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The Kuwait Thread (merged)

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Re: Kuwait admits PIW was right

Unread postby Last_Laff » Mon 14 May 2007, 13:27:52

At 48 billion, how long does it take to consume?

I only have basic idea of consumption but bad at math. However, with your reply, it be helpful for my clarity.

For example, 82 million bbl/yr seem to be plenty left for 48 billion if you add up the yearly rate. does that put off as a slow decline while prices moderates?

I can think outside of the box, but this question comes to mind that there might be some differences somewhere between how much left (half left the harder to extract, I got that....) and yearly consumption and what not.

Just a question. :roll:
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Re: Kuwait admits PIW was right

Unread postby Valdemar » Mon 14 May 2007, 13:35:39

Last_Laff wrote:At 48 billion, how long does it take to consume?

I only have basic idea of consumption but bad at math. However, with your reply, it be helpful for my clarity.

For example, 82 million bbl/yr seem to be plenty left for 48 billion if you add up the yearly rate. does that put off as a slow decline while prices moderates?

I can think outside of the box, but this question comes to mind that there might be some differences somewhere between how much left (half left the harder to extract, I got that....) and yearly consumption and what not.

Just a question. :roll:


The world uses over 85 mbpd. China alone uses something like 2 bbl. annually, which is going up. Simple extraction rates will make this last a long time, but that won't change the bad fortunes this brings.
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Re: Kuwait admits PIW was right

Unread postby Twilight » Mon 14 May 2007, 14:04:37

It's about time. Let's see if the journals and BP bother to revise their annual numbers.

Here's hoping the rest of them own up. It's obvious that accepted wisdom is based on deception.
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Re: Kuwait admits PIW was right

Unread postby rockdoc123 » Mon 14 May 2007, 14:51:17

I think there is some confusion with terminology here. Somewhere I have the Petroleum Intelligence Weekly article but can't find it right now. A description of the report back when the blurb came out:

PIW said the official public Kuwaiti figures do not distinguish between proven, probable and possible reserves.

But it said the data it had seen show that of the current remaining 48 billion barrels of proven and non-proven reserves, only about 24 billion barrels are so far fully proven -- 15 billion in its biggest oilfield Burgan.

Kuwait has been adding up to 500 million barrels a year at Burgan which means the remaining non-proven reserves of some 5.3 billion barrels will likely be upgraded to proven, according to PIW.


now the sheikh says:

Oil Minister Sheikh Ali al-Jarrah al-Sabah confirmed on Saturday that Kuwait's proven oil reserves are 48 billion barrels -- a figure conflicting with the previous official estimates of nearly 100 billion barrels.

In an interview with a Kuwaiti newspaper, Sheikh Ali Al-Jarrah said unproved oil reserves in the country may reach 150 billion barrels.


From what I can tell I don't think he is changing his story at all. The 100 billion number probably refers to 3P reserves, the new 150 to 3P plus yet to find. What PIW was talking about was not just proven reserves but proven plus unproven. So the Kuwait official is still saying reserves are much higher than PIW claims from their leaked information.
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Re: Kuwait admits PIW was right

Unread postby Gazzatrone » Mon 14 May 2007, 21:15:29

Last_Laff wrote:At 48 billion, how long does it take to consume?

I only have basic idea of consumption but bad at math. However, with your reply, it be helpful for my clarity.

For example, 82 million bbl/yr seem to be plenty left for 48 billion if you add up the yearly rate. does that put off as a slow decline while prices moderates?

I can think outside of the box, but this question comes to mind that there might be some differences somewhere between how much left (half left the harder to extract, I got that....) and yearly consumption and what not.

Just a question. :roll:


Depends on how you approach it.

If you take is as read that all of that 48 bb can be extracted then at current consumption rates of nearly 31 bb per year, if this was the only oil field then by August 2008 we'd all be screwed.

But we all know on here that 48 bb cannot be extracted fully because of EROEI. At present (though not qualified) that rate is reported to be at 3:1, so to extract that 48bb you use 16bb so in effect you are only able to utilise 32bb. This is according to the EROEI remaining at 3:1, but the further you go down the more energy you have to use. that 3:1 ratio will decline as well. You could find yourself in a situation where you have half of that original 48bb stuck in the ground and finding you are using more energy than you produce.

Never take consumption rates at face value. Oil depletion has a habit of hiding a few very depressing facts hidden behind statistics
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Re: Kuwait admits PIW was right

Unread postby Tanada » Mon 14 May 2007, 21:24:27

Last_Laff wrote:At 48 billion, how long does it take to consume?

I can think outside of the box, but this question comes to mind that there might be some differences somewhere between how much left (half left the harder to extract, I got that....) and yearly consumption and what not.

