GOM Production and Other News

Not much happening on the Peak Oil front these days. I checked out the BSEE Gulf of Mexico production. Data is in kb/d with the last data point September 2013.GOM Production

Average production from the GOM has been relatively flat for the last two and one half years at about 1.260 million barrels per day. The arrow marks April 2010, the month of the Deepwater Horizon disaster.

The big deepwater plays continue to decline. I guess they are bringing on other wells in order to keep production flat.

Atl+TH+Tahiti+BF

The above chart is combined liquids production of Atlantis, Thunder Horse, Tahiti and Blind Faith. The last data point is September 2013.

I found this chart while browsing the net yesterday. It was published in the Albany Tribune but they say it  is from the EIA’s Short-Term Energy Outlook. I failed to locate it there however.

EIA Liquids Supply

It’s a little fuzzy because I had to enlarge it. But it clearly shows that without the US and Canada world oil production would be in decline. Even with Canada but without the US then world oil production would still be in decline. And notice the words under the chart. “Note: Almost all countries excluding Saudi Arabia are at full capacity…”

All countries excluding Saudi Arabia are at full capacity. Saudi might produce half a million barrels per day more, perhaps less.

This chart I did find in the December Short-Term Energy Outlook, link above. It is a bit clearer. This chart clearly shows that in 2013 the world would have been in steep decline were it not from increasing production in North America.

EIA World Crude Growth

Notice that they were expecting Russia and the Caspian, (Azerbaijan and Kazakhstan), to increase slightly in 2013, they did, but are expecting them to slightly decline in 2014. That will be interesting to watch.

Something else I came across yesterday that I would like to share with you. It is also from the EIA: Shale oil and shale gas resources are globally abundant

EIA Shale Reserves

3.357 trillion barrels of “technically” recoverable oil with shale oil 10% of that total! All that oil and everyone, with the possible exception of Saudi Arabia, is producing flat out. That is over 100 years worth at current consumption rates. Is that a joke or what?

Note: The EIA still has not published their International Energy Statistics, the report of every nation’s oil production. They are almost two months behind. The last report that came out in November had production numbers only through July 2013. When, or perhaps I should say if, the report does come out I will have a post on it and also update the Non-OPEC Charts page. The OPEC MOMR is due out the 16th with OPEC production numbers through December.

EDIT: Check out this article: Natural plunge in Iran’s oil output

Based on a report which was published by Iran’s Majlis (Parliament) Research Center in October 2009, Iran’s production capacity annually declines by an average of 10 per cent…

EIA also reported in March that Iran’s oil output capacity annually declines by an average of 8 to 13 per cent.
EIA’s latest report published on Jan.7 shows that not only Iran has failed to compensate for its natural production decline by inaugurating new oilfields and using new production methods, but also the country’s natural production decline has exceeded previous estimations

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44 Responses to GOM Production and Other News

  1. Doug Leighton says:

    Ron,

    To my mind, something is missing from the GOM discussion. How can production remain more-or-less flat given the high (roughly 25%) decline rates of deep water plays, plays that are supposed to be the salvation of depletion from mature closer-to-shore deposits? Of course we don’t have access to all Gulf activity but this stuff is undertaken by companies who announce significant discoveries. And, the decline numbers from Atlantis et al are not an insignificant portion on the Gulf’s 1.2 M production total. What am I not seeing here?

    Doug

    • Not sure but I think the GOM has it’s own Red Queen to deal with. There is a lot of activity going on in the Gulf. This article was published last month:
      Noble Energy to spend $450 million on Gulf of Mexico drilling projects
      Noble Energy Inc. plans to invest $450 million in oil and gas exploration in the Gulf of Mexico next year, with most of the work centering on development of three deepwater discoveries off the Louisiana coast.

      On the other hand this was just posted today:
      SandRidge Energy Gives Up on the Gulf of Mexico
      Well, that didn’t take long. Less than two years after buying Dynamic Offshore to build its Gulf of Mexico business, SandRidge Energy is giving up on the Gulf.

      At any rate there is still a lot of drilling going on in the GOM. Old leases dry up as new ones come on line. And as of now they are just staying even, just barely replacing the declines.

      • Watcher says:

        “There is a lot of activity going on in the Gulf.”

        In the wake of economic apocalypse, we should not underestimate the effect of the Red Queen’s frantic efforts. They are a BOOM in appearance. Look at all this activity!! Look at all these jobs!!

        In effect, from the perspective of unemployment, running short of oil is the very best thing that could happen.

        • TechGuy says:

          Watcher wrote: “In effect, from the perspective of unemployment, running short of oil is the very best thing that could happen.”

          For every one job created in the energy sector because of higher energy costs, probably 10 or more are lost in other private sectors as demand for non-energy goods and services decline. Not that I think interest rates will rise anytime soon, but if drillers were not able to borrow at the lowest interest rates in 100 years, I doubt their would have been a drilling boom in the US.

