Joined: Oct 15, 2004 Posts: 2196 Location: Arkansas
Posted: Sun Apr 30, 2006 6:24 pm Post subject: Re: Is Opec at Peak Production
Pup,
Opec production as a whole has been flat for two years, and SA has been flat for two years.
I've been watching the models for two years - they don't work. First, no one can agree on a model. Second, the data is unreliable that is plugged in or it is unknown and then assumptions have to be made, and assumptions make an ass out of you and me. So, if we wait for a model, we won't see the peak until it is in the rearview mirror as Simmons says.
You say its not a geological peak - I think there is enough evidence to disagree with that. Kuwait and SA are the prime examples. Your numbers showing SA has increased production are wrong according to the Opec Monthly Production Report. I'll do a separate post in a minute on that. Further, you list Iran and Venezuela as two Opec countries showing declines in production, yet there is no political unrest in those countries to account for their declines.
I think the refinery capacity issue is another prime example of a geological peak. As you know, we have a thread arguing peak refinery capacity = peak oil. Its a logically sound argument. Its being reflected now. No one has come up with any evidence that the ICF report on a lack of refining capacity is incorrect. In fact, SA has said the same thing (linked on that thread). I'll do a separate post on the peak refinery issue later.
I think the geopolitics and economic manifestations that we see now with a tight oil/supply balance can be used to plug in the missing geological data and come up with a reliable peak oil model s that we can see peak oil on the front end and not have to wait and see it in the rear view mirror. As demand overtakes supply, political and economic pressures throughout the world increase. It Happened in the 70s and is happening again now.
For example, for two years now (actually since 2000), oil prices have increased because there has been tight capacity. During this same time period, wars have increased (Nigeria, Sudan, Iraq, Afghanistan along with other geopolitical hotspots like Iran). I don't see how these wars will ever be resolved, its the nature of the beast of demand overtaking supply. The wars, which I believe are the direct result of oil supply/demand issues, are not going to be resolved, and thus we have a peak in production. You say it is not a geological peak, I would ask what's the difference to the guy getting laid off from GM, a Delta Pilot taking another 1/3 paycut, or the guy who can't afford $3 per gas as it is.
Last edited by seahorse on Sun Apr 30, 2006 8:47 pm; edited 1 time in total
Joined: Oct 15, 2004 Posts: 2196 Location: Arkansas
Posted: Sun Apr 30, 2006 6:59 pm Post subject: Re: Is Opec at Peak Production
Pup,
You said above the Saudi Arabia has increased its production over the last 10 months. However, according to Opec, that's not true. According to the Opec Monthly Oil Reports, SA is producing less now than in even back in 2004. So, I will go with the Opec numbers.
seahorse2 wrote:
I checked the OPEC Monthly Oil report to see the numbers Opec is reporting. Interesting, here's what it reports about Saudi Arabia (most current report is data for Feb 06):
SA produced 9.394 mbpd oil, total Opec = 29,713 mbpd
SA operating rigs are 52 (contrasted with 160 give to Rockdoc at his meeting)
Compare the above to 04 Opec numbers, and you see SA and Opec are producing slightly less now than in 04:
In October 04, SA pumped 9508 mbpd total OPEC 30,228
In November 04, SA pumped 9,450 mbpd, total Opec 29,067 according to the Opec 04 Annual Review OPEC 04 Annual Review
Here's the numbers again in chonological order:
October 04: SA production = 9508 mbpd, Opec = 30228;
November 04: SA = 9450 mbpd, Opec = 29067 mbpd;
November 05: SA = 9.458 mbpd oil, Opec = 29,965 mbpd;
February 06: SA =9.394 mbpd oil, Opec = 29,713 mbpd
Joined: Oct 15, 2004 Posts: 2196 Location: Arkansas
Posted: Sun Apr 30, 2006 7:09 pm Post subject: Re: Is Opec at Peak Production
I'm reposting a link to the statements made in April 06 by the Saudi Ambassador to the US that SA was producing at maximum capacity. This was important bc it establishes what their current maximum capacity is, which is about 9.5 mbpd according to the Feb 06 Opec Monthly Oil Report. It is significant also, because for the first time, SA no longer claims to have a spare capacity of 2mbpd. For if they are producing at maximum capacity, there is no spare capacity.
