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Today's giant new oil discoveries -- largest in 150 years

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

Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby Plantagenet » Tue 07 May 2013, 12:06:56

ROCKMAN wrote:I think it critical for folks to understand the dynamics behind the current boom and increased oil production. The danger is their believing that there is a potential to find more “new” resources to develop. Every oil resource in the US has been identified long ago. Those economic to develop at current prices are being developed. And there are those resource plays that aren’t economic to develop at today’s prices. One day they may also boom…when prices are higher.


R - You are right on the money as usual.

However, there remains the question of when these "new" oil discoveries occurred. While the Bakken Fm was defined decades ago, only very limited oil production occurred until the price of oil went up and fracking became commonly used. The announcement last week by the Obama Administration that there are now 7.4 BILLION bbls of oil to be gotten from the Williston basin using current technology and at current prices is new. These "new" bbls oil need to be accounted for as "new" discoveries of oil. Anything over 500 million barrels of oil is considered a "giant" field. And when you add up all the new "giant" oil fields available through fracking, it amounts to a very large rate of discovery going on right now.

One of the foundations of the peak oil theory is the idea that oil discoveries "peaked" in the 1960s, and have systematically decreased and declined since then, inevitably leading to inexorable declines in global oil production. But thanks to fracking, there is a large "bump" of new oil discoveries occurring right now. I know the peak oil model was developed for "conventional" oil fields, but when discussing peak oil we can't ignore the new unconventional oil as it holds the promise of delaying declines in global oil production to some time out into the future.

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drilling and fracking can produce oil from throughout sub-surface shale beds
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Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby kublikhan » Tue 07 May 2013, 16:10:12

Planty, you are conflating discovery and production. All of this oil was discovered decades ago(not to mention production was going on decades ago as well). But production of these fields did not kick into high gear until the price of oil went up more recently. Discovery and production are not the same thing and should not be confused.
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Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby ROCKMAN » Tue 07 May 2013, 17:07:43

P- I’m always willing to cut folks some slack when they are semantic challenged. Some geologists like to use big technical terms to intimidate. But I typically rather use my smart ass approach and tease them. LOL.

You’re correct: the Bakken (as well as every other oil trend in the US) once discovered, develops on a time scale determined by the economics at the time. I’ll make the point again: we could have been drilling just as many Bakken or Eagle Ford wells 20 years ago as we are drilling today had the economics were right. That’s the other point I keep making although most here already appreciate it: we have not discovered “new oil” thanks to some silver tech bullet. I could have been horizontally drilling and frac’ng those EFS wells two decades ago just as I was doing in the hot resource play of the 90’s: the Austin Chalk. The potential of the current hot plays was known long ago. One company had over 400 wells in the AC that were nearing depletion. They offered a contract worth 100’s of million to any service company that could come up with an economic plan to side track those existing wells into the Eagle Ford, Buda or Georgetown formations (those last two are also oil saturated trends). No service company could come up with a program that could be justified with the oil price at that time.

The number of oil discoveries world-wide have peaked long ago if you are counting the number of fields. Understand I’m not denying the unconventional plays haven’t added to our reserve base. I’m saying those reserves were already on our books for a good while. There are a variety of “proven” reserve categories we use: proved developed producing (PDP), proved undeveloped (PUD), proved developed nonproducing (PDNP).We also have another category: proved non-commercial…PNC. During my career I have booked beaucoup oil/NG as PNC. I’m about to try to recover (via horizontal wells) some portion of 5 billion bbls of oil from some 60 year old fields along the Texas coast. I generated this idea about 15 years ago. But I couldn’t get financial support because the proven reserves in those fields were PNC at the time. All I could do is sit back and wait for prices to get high enough the reclassify them as PUD’s. And if my idea works COMMERCIALLY they will be reclassified as such.