Just a question. :roll:


If they produce 2.5 Mbbl/d until it is gone that would be 52 years, then zero.
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To strive, to seek, to find, and not to yield.
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Re: Kuwait admits PIW was right

Unread postby killJOY » Mon 14 May 2007, 22:33:05

From what I can tell I don't think he is changing his story at all. The 100 billion number probably refers to 3P reserves, the new 150 to 3P plus yet to find. What PIW was talking about was not just proven reserves but proven plus unproven. So the Kuwait official is still saying reserves are much higher than PIW claims from their leaked information.


This is the kind of double-speak technical mumbo-jumbo that'll kill us all.

And, yes. I know what it means. I bothered to check out the difference between the "3 Ps" a long time ago. It's a way of saying "we really don't know shit."
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Re: Kuwait admits PIW was right

Unread postby KevO » Tue 15 May 2007, 07:31:29

Tanada wrote:
If they produce 2.5 Mbbl/d until it is gone that would be 52 years, then zero.


but they're going to go to 4mbpd apparently

Kuwait could reach 4m bpd capacity by 2012
Kuwait could boost its oil capacity to 4 million barrels per day eight years earlier than planned after recently announced finds, Kuwait's oil minister said on Tuesday.

"We could," said Sheikh Ali al-Jarrah al-Sabah, when asked about a Kuwaiti newspaper report last weekend that said capacity could reach 4 million bpd by 2012 instead of the previous target of 2020.

Opec member Kuwait's existing capacity is around 2.8 million bpd.

Last month, Kuwait made an oil and gas find in the al-Dhabi region in the north of the country. Sheikh Ali described the find as important but has yet to give details on its size.

A plan to boost output from four other northern fields would also figure in Gulf Arab state's plans to accelerate capacity addition, Sheikh Ali said on the sidelines of an energy event in Cairo.

The plan, known as Project Kuwait, has faced opposition from some parliamentarians who saw no need to boost output as state coffers were already bulging with record oil revenues.

Sheikh Ali has asked investment banks Morgan Stanley and Lazard to review Project Kuwait, with a view to submitting a revised plan to parliament later this year.

Other Opec members, uncertain about how environmental regulations and alternative fuels will hit demand, have grown more cautious about capacity increases. They are reluctant to spend billions of dollars on new projects only for them to lie idle.

Kuwait produced around 2.4 million bpd in April, according to a Reuters survey. The country sits on about 10 percent of global oil reserves. -Reuters


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Re: Kuwait admits PIW was right

Unread postby Newsseeker » Tue 15 May 2007, 09:22:41

This shows that transparency is possible but I doubt KSA is going to follow suit.
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Re: Kuwait admits PIW was right

Unread postby rockdoc123 » Tue 15 May 2007, 10:33:27

And, yes. I know what it means. I bothered to check out the difference between the "3 Ps" a long time ago. It's a way of saying "we really don't know shit."


Obviously you don't know what it means. For older fields (which we are mainly talking about in Kuwait) proven reserves would be those that are currently producing (proven producing) and those which have been proven capable of producing and are tied in. Probable reserves in the case of older fields are often conventional zones which are known to be oil bearing but have not been produced. For example certain zones may not have been perforated to flow previously due to higher gas content, differing permeabilities etc. In the case of Possible reserves for these older fields or contingent reserves as some such as WoodMac refer to the oil is known to be present but there needs to be either considerable expenditure which at current price level may not be economic or their needs to be improvement in technology. As an example we could look at Shaybah in Saudi Arabia. It is a challenging reservoir due to varying reservoir quality and the propensity for gas coning. Ten years ago the recovery factor was likely in the 25% range whereas recent estimates from Aramco suggest about 55% recovery factor. So ten years ago more than half of what is ultimate recoverable oil was in the possible category.
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Re: Kuwait admits PIW was right

Unread postby joewp » Tue 15 May 2007, 14:13:19

rockdoc123 wrote:
And, yes. I know what it means. I bothered to check out the difference between the "3 Ps" a long time ago. It's a way of saying "we really don't know shit."


Obviously you don't know what it means. For older fields (which we are mainly talking about in Kuwait) proven reserves would be those that are currently producing (proven producing) and those which have been proven capable of producing and are tied in. Probable reserves in the case of older fields are often conventional zones which are known to be oil bearing but have not been produced. For example certain zones may not have been perforated to flow previously due to higher gas content, differing permeabilities etc. In the case of Possible reserves for these older fields or contingent reserves as some such as WoodMac refer to the oil is known to be present but there needs to be either considerable expenditure which at current price level may not be economic or their needs to be improvement in technology. As an example we could look at Shaybah in Saudi Arabia. It is a challenging reservoir due to varying reservoir quality and the propensity for gas coning. Ten years ago the recovery factor was likely in the 25% range whereas recent estimates from Aramco suggest about 55% recovery factor. So ten years ago more than half of what is ultimate recoverable oil was in the possible category.


