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Russian Peak

General discussions of the systemic, societal and civilisational effects of depletion.

Re: Russia Boosts 2017 Crude Oil Production To 30-Year High

Unread postby rockdoc123 » Fri 02 Mar 2018, 15:26:51

If they were then why have so many companies not made any profit and why have so many gone bankrupt.


It’s called leveraging into a market that was at $100/bbl for 3 years and having to deal with the pain of a 50% drop in commodity price. Nothing to do with the ability of companies to make money now. The one’s who couldn’t survive have either been bought by stronger companies or have undergone restructuring. This has happened numerous times in the past, it is the way the industry strengthens itself. And as to profit once again you are trapped confusing paper accounting with cash accounting. The latter is all that counts in terms of whether a company continues to be going concern.

Where shale differs, as you quite rightly point out is that shale producers of oil and gas hope to increase the value of the company rather than pay dividends, or hold cash. Sadly for many this has not happened either. I would not label the management as crooks, although there have been some very dubious practices by some, but is clear that some have embellished their prospects somewhat and have looked for exit strategies to benefit themselves ahead of the shareholders


Complete BS. Please document your examples as to what you mean by embellishing. You do realize that a publicly traded company is required by law to disclose accurately. The SEC in the US, TSX in Canada etc are all over improper disclosure. I know this for a fact having had to deal with both over the years. By law mentioning something inaccurate in a corporate presentation or in a public presentation a press release etc is punishable by fines to the corporation, criminal charges to the Officers of the company and possible de-listing down the road.

Will drilling and completion costs continue to rise, rather than fall and what about resource quality.


It is a good thing you have stayed away from shale investments. Drilling and completion costs have been falling not rising. If you base your analysis on false pretenses you open yourself for a world of hurt in the market.

 
So as I stated before, and you confirmed, if at 36 months you have not paid down the cost of the well, you are probably royally stuffed. For an oil well ar a cost of $7 million that means about 135 000 bbls of oil give or take - 3750 bbls per month average. Far less than a Saudi well.


You didn’t read carefully. Current rates when they are in that sort of range are from wells in the exponential decline phase when the well has already paid out. IP rates in the Marcellus are generally pretty high. CHK drilled one in early 2017 that IP’d at 61.8 MMcf/d, Southwestern drilled one that IP’d at 37 MMcf/d in April of 2017, Rex drilled 2 in 2017 that IP’d at about 40 Mmcf/d. That results in an on average revenue per well somewhere between $20 and $30 million if you assume the $2.40/Mcf figure I quoted. These wells pay out in the first twelve months quite easily.
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Re: Russia Boosts 2017 Crude Oil Production To 30-Year High

Unread postby peakoilwhen » Fri 02 Mar 2018, 17:26:44

on the subject of russian oil. The recent oil price drop is orchestrated to try hurt russia, rockdoc will confirm this. the anglo-us oil masters actually want to create an 70s style oil crisis, so that petrol at the pump cost go way up, to be too expensive for many consumers so they have to abandon their petrol cars. Meanwhile electric battery car purchases will be subsidized by the bankers.
But this plan can't happen with russia pumping out vast amounts of oil. If the anglo-us majors were to orchestrate an oil shortage in all the production they control, then russia would reap mega profits - since they wouldn't go along with the plan - instead just pumping out as much oil as possible.
So the anglo-us has to destroy the russian oil mob or seal it off from the rest of the world, hence the wars in ukraine and syria. The deep basement rock abiotic wells in the crimean are the target. the anglo-us have to seize them if they want to sell tesla cars. That fake car in space gimmick won't work w/o a firm grip on the crimean wells.
This is all true and david knows it and will have something to say about it if u copy paste it to him.
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Re: Russia Boosts 2017 Crude Oil Production To 30-Year High

Unread postby Outcast_Searcher » Fri 02 Mar 2018, 17:53:08

peakoilwhen wrote:on the subject of russian oil. The recent oil price drop is orchestrated to try hurt russia, rockdoc will confirm this. the anglo-us oil masters actually want to create an 70s style oil crisis, so that petrol at the pump cost go way up, to be too expensive for many consumers so they have to abandon their petrol cars. Meanwhile electric battery car purchases will be subsidized by the bankers.