This is the kind of info that can plug in the missing data for all the models.
What happened to the spare capacity? The Ambassador also said that existing fields had an 8% depletion rate. Rockdoc's suggested that the spare capacity may have been used to offset depletion in existing fields. This makes sense. They used the spare capacity to offset existing depletion, and in fact, al-husseini said as much in an article to the Oil and Gas Journal in August of 04 in a series by the magazine on Hubbert Revisited.
Last edited by seahorse on Sun Apr 30, 2006 7:22 pm; edited 1 time in total
World production chart _________________ "Peak oil isn't more than an interesting industry factoid and doesn't have anything to do with the hysterics speculated on ad nauseum around here!" ReserveGrowthRulz
Posted: Wed May 03, 2006 10:40 am Post subject: Re: Is Opec at Peak Production
The links Jato posted are an interesting read/analysis, because they break down Opec production into two categories: (1) those with political instability and (2) those that are more constant. Those that are more or less constant reached a production peak in September of 2005. As this article points out, six months doesn't make a trend, but is long enough to start scratching your head and asking why. All roads lead to Deffeyes (sp?)
Posted: Wed May 03, 2006 6:44 pm Post subject: Re: Is Opec at Peak Production
I remember yesterday I heard someone from Saudi (again) make the statement that they can increase production to 12.5+ mbd by 2009. I will believe that when I see it...I guess if they can get people to buy their sour crude and find a technological fix to work those fields currently unworkable due to contaminants maybe.
I think it will be very hard to determine OPEC peak till a fair ways after the fact due to stability/war issues in OPEC countries, which is actually a side-effect of PO as demand heats up for whats left.
Posted: Tue May 09, 2006 10:52 am Post subject: Re: Is Opec at Peak Production
Nice article from Dantespeak that SA says oil prices will stay firm through the rest of the decade.
DantesPeak wrote:
Saudi Arabian Oil Minister Ali al-Naimi also said that Riyadh has embarked on a $50 billion drive to expand production and refining capacity. A trio of new oilfield projects will allow the kingdom to pump 12.5 million by 2009.
To complete those projects, the kingdom has plans to use it's gas reserves, estimated to be the fourth biggest in the world, almost solely for internal purposes.
Or in other words, on the downslope of PO, we need to use more of our own energy reserves to get the oil out of the ground - not to mention the growing internal populations that are also demanding more energy.
Quote:
RIYADH (MarketWatch) -- Saudi Arabian Oil Minister Ali al-Naimi said Tuesday he believes crude oil prices will "stay firm" for the rest of this decade due to strong economic growth, tight refining capacity and the long lead times needed to bring new oil capacity into service.
"It is not my nature to forecast oil prices...Nevertheless, I believe the oil prices for the remainder of this decade will stay firm," Naimi told a Euromoney conference here, without providing any detailed price projections.
Naimi, de facto leader of the 11-nation Organization of Petroleum Exporting Countries, said he believed that a lack of surplus global refining capacity would be a problem over the next four years despite efforts currently underway to boost capacity.
Naimi said the tight refining capacity in the world today was due to inadequate investment the past two decades due to meager returns in the sector and burdensome regulations and restrictions on building new refineries.
"It is highly probable that the increase in demand for oil at the end of this decade will reach about 6 million bpd...I have no doubt that the oil producing countries, with the kingdom at the forefront, are capable of easily meeting this increase."
Riyadh has embarked on a $50 billion drive to expand production and refining capacity. A trio of new oilfield projects will allow the kingdom to pump 12.5 million by 2009. –– Reuters
NASDAQ - The Organization of Petroleum Exporting Countries produced 29.78 million barrels of crude oil a day in April compared with 29.69 million b/d in March, the U.S. Energy Information Administration said Tuesday.
Excluding Iraq, OPEC members' output averaged 27.88 million b/d in April compared with 27.79 million b/d in March.
---
OPEC may be at a plateau but they haven't really started to decline yet.
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