          I chuckled when I read this:
          http://cnsnews.com/news/article/michael-w-chapman/saudi-billionaire-prince-fracking-competitively-threatens-any-oil

          Prince Alwaleed Bin Talal… said the production of shale oil and natural gas in the United States and other countries, primarily done through fracking, is a real competitive threat to “any oil-producing country in the world,” adding that Saudi Arabia must address the issue because it is a “matter of survival.”

          • Watcher says:

            Fundamental rule of the universe: There are no stupid billionaires.

            Which means he knows better and has an agenda. Maybe he’s negotiating to buy something oil relevant and trying to push the price lower.

            • “Fundamental rule of the universe: There are no stupid billionaires.”

              Not necessarily so. That may be true for those that, on their own, made their billions. But Saudi Princes inherited theirs. I would bet there are a few stupid ones among them.

              • old farmer mac says:

                In addition to the rich who inherit, there are plenty of rich people who have gotten their riches simply thru luck in terms of being in the right place at the right time.

                Luck has as much or more to do with getting rich as brains; all it takes is a couple of big bets on long shot winners in picking investments.

                Even the greenest novices win a few hands playing poker with world class experts.

                The brains come in i holding onto the winnings – if they materialize ! ;-)

  2. aws. says:

    Train derails, catches fire in northwestern New Brunswick

    KAITLYN McGRATH AND THE CANADIAN PRESS, The Globe and Mail, Published Tuesday, Jan. 07 2014, 8:24 PM EST

    A CN train has derailed in New Brunswick, near the U.S border on Tuesday evening, resulting in a fire.

    Sharon DeWitt, emergency measures co-ordinator for the village of Plaster Rock, confirmed to The Globe that a few train cars derailed about five or six kilometeres east of Plaster Rock and that there is a fire. She said she does not know what the train was carrying and she is not sure whether the burning material is hazardous.

  3. aws. says:

    Higher insurance premiums in the forecast after months of wild weather

    JACQUELINE NELSON, The Globe and Mail, Published Tuesday, Jan. 07 2014, 6:48 PM EST

    Analysts at BMO Nesbitt Burns estimate that the recent damage caused by ice storms in Ontario, Quebec and Atlantic Canada last December could result in between $400-million and $600-million in gross losses for the P&C industry in Canada.

    This comes on the heels of the rain storms and flooding that ravaged Alberta, Ontario and Quebec in recent months.

    The storms that swept through Alberta last June caused $1.7-billion in insured damages, making it Canada’s costliest natural disaster, according to the Insurance Bureau of Canada.

    • Tim E. says:

      Here in South East Wisconsin schools and businesses were closed due to the cold weather – which is something unprecedented. Now I have to agree it makes a lot of sense, but I believe that a major factor in the decision to shut the schools down was to control costs – especially costs associated with government services and first responder operations. The last few snowstorms here caused havoc on the roads and stressed the capabilities of first responders. It was even noted in the local paper.

      County stays calm during freeze

      RACINE COUNTY — An exceptionally frigid Monday passed without any major incidents, hassles or disasters in Racine County as temperatures marched gradually down throughout the day and into the night. Despite a brief power outage in Kenosha County that spilled into parts of Racine County, the coldest day in recent memory passed without a hitch, according to David Maack, coordinator at the Racine County Office of Emergency Management. “Everything so far seems to be stable … cross our fingers,” he said as Monday evening approached. Many businesses, offices, schools and other public services were closed Monday and will be again today, as officials urged residents to stay inside if possible.

      I think that there will be more closing like this in the future as governments seek to control costs and work with reduced numbers of first responders due to budget considerations. PEAK OIL!

      Amazing to watch – especially the people who get out of their cars and are congregating on the Freeway. It’s amazing that it wasn’t worse.

      The Department of Transportation’s traffic cameras captured the frightening massive pileup that happened on Highway 41/45 near Lannon Rd. around noon on Sunday, December 8th. Officials say the video clearly shows people were driving too fast for the conditions on the roadways. They say it also illustrates something you’re never supposed to do — step outside of your vehicle along the roadside — especially when the conditions are as they were on Sunday.

      http://fox6now.com/2013/12/10/video-traffic-cam-captures-massive-pileup-on-hwy-4145/

  4. I posted this up top but I put it down here also so no one would miss it:

    Natural plunge in Iran’s oil output

    Based on a report which was published by Iran’s Majlis (Parliament) Research Center in October 2009, Iran’s production capacity annually declines by an average of 10 per cent…
    EIA also reported in March that Iran’s oil output capacity annually declines by an average of 8 to 13 per cent.
    EIA’s latest report published on Jan.7 shows that not only Iran has failed to compensate for its natural production decline by inaugurating new oilfields and using new production methods, but also the country’s natural production decline has exceeded previous estimations.