Would you care to offer PROOF, beyond delusional ravings? (While you're at it, any anti-Semetic rants to add, re evil bankers?) :roll:

It seems pretty obvious to me that recently, when the stock markets get skittish, it's "risk off" and oil prices, which have been trending up the past 6+ months, come off as long oil futures traders take profits and take risk off the table.

DId the word "correlation" make it to your education, while you were studying paranoia and evil plots by "the rich"? If so, look at the correlation between the oil markets and the US stock markets in recent weeks, and feel free to show why I'm wrong.

Not surprising. Not complex. No conspiracy theories or demented raving required.

And Occam (of "Occam's razor") approves of the simplicity of my argument vs. yours, by orders of magnitude.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Russia Boosts 2017 Crude Oil Production To 30-Year High

Unread postby tita » Fri 02 Mar 2018, 18:34:01

"Drilling and completion costs have been falling not rising."

Yes and no... Costs are indeed lower, but (as I understood) they drill longer laterals and use different techniques for completion, increasing costs. But this gives higher initial rates and they can recover more oil in the first year. Along with hedging, they reduced substantially the economic risks they were exposed back in 2014.

I'm no expert, but I think the shale industry changed a lot in the last three years. It's no more the black gold rush stimulated by high oil prices that led to a frenzy of oil drillings.
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Re: Russia Boosts 2017 Crude Oil Production To 30-Year High

Unread postby peakoilwhen » Fri 02 Mar 2018, 18:43:12

>Would you care to offer PROOF

stopped reading there. proof exists only in maths. outside of maths, evidence is used. you will learn about evidence when u go to big school. come back here if u pass your science exam. good luck.
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Re: Russia Boosts 2017 Crude Oil Production To 30-Year High

Unread postby rockdoc123 » Fri 02 Mar 2018, 18:56:47

Yes and no... Costs are indeed lower, but (as I understood) they drill longer laterals and use different techniques for completion, increasing costs.


companies handle this by reporting cost/boe, which have been dropping
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Re: Russia Boosts 2017 Crude Oil Production To 30-Year High

Unread postby peakoilwhen » Sun 04 Mar 2018, 15:30:10

Re: Russia Boosts 2017 Crude Oil Production To 30-Year High

The ruskies have unlocked the secret of abiotic oil. Therefore western oil companies think russia must be destroyed for 2 reasons
1. left unchecked they will outproduce every other nation and stop the west from controlling the world oil market
2. too many western geos will realise abiotic theory is correct
russia hires western oil engineers, many come back disilussioned with fossil fuel theory and convinced of abiotic theory. anglo-us oil wants that truth to be secret. Thats why US-anglo-Israel are at war with russia right now, and are grabbing control of the middle east.
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Is Russia Cheating On The OPEC Deal?

Unread postby AdamB » Tue 03 Apr 2018, 16:37:48


After three months of steady output, Russia’s crude oil production increased in March to 10.97 million bpd, the highest level since April 2017, as the top two Russian companies boosted their production. According to data by the Russian Energy Ministry, Russian oil production in March was 46.39 million tons, or 10.97 million bpd, up from 41.85 million tons in February, or 10.95 million bpd. The March production level showed the first increase since December 2017, and is slightly above Russia’s quota in the production cut deal. Russia’s pledge in the OPEC/non-OPEC deal is to shave off 300,000 bpd from its October 2016 level, which was the country’s highest monthly production in almost 30 years—11.247 million bpd. Last month, the two largest Russian oil producers, Rosneft and Lukoil, both raised their production by 0.1 percent compared to February, according to energy ministry data, carried by Reuters. On


Is Russia Cheating On The OPEC Deal?
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2019 Russian Peak

Unread postby Pops » Fri 07 May 2021, 08:56:35

ByThe Moscow Times

April 12, 2021
Russian oil production might never recover to pre-coronavirus levels, the country’s Energy Ministry has forecast, according to the Kommersant business paper.

In a strategy document outlining prospects for Russia’s critical oil and gas industry, the government said its “base case” — or most likely — scenario is that Russia’s oil production will never again hit the record levels recorded in 2019.

