Exploring Hydrocarbon Depletion
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Page added on June 21, 2012
By Kjetil Malkenes Hovland
OSLO–Norwegian oil giant Statoil ASA (STO) said Thursday it expects global oil demand to peak at 103 million barrels a day around 2030, adding it expects increasing complexity to push production costs higher for marginal barrels.
In a report, the company estimated the current cost of marginal oil barrels to be in the range of $75-$90, up from only $30-$35 a barrel in the early 2000s. The most expensive barrels come from Canadian oil sands projects, the company said.
The record level of global oil prices in 2011 added to the debt burden of many oil-importing nations. If cheap, conventional crude oil is increasingly replaced by more expensive, harder-to-get barrels, it could dampen demand growth. For oil companies, higher production costs on new projects will likely reduce returns unless the oil price increases further.
“The steep rise in marginal full-cycle costs which started in 2004 were primarily driven upwards by the tightening of all supplier markets, but rising complexity of reservoirs and projects has also contributed to the higher cost level,” Statoil said, adding that increased complexity would “most likely” push costs higher in the long term.