And I prefer real examples over hypotheticals so here's a deal I’m looking right now. It’s a shallow (2,400’) Permian Basin oil field that was discovered over 70 years ago. Original in place oil 800 million bbls of oil. The field is nearly depleted and has produced about 80 million bo. IOW a 10% recovery factor. Which means the PDP was 80 million bbls and the PNC was 720 million bo. Proved non-commercial because oil prices were never high enough to justify an EOR effort. Until today, of course. The field is owned by a foreign that made an initial EOR attempt but failed for a lack of technical abilities.0

But there are two offset fields were the operators knew how to do it and the current projection is that they’ll boost the RF to 30%. Our field should do similar. So, thanks to the current high oil price the field no longer contains 720 million bbls of PNC but 160 million bbls of PUD…proved undeveloped and 560 million bbls of PNC. And when the hz wells are drilled and the CO2 flood begins that 160 million bbls of PUD oil will become 160 million bbls of PDP…proved developed producing. And if oil prices ever get a lot higher some of those 560 million bbls of PNC may become PDP. But remember: for over 70 years we knew there were 800 million bbls of proved oil sitting just 2,400’ below the surface. The amount of proved in place oil in the Bakken has not changed…just the recoverable amount thanks to higher oil prices.

Just as my links showed about the Bakken: over 30+ years ago geologists had identified upwards of 100 billion bbls of proven oil in the Bakken. But most of that proven oil was classified as PNC at the time. The only thing “new” in these trends is that higher oil prices have shifted an amount of those long know proven reserves from one category of proven to another. In simplistic terms it’s no different than transferring money from you savings account to your checking account. By doing so you didn’t make yourself richer but just made money available to write checks against. IOW to the vast majority of US geologists we haven’t discovered a great hidden trove. With the resource plays: we’ve always known the oil was there. Higher prices have just allowed us to transfer it from one account to another. Maybe 99.9% of the population didn’t know that oil was out there. But the oil patch did. All we’re doing now is picking up those plums that we knew were laying on the ground for many decades except now it’s worth our trouble to bend over and do it.

And that’s the very dangerous misinterpretation the majority of the public is developing: we have “discovered” huge amounts of energy that will lower our costs and renew our economy to its former glory days. A very dangerous mindset IMHO.
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Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby ralfy » Tue 07 May 2013, 23:38:31

As explained here:

http://en.wikipedia.org/wiki/Peak_oil

"Most of the remaining oil is from unconventional sources."

However,

http://en.wikipedia.org/wiki/Peak_oil#U ... al_sources

which means the "large 'bump'" in oil discoveries might not translate to a "large bump" in production, which means the "delay" might not be very long, and not before total production drops but before it cannot meet demand. For example, the IEA forecasts a 9-pct increase in energy production from all oil and gas resources worldwide, but that assumes conventional production not dropping. Meanwhile, the global economy will need to increase consumption by around 2 pct a year to maintain economic growth.

And then there's

http://en.wikipedia.org/wiki/Peak_oil#P ... _Cheap_Oil

which means continued economic crisis even before production drops.

Finally, one should consider articles like,

http://www.resilience.org/stories/2013- ... te-of-flow
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Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby ROCKMAN » Wed 08 May 2013, 08:04:54

ralfy – Yes indeed. But there’s an even bigger issue that I assume folks would realize but just to be sure: When a field is discovered those reserves are developed subject to current economic conditions. If I make a 10 million bbl FIELD discovery and drill my development wells that field will ultimately produce 10 million bbls of oil.

But not so with these TREND plays…which are NOT fields. The best example is what we just witnessed in the fracture NG shale plays. In early 2008 huge PROVEN reserves were booked in these TRENDS. These were essentially PUD reserves…proved undeveloped. And as drilling went forward some became PDP (proved developed producing) reserves. But then NG prices crashed and trillions of cu ft of PUD reserves became PNC (proved non-commercial) reserves overnight. But they still are PROVED RESERVES today. So in time NG prices will increase and those PNC reserves will begin to convert to PUD and eventually PDP reserves. But when that happens it would be misleading to say that we’ve just “discovered” a huge cache of NG reserves.

Just as invalid to say we’ve just “discovered” a huge cache of reserves in these oily shale trends. It also means that should we see a long term drop in oil prices billions of bbls of PUD reserves in these trends will be reclassified as PNC. But they’ll still be PROVED OIL RESERVES just as they had been for decades.