    Iran claims 157.3 billion barrels of proven reserves. If that were the case then why is their production capacity declining? 157.3 billion barrels of reserves would give the a R/P ratio of 123 years.

    • Frugal says:

      With official proved reserves above 150 billion barrels, you’d think Iran would have no problems increasing production by a magnitude. As it stands, their depletion rate is a measly 0.65%/year. In other words, they’re either incredibly incompetent at extracting oil or their official reserves are total BS.

    • Watcher says:

      So maybe a decrease in oil exports from Iran was not all that sanctions relevant. In fact, if it’s intensely geology, even the magic of “investment” won’t solve it.

  5. old farmer mac says:

    http://www.brookings.edu/blogs/brookings-now/posts/2014/01/senator-murkowski-calls-for-end-to-crude-oil-export-ban
    Ending the ban might probably doesn’t matter one way or the other since oil is fungible and readily available ; it might save some shipping expenses by allowing Alaskan crude to be sent to Asian markets and thus net a larger profit for Alaskan oil.

    The problem is that such a move, if it succeeds, will be interpreted as evidence that we’re home free and the days of happy motoring are back again by the cornucopian msm.

    And of course Joe Sixpack will believe it, because he wants to.

    • TechGuy says:

      “Ending the ban might probably doesn’t matter one way or the other since oil is fungible and readily available”

      Not exactly. The price of oil in North America (NA) is consideably cheaper than it is in Europe and Asia. I think if US was to export, NA prices would be much closure to the prices in Europe and Asia. frack drillers probably can’t make a profit with NA oil prices, but a 10 to 20 increases per barrel would make a difference for them.

  6. Verwimp says:

    Maersk, one of the worlds biggest ship owning companies sold its oil tanker fleet to the Belgian company Euronav. A transaction of 750.000.000 EURO. Why? Does Maersk know about Export Land Model, and Euronav does not?

    “The outlook for the large crude tanker market has improved significantly over the last months indicating a resurgence of demand and an improved near term outlook,” Euronav said.

    So they are talking abouth “months”.

    http://www.seatrade-global.com/news/asia/maersk-tankers-sells-vlcc-fleet-for-$980m-to-euronav.html

    • Watcher says:

      A war between Japan and China puts those at risk, and Lloyds probably will raise that risk by invoking war clauses.

      I applaud this move by Maersk. Not a good business to be in.

      • old farmer mac says:

        I think there is a real possibility of a war within the foreseeable future in the Far East but that the risk of it is very small for now, barring unfortunate accidents.

        The owners of these giant ships, collectively, have been losing their shirts off and on for the last decade.

        Apparently there really is free market in shipping oil, and the folks who own tankers are in a situation similar to that of farmers.

        A modest amount of excess capacity in such a market can send prices to rock bottom and the market seems to be glutted with large crude carrier capacity over the last few years.

        I didn’t save links, but I remember reading about shipyards having tanker orders cancelled and collecting big penalties from the buyers and that sort of thing.

    • Ert says:

      Interesting & would make sense.

      Due to fracking US Domestic Oil imports went down from approx. 11 mb/d to 7 md/d. Europes oil consumption is declining and sluggish at best – reducing its total oil imports, especially because the € periphery is (currently) toast.

      China’s car sales in December 2013 jumped +21,47% up (total 2013 sales in comparison to 2012 was +15,71%) and their oil-import bill grew to 219,7 billion $ in 2013 (or 5,6 mb/d).

      Since I would assume that china has enough tankers on their own and under their own flag – it means that china does their thing – and the rest of the OECD world restricts their imports (with Japan as exception due to Fukushima).

  7. old farmer mac says:

    Here is another link to an article about the possibility of the crude export ban being lifted. This one goes into a good bit of detail.

    http://www.washingtonpost.com/blogs/wonkblog/wp/2014/01/08/u-s-oil-exports-have-been-banned-for-40-years-is-it-time-for-that-to-change/?

  8. aws. says:

    Only 1 of 9,136 Recent Peer-Reviewed Authors Rejects Global Warming

    Only one article, by a single author in the Herald of the Russian Academy of Sciences, rejected man-made global warming.

    A clue to the author’s motivation comes on the first page of the article, where he writes,”The switch of world powers first to decreasing the use of fossil fuel and then to carbon-free energy within the framework of the Kyoto Protocol may lead to economic collapse for Russia as a consequence of the reduction and, probably, even loss of the possibility to sell oil and natural gas on the world market.”

  9. Canabuck says:

    Re: China growth to the rescue.

    For those who believe that Chinese growth will solve all of the world’s problems, consider the following:
    Chinese Debt

    Read between the lines, and one finds that the growth of debt is around 13% of GDP per year.
    It currently stands at 56%. So, in another 4 years, China will be at 100% debt-to-GDP, and then there will be problems.

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