The EIA’s Drilling Productivity Report and Other News

The EIA just released its latest Drilling Productivity Report which is a report on all major shale plays in the U.S. All the data below, unless otherwise noted, is in barrels per day.

Three Plays

The EIA includes the Permian production as shale or light tight oil production. No doubt some tight oil is produced in the Permian but I think most Permian oil is conventional oil.

Total Shale Oil

Total shale oil production from all six shale plays. However I believe perhaps one million barrels of this is conventional production.
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Gulf Of Mexico Crude Oil Production

Folks who follow this blog know that I am a data hog. That is I track data from the US as well as production from the rest of the world. But there are periods during the month when there is just no new data coming in. During the first 10 days or so of a month is such a time, almost no new data is posted anywhere. So I try to find something else to post. It is on the oil production in the Gulf of Mexico.

The last data point on all charts is March 2014. All data is in barrels per day except the first chart below which is in thousand barrels per day.

GOM Production

The EIA gets their data from BSEE, (Bureau of Safety and Environmental Enforcement), a branch of Department of the Interior, not the Department of Energy as you might expect.

GOM BSEE

The BSEE is a little like the Texas RRC, that is they report the data they have even though they know it will be revised later. The EIA on the other hand, estimates where they think the data will be after it has all come in. So the chart above shows where they think production in the GOM will be after all the data comes in.
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In North Dakota it is Mostly Just One County

North Dakota publishes crude oil production numbers for each county. The problem is these numbers do not include confidential wells. Their totals for all North Dakota do include these wells however. I have figured out a way to estimate, pretty closely I believe, each county’s share of those unreported wells. That is take each county’s percentage of total production, then assume they would have the same percentage of confidential wells. It is not exact but close enough.

North Dakota Total

The data is published only as a PDF file and cannot be copied and pasted. Therefore I must input the data for each of 18 counties, each month, manually. That is very time consuming and I only had the patience to do 15 months. But that is plenty for what I am trying to show.

ND by County

All the rest of North Dakota combined produces less than the lowest of the big four.
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US Individual States Production, Bakken Area and GOM

The EIA’s Petroleum Supply Monthly has been published with production data for all individual states and offshore areas.  All data is Crude + Condensate and in thousand barrels per day with the last data point March 2014.

Mont+ND

 

Since the Bakken occupies part of two states, North Dakota and Montana, I have combined their production in order to get a better idea of what is really happening there. I have drawn a trend line from July 2011 through October 2012. That shows where production might have been if the fast decline rate and bad weather had not caught up with the. Production was 1,050,000 barrels per day in March, still 5,000 barrels per day below the point reached in November.

ND and Montana Change

I wanted to show this chart so we could get a better idea what is really going on in the entire Bakken area. Back in May and June of 2012 production was increasing by an average of 23,500 barrels every month. Now production is increasing by an average of 15,580 barrels per month.
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A Closer Look at Saudi Arabia

A press release from The Carbon Capture and Sequestration Technologies Program at MIT,  December 6, 2013, Bold mine.

Uthmaniyah Fact Sheet: Commercial EOR using Anthropogenic Carbon Dioxide
Company/Alliance: Saudi Aramco
Location: Saudi Arabia
Start Date: 2013/2014
Size: 0.8 Mt/yr
CO2 Source: Hawiyah gas plant
Transportation: 70 Km onshore pipeline
Oil Field EOR Storage Site: Ghawar field
Reservoir Type: Jurassic Carbonate limestones
Comments:

The objectives of the project are determination of incremental oil recovery (beyond water flooding), estimation of sequestered CO2, addressing the risks and uncertainties involved (including migration of CO2 within the reservoir), and identifying operational concerns. Specific CO2 monitoring objectives include developing a clear assessment of the CO2 potential (for both EOR and overall storage) and testing new technologies for CO2 monitoring.

Approximately 60–65% of all Saudi oil produced between 1948 and 2000 came from Ghawar. Cumulative production until April 2010 has exceeded 65 billion barrels. It was estimated that Ghawar produced about 5 million barrels of oil a day (6.25% of global production) in 2009. Ghawar also produces approximately 2 billion cubic feet of natural gas per day.

After 60 years of production, the field is depleted and Saudi Aramco is going to start CO2-EOR. The project will consist of 4 injection wells, 2 observation wells and 4 productions wells.

Is there any doubt anymore whether or not Ghawar is depleted? 2009 is likely the year when production began to fall fast in Ghawar. But it was already falling prior to that.

A bit of history. Three oil fields, discovered decades ago, were held offline because of economic and and other problems.

Shaybah: Discovered in 1968 but due to its remote location was not brought online until 1998 at 500,000 bpd. It was upgraded in 2009 and increased production to 750,000 bpd.

Khurais: Discovered in 1957 and brought online in 1959 and shut down in 1961 due to low production and remote location. It was brought back on line in the early 1970s. Khurais produced 144,000 bpd in 1981 but dropped off dramatically in 1982. Gas re-injection attempts to increase production failed and the field was shut down a short time later due to almost no natural pressure. In 2009 a new massive water injection program began with the injection of over 4 million barrels of water per day brought the field up to 1.2 million barrels of crude oil per day.

Manifa: Discovered in 1957 but shut down almost immediately because the oil was extra heavy and contaminated with vanadium. But Aramco built their own refineries to handle the oil. The field was put on line in April 2013 and was producing 500,000 bpd and will be producing 900,000 bpd in 2014.

It is these three fields that has kept Saudi production near 10 million barrels per day. But there are no more old fields to be brought on line. From here on out Saudi must rely on the fields it has.

Saudi Arabia

Okay, we know that Ghawar is depleted and in serious decline. But so is Safaniya, Abqaiq, Berri, Abu-Safah, Qatif, Zuluf, Marjan, and all the smaller fields in Saudi Arabia.

Saudi has three fields with a combined production of 2.8 to 2.9 million barrels per day that are not in decline. Everything else is seriously depleted and in serious decline. Matt Simmons, Twilight in the Desert Stuart Staniford, A Nosedive Toward the Desert and Chip Haynes Ghawar is Dying, were all absolutely correct… they were just all premature with their prognostications. They had not counted on Khurais and Manifa.

Saudi is diversifying, making preparations to increase their finished product income when oil production declines: Change is coming to Saudi Aramco, the state oil company

Time was when Saudi Aramco didn’t need to worry much about its ability to deliver all the oil needed to maintain Saudi Arabia’s share of the global market…

A quick glance at Aramco’s 2013 Annual Review, published last week, is enough to convince anyone that change is in the wind for the flagship Saudi state-owned enterprise.

“We have embarked on ambitious corporate transformation guided by our Strategic Intent, our overall vision for Saudi Aramco through 2020,” the review states.

 “These advancements will not only ensure that Saudi Aramco remains a global leader in crude oil and NGL production and exports, but will also propel us into the top tier of chemicals companies worldwide and reaffirm our commitment to the Kingdom’s future in a rapidly changing world.”
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