In the last full year before the pandemic, Russia produced 560 million tons of oil — equivalent to 11.3 million barrels a day. But output dropped for the first time in more than a decade in 2020 as Russia agreed on significant production cuts with Saudi Arabia and other members of the OPEC cartel in a bid to support oil prices at the start of the pandemic — pushing production down 9% to 10.3 million barrels per day.

In the scenario labeled most probable, the Energy Ministry predicts Russia’s oil output will grow over the rest of the decade — but fail to hit the record output of 2019, with production hitting a post-coronavirus peak of 11.1 million barrels a day in 2029 before decreasing to 9.4 million barrels a day by 2035.

Russia vies with Saudi Arabia to be the world’s second-largest oil producer, behind the world-leading U.S. The Russian economy remains heavily dependent on energy exports, with revenues in pre-pandemic years accounting for more than a third of the government’s total budget and all extractive industries — covering oil, gas and other commodities — accounting for almost 40% of Russian GDP, according to the country’s statistics agency Rosstat.

In its most optimistic scenario, the Energy Ministry expects production to pass pre-coronavirus levels, peaking in 2030 at 12.8 million barrels a day before starting to decline. In every scenario presented, the Energy Ministry said Russian oil production had either already peaked, or would hit its maximum level within the next decade, Kommersant reported.

Russia remains poorly positioned to take advantage of the global energy transition to cleaner and renewable sources of energy, experts say. While countries in Europe and the U.S. have put clean energy at the center of their post-coronavirus economic stimulus and investment packages, Russia is reportedly planning to cut state spending on green energy. Analysts estimate that if every project currently in development is completed in time, Russia’s electricity generation from renewable sources, excluding hydropower, will be just 1% by 2024.

“While international oil [majors] are falling over themselves in their business transformation potential to become ‘clean,’ Russians are unlikely to compete with them in this renewables drive,” VTB Capital’s deputy head of oil and gas research Dmitry Loukashov said in a research note last week.

He does believe, however, that the Russian oil and gas industry could capitalize on so-called transition fuels, like hydrogen or ammonia, as well as take a leading role in investment and research into carbon capture technology.

The Energy Ministry strategy outlines that government tax cuts to high-potential oil fields, such as those in the Arctic region, will be crucial in helping the country maximize the potential of the vast energy resources it still sits on.

If oil prices lag, it estimates that only a third of Russia’s proven reserves will be profitable to extract, while even in the most optimistic scenario, with higher global oil prices, only two-thirds of Russia’s recoverable reserves will be taken out of the ground.
https://thebarentsobserver.com/en/indus ... government


A strangely frank announcement it seems. I've always kind of considered RU production growth as basically offsetting Mexicos decline. Their resurgence in the oughts was key. They've held on longer than expected back in the early days of PO, but then who hasn't LOL. Not sure if that wasn't just the typical underestimate or if it indicates a shark wave about to break.

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Re: 2019 Russian Peak

Unread postby aadbrd » Fri 07 May 2021, 10:17:22

We may look back to this as the moment the clock really began to tick on Putin. Russian kleptocracy relies on the power that comes from Russia's post-soviet oil boom. Then again they may follow the US pattern and find ways to have a second wind via unconventional.
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Re: 2019 Russian Peak

Unread postby Tanada » Fri 07 May 2021, 10:44:48

aadbrd wrote:We may look back to this as the moment the clock really began to tick on Putin. Russian kleptocracy relies on the power that comes from Russia's post-soviet oil boom. Then again they may follow the US pattern and find ways to have a second wind via unconventional.


Russia is also doing quite well in the natural gas export business with its new pipeline connections to China being a key aspect of that.
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Re: Russian Peak

Unread postby JuanP » Wed 12 May 2021, 12:46:54

"Not running out anytime soon! Russia’s gas reserves will last for another 100 years, claims Moscow’s natural resources minister"
https://www.rt.com/russia/523603-russia ... long-term/

"The Russian government has upped its official long-term estimate for hydrocarbon reserves to over a century as it plans to develop resource production of the Arctic region, which contains 72% of the country’s natural gas deposits.
Russia’s natural gas supplies will suffice for at least 100 years, according to Minister of Natural Resources and Ecology Alexander Kozlov. In a recent interview with Moscow daily RBK, Kozlov said: “The provisions of all oil reserves at the current production rate is 59 years, and natural gas – 103 years.”

This is a more optimistic figure than the one expressed by Kozlov's predecessor Sergey Donskoy, who said in a 2017 interview that oil reserves would last 57 years at best. Moreover, Donskoy pointed out that such an estimate relates to deposits which can ‘theoretically’ be extracted; the number is closer to 28 years when including proven oil reserves where the exact locations and means of extraction are known."

More at link, including info on Arctic supplies and the use of the Northern Sea Route to export them. I expect Putin and most, if not all, of us to die of old age while Russia still has more than enough oil and gas to supply all its needs and export the surplus, though Russian oil production may have already peaked or may peak in this decade, but as someone who has been repeatedly wrong since 2005 about forecasting Russian oil production peaking in the short term future I keep a very open mind about it these days.
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Re: Russian Peak

Unread postby dissident » Wed 12 May 2021, 17:06:49

The usual "ceteris paribus" estimates that are rather worthless. If natural gas is used more instead of coal, e.g. China, then these forecast periods can be divided by anything over 3. And 100 years from now is a bloody long time. Maybe we will have fusion powered economies by then, or maybe not.
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Russian decline

Unread postby mustang19 » Sun 11 Jul 2021, 20:49:52

https://i.ibb.co/zGp25WT/B7405648-CD6-C ... -F4-C4.jpg

From https://www.oxfordenergy.org/wpcms/wp-c ... ght-57.pdf

Russian production hasn't increased since 2016 except for OPEC decisions. It's offshore projects in Sakhalin were made in the nineties and basically depleted by now. The Arctic growth will just offset this.

Russia was growing 200k BPD per year in 2016. It should have, counter factually grown from 11,200 in 2016 to 11,800 in 2019 when OPEC curbs were released. This is crude plus condensate.

In reality it never surpassed 11,500, and fell down to 11,300 before 2020. This means 200k per day of growth was lost in three years. Furthermore, an increasing share of this depends on its arctic growth.

https://assets.geoexpro.com/uploads/a70 ... rt1130.jpg

From here
https://coastalreview.org/2015/06/an-offshore-timeline/
https://www.geoexpro.com/articles/2017/ ... investment

It takes about 3 years to develop a deep water field before production. Virtually all Russian discovery in the arctic (Kara sea) was before 2015, which means they started production in 2018 and peaked in 2021 based on the 5-10 year life of a deep water field. At 50k production this is a 15k annual decline.

Sakhalin I started production in 2005-10 and Sakhalin II in 1999. Sakhalin III was 2014 and has half the reserves of I. Given a 15-30 year life of a oil well this puts peak before 2020. At 400k production this is a 40k annual decline. Caspian production peaked in 2010 and has been falling 5% a year. With 200k production this is a 10k decline.

Given all this, offshore production must already be falling 65kb per year since 2020. The Vostok project is expected to start production in 2024. East Taimyr only yielded dry wells, the Vankor field has 1.5 billion barrels and is peaked, Zapadno-Irkinsky block has a third of that, and Payakhskaya is 1b. The 40b estimates must be bitumen because none of the individual fields are near that. A plausible peak production for the Vostok project is 200k which doesn't come close to offsetting the decline of existing offshore.

Russia is projected to hit 11,500 barrels by 2022 and will then enter a accelerating 70k per year decline with 65k offshore headwind, temporarily offset by Vostok. Even if production barely grows, it will exceed capacity by 2024, by which time it will fall at an accelerating 6% per three years. 20% will be gone by 2030, most by 2035 and all by 2040.
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Re: Russian Peak

Unread postby Tanada » Sun 11 Jul 2021, 21:10:27

This graph shows a different reality.

Image
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Re: Russian Peak

Unread postby mustang19 » Sun 11 Jul 2021, 21:17:00

Tanada wrote:This graph shows a different reality.

Image


It shows that Russian production increased 300k from 2016 to 19, versus 600k like it was supposed to. Furthermore, condensate (mostly onshore) did worse and you excluded it.
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Re: Russian decline

Unread postby AdamB » Sun 11 Jul 2021, 21:46:28

mustang19 wrote:Russia is projected to hit 11,500 barrels by 2022 and will then enter a accelerating 70k per year decline with 65k offshore headwind, temporarily offset by Vostok. Even if production barely grows, it will exceed capacity by 2024, by which time it will fall at an accelerating 6% per three years. 20% will be gone by 2030, most by 2035 and all by 2040.


Reservoir dynamics (based on things like physics...and math) do not allow production decline to increase exponentially with respect to time on any long term basis except under 3 conditions, 1) production is being curtailed artificially at the surface, above and beyond the normal exponential nature of decline based on rock, fluid and pressure mechanics, 2) normal closed system fluid mechanics are interfered with exogenous to the formation in question, such as transient pressure introduced from other producing areas or zones in hydraulic contact with the original, and at the reservoir level, or 3) you are an internet troll who doesn't understand why 1) or 2) works.

You really should have talked to a reservoir engineer before you ever published all that nonsense on eroei, and demonstrated yet again why you need to sanitize the internet from all the other claims you made that are as ridiculous as the one above Short...sorry...Mustang19.
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Re: Russian decline

Unread postby mustang19 » Sun 11 Jul 2021, 21:55:41

AdamB wrote:
mustang19 wrote:Russia is projected to hit 11,500 barrels by 2022 and will then enter a accelerating 70k per year decline with 65k offshore headwind, temporarily offset by Vostok. Even if production barely grows, it will exceed capacity by 2024, by which time it will fall at an accelerating 6% per three years. 20% will be gone by 2030, most by 2035 and all by 2040.


Reservoir dynamics (based on things like physics...and math) do not allow production decline to increase exponentially with respect to time on any long term basis except under 3 conditions, 1) production is being curtailed artificially at the surface, above and beyond the normal exponential nature of decline based on rock, fluid and pressure mechanics, 2) normal closed system fluid mechanics are interfered with exogenous to the formation in question, such as transient pressure introduced from other producing areas or zones in hydraulic contact with the original, and at the reservoir level, or 3) you are an internet troll who doesn't understand why 1) or 2) works.

You really should have talked to a reservoir engineer before you ever published all that nonsense on eroei, and demonstrated yet again why you need to sanitize the internet from all the other claims you made that are as ridiculous as the one above Short...sorry...Mustang19.


The EROI gets exponentially worse if you have the same investment in a smaller field, which in turn gets smaller due to your attempts to maintain output constant. It's the same as getting less milk out of a milk shake as you blow harder.

This is how all fields actually behave, Bradford field almost linearly declined to zero. If you combine multiple fields then they fall faster than linear at abandonment.

https://econbrowser.com/wp-content/uplo ... k_oil1.gif

https://ichef.bbci.co.uk/news/640/cpspr ... oil-nc.png

Venezuela is another accelerating decline example.
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Re: Russian decline

Unread postby AdamB » Sun 11 Jul 2021, 22:55:19

mustang19 wrote:The EROI gets exponentially worse if you have the same investment in a smaller field, which in turn gets smaller due to your attempts to maintain output constant. It's the same as getting less milk out of a milk shake as you blow harder.


Fortunate then that eroei has nothing to do with the physics of fluid flow through porous media.

mustang19 wrote:Venezuela is another accelerating decline example.


Indeed. See Reason 1). Duh. Listen more. Learn stuff. There is no requirement that trolls can only be cretins and dullards.
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Re: Russian decline

Unread postby mustang19 » Sun 11 Jul 2021, 22:59:49

AdamB wrote:
mustang19 wrote:The EROI gets exponentially worse if you have the same investment in a smaller field, which in turn gets smaller due to your attempts to maintain output constant. It's the same as getting less milk out of a milk shake as you blow harder.


Fortunate then that eroei has nothing to do with the physics of fluid flow through porous media.

mustang19 wrote:Venezuela is another accelerating decline example.


Indeed. See Reason 1). Duh. Listen more. Learn stuff. There is no requirement that trolls can only be cretins and dullards.


How can you understand fluid mechanics and not get that Permian, with 1 mile laterals, will overlap at a 1 mile distance it's already at and not grow anymore?
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