, Belgium and Britain are going to be war zones. In Holland 1 million muslims are going to be no match for 16 million Dutch. Everybody here is totally fed up with the crime these people inflict on us and you can openly say that multculturalism has failed and that we would be better off without the muslims. Even politicians like Merkel and Sarkozy have openly said as that multicult has failed and as a consequence Turkey will never be member of the EU and Turkey knows it.
The bad news for Anglosphere is that Russia is no longer on your side. Russia that basically won WW2 for you. For every American, 50 Russians died, so you could achieve world hegemony on the cheap. So how does Anglosphere think to play the ‘benevolent hegemon’ much longer? We were not with you in Iraq. Instead Europe (France/Germany) sided with Russia, much to our longterm advantage. So how much longer do you think to stay on top in the world (if you ever were, your post WW2 defeats were numerous) and prevail on your own against China, Russia and Europe, when you got you beh**** kicked by Vietnamese, Afghans, Iraqis and even Somalis?
The Brics are not fighting the euro, for the simple reason they do not feel threatened by Europe. Instead they are combining forces against the US, putting you in dangerous isolation. That’s what you get if you have no defenses against the youknowwhos.
In continental Europe, they never had a chance. But autocratic Russia and ‘nation of immigrants’ USA were easy targets. In Russia everybody with half a brain now knows who was behind the bolshevik revolution and the murder of millions, effectively decapitating Russian society. Russia is now immune against them. Khodorkovsky is in jail and Berezovsky committed suicide, which was reason for me to open my best bottle of wine.
“Russia will sit on the sidelines and pick up the pieces of Europe that are left when it is over.”
Dream on. Russia needs Europe just as much as Europe needs the resources of Russia. For centuries Russia is striving to become European and recently Putin confirmed that Russia is a European country (stating that Russia would strive to become Chinese would be a joke). The entire logic of the situation, in casu the presence of 1300 million Chinese, points at the inevitable formation of an EU-Russian alliance. Timing however is crucial. If Europe leaves the western alliance too early, your rulers could contemplate a last minute alliance with China, just like you did with the Soviets against your mother civilization in 1933. We in Europe have to wait until either the US is at war with China or Europe can carve out Euro-America from the carcass of the US as a junior partner, after a civil war in the US or we can be certain that a balkanized US will become isolationalist and no potential ally of the Chinese. Only then the formation of the Greater European alliance (‘Eurosiberia’) will begin.
Arthur on Sun, 14th Apr 2013 1:04 am
http://deepresource.wordpress.com/2012/06/23/russia-plays-the-european-card/
From Putin’s landmark foreign policy paper of feb 2012:
“Russia is an inalienable and organic part of Greater Europe and European civilization. Our citizens think of themselves as Europeans. We are by no means indifferent to developments in united Europe.”
There you go… straight from the horses mouth: ‘Greater Europe’.
The current overtures between Russia and China are a result of the threats from NWO Anglosphere against Russia and China, but underneath the Russians have very uneasy feelings towards China. China is overpopulated, Russia underpopulated. A desperate China could takeover resource rich Siberia and Russia knows it. That’s why a future greater European alliance will need the Australian safety valve, to feed to the red dragon (sorry about that Mel).
BillT on Sun, 14th Apr 2013 3:50 am
Arthur, get real…when the SHTF, No-one will be trying to do anything but survive. Europe has nothing Russia will wants. 400 million spoiled European Westerners that are crashing their dream of unity, one day at a time? No, Russia will wait and pick up the pieces after it is over, IF there is anything left after the war.
Arthur on Sun, 14th Apr 2013 6:39 am
What do you mean SHTF? War? What war? The US storming Normandy, the Crimea and mainland China? Lol US boots on ground was always a receipe for disaster unless you could rely on stronger partners to do the heavy lifting, like the Soviets. There is not going to be a war other than proxy wars, achieving results 180 degrees from what was intended: the creation of both a Shi’it and Sunni empires that will give the finger to the West. Or maybe a bombing campaign against Iran, driving Europe even faster into the arms of Russia after Iran shuts off the Gulf.