What you're basically saying is that they've peaked, all the cheap 'n' easy oil is gone and what's left is harder and more expensive to get. Reserves don't mean a thing, it's production that matters, right?
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Re: Kuwait admits PIW was right

Unread postby Leanan » Tue 15 May 2007, 14:56:58

Traditional production unfit for half of Kuwait's oil reserves

KUWAIT: More than half of Kuwait's oil reserves will not be produced through cheap traditional methods, Deputy Director General of the Kuwait Institution for Scientific Research (KISR) Dr. Nader Al-Awadhi said yesterday. Kuwait's oil reserves are estimated at about 95 billion barrels, among the biggest worldwide. Most production, if not all, is being produced through traditional methods, Al-Awadhi told a KISR workshop on "Managing Carbon Dioxide for Improving Oil Production" that started yesterday.

He expected that the traditional methods would produce 45 billion barrels, but could not be used for the rest (i.e. 50 billion barrels). Thus, emerges the necessity of developing new feasible environment-friendly methods for producing heavy oils, he said adding that oil production operations over the past years had focused on light oil.

"With the rising rates of consumption, light crude oils are being used up at higher rates", Al-Awadhi said noting that the heavy oil reserves worldwide are six times light oils.
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Re: Kuwait admits PIW was right

Unread postby rockdoc123 » Tue 15 May 2007, 15:48:22

What you're basically saying is that they've peaked, all the cheap 'n' easy oil is gone and what's left is harder and more expensive to get. Reserves don't mean a thing, it's production that matters, right?


Notwithstanding the fact the discussion here was about oil reserves of unspecified type and not production.....
Peaked with regard to light crude, well the oil minister admitted that several months ago. What he said was that they had tried to produce at a higher rate from Burgan but experienced problems so the most cost effective rate is where they are currently producing. Reserves do matter of course. Not all "heavier crudes" are created equal. Some can have low API but still flow at high rates (rheologic characteristics of the oil coupled with high permeabilty in the reservoir as an example), some can have higher API and not flow at high rates...there are a number of variables that go into the equation. Getting the stuff out of the field can sometimes be problematic if all of the existing pipelines are running light crudes. This means that the heavier crude has to be upgraded in some manner or mixed in order to get access to the line. Refining is usually the key. The products from heavier crudes are generally high quality, the big problem has been that there are very few oil refineries around that have the right specs.
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Kuwait drops dollar peg

Unread postby roccman » Sun 20 May 2007, 19:53:37

Reuters

Here we go!!!
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Re: Kuwait drops dollar peg

Unread postby Denny » Sun 20 May 2007, 20:16:19

And, we all thought Kuwait was a friend!

I think this will push up prices (US$) of most hard commodities.
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Re: Kuwait drops dollar peg

Unread postby ColossalContrarian » Sun 20 May 2007, 20:16:53

ummm.... THIS IS VERY SIGNIFICANT!!!

Will the rest of the World move to this "Basket of Currencies" slowly over time? How could Kuwait do this after we protected them from Saddam?

The move stunned Gulf currency markets and volumes dried up. The impact would be clearer on Monday when international markets open, said Steve Brice, chief middle east economist at Standard Chartered Bank in Dubai.
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Re: Kuwait drops dollar peg

Unread postby Tyler_JC » Sun 20 May 2007, 20:36:34

It might back sense to invest a little money in the Kuwait Stock Market or perhaps Kuwaiti treasury bonds.

China dropped the official 8-1 dollar peg but the Yuan hasn't really gained that much ground.

We might be experiencing a similar phenomenon in which Kuwait says it has eliminated the dollar peg, but in fact, isn't letting their currency float freely.

However, we must not forget that Kuwait has a current account surplus of 70% of GDP... :shock:
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Re: Kuwait drops dollar peg

Unread postby kochevnik » Sun 20 May 2007, 20:52:11

Yes and gold has reacted by going up an entire 0.60 dollars.

The 'system' has an awful lot of momentum.
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Re: Kuwait drops dollar peg

Unread postby Jack » Sun 20 May 2007, 20:53:31

Denny wrote:And, we all thought Kuwait was a friend!


Nations are friends to the strong; never to the weak. And the developing perception is that the U.S. is weak and growing weaker.

I suspect the U.S. will be rather lonely as this plays out.
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Re: Kuwait drops dollar peg

Unread postby DantesPeak » Sun 20 May 2007, 21:16:32

All Gulf countries have been considering going off the dollar peg, or modifying it for some time. Kuwait was probably just waiting for a good time when it would not get much attention. China just opened up its trading ban further the other day, and it is getting all the attention.

The rest of the Gulf countires will move form the dollar within three years. Not a guess on my part, they've already stated that.
It's already over, now it's just a matter of adjusting.
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