IOW I hope folks are beginning to understand that when anyone refers to X bbls of “proved” reserves that “proved’ is a rather meaningless number unless it is qualified. There are 100’s of billions of bbls of proved oil reserves in the world today. Some are producing, some are being developed and some are not being developed because the economics don’t justify it even with current high oil prices. If my idea to produce some of those 5 billion bbls of residual oil with new horizontal wells proves economic then a portion of those PNC reserves will be converted to PDP. But if the economics don’t work out then they’ll stay PNC...but they will still be PROVED reserves
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Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby Econ101 » Sun 12 May 2013, 13:45:27

These technologies were known and the basic formation comprising the Williston Basin have been known for some time. It is the refinements in that knowledge and the advances in technology that propel oil resource development. Price simply helpls prioitizes which will go first.

Its not entirely accurate to say we have discovered everything there is to discover. Sure, the entire continent is defined into various basins each of which is inventoried by the USGS. The well known resources in the Williston Basin recently had the inventory tripled. Thats inventory, not potential. Its an extremly conservative measure. The potential, as understood today, is probably 20 times the inventory as understood today.

The industry will go deeper and further afield in the Williston Basin than most think possible now. Tripling is just the first adjustment. They are expanding what they already know is there, they are finding more where they thought there was less. Its far more now than peak oil ever thought possible and will continue to grow as needed. They are looking far into the future. OIl development takes time.

These shale resources are coming on line world wide. these discoveries are changing the path of history and are among the greatest, if not the greatest discoveries of all time.

The best oil men in the world power the most efficient and mind boggling industry the world has ever known. We owe them a lot. These folks should be hearlded as heroes for sacrificing in the name of Americas energy needs. Its amazing!!!
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Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby rockdoc123 » Sun 12 May 2013, 19:23:53

But if the economics don’t work out then they’ll stay PNC...but they will still be PROVED reserve


Once again I need to refresh your memory on the definitions and the guidelines from the SEC. You have 5 years to convert PUDs to Proven developed or they have to be reclassified as Probable. For someone who claims to have booked reserves for many years I am a bit worried about your missing on this specific.
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Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby TheAntiDoomer » Sun 12 May 2013, 23:10:59

^rocdoc, I call that a "red flag"
"The human ability to innovate out of a jam is profound.That’s why Darwin will always be right, and Malthus will always be wrong.” -K.R. Sridhar


Do I make you Corny? :)

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Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby TrueBeliever » Mon 13 May 2013, 00:02:41

This optimism is most compelling for all of us who are addicted to our ability to dash through the snow in our heated vehicles, take a trip to Disneyland, or simply haul our two ton SUV on down to Walmart to buy a new plastic laundry basket, better to load our energy slave washer with.

As a heroin addict refuses to not chase dragons, we refuse to face the truth that we are winding down the Petroleum age - what we are offered are signs, or proof of this inevitability.

Some weeks ago, I ran into a neat bit of trivia regarding production of the Bakken shale oil - that each year, the existing wells combined all decline in sum a total of 750,000 bbl per day production - meaning that each year at least 750,000 bbl of replacement must be found to just maintain the then current production levels! The same authoritative source went on to state the obvious: over ten years' time, that amounts to at least 7,500,000 barrels per day replacement production - which is more than all the current shale production in North America (Texas, Pennsylvania, ND, etc.) today!

It doesn't take a genius to see the truth, that there's just no way in hell anyone's going to pull that off!
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Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby Econ101 » Mon 13 May 2013, 07:46:49

You trivia was wrong. Simply look at the number of rigs working and the almost unbelievable upward slope to the production figures and you will understand that ignorant exaggeration.

Since true believer made his post almost a million barrels of oil have been brought to the surface in North Dakota.

I guess, for those who have their peak oil political philosophy at stake, production in North Dakota is disconcerting?

1 million barrels/day and counting! Drill baby! We all need the oil whether we know it or not!

Don't forget North Dakota is a major coal producer too. They even have a coal gasification plant. :)
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Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby Pops » Mon 13 May 2013, 08:21:32

You're right, True, fracced shale depletes much faster than "Regular" reservoirs but of course all wells deplete with each barrel extracted and the flow eventually declines requiring a new well somewhere else to replace that volume. I can't remember what the guess is for that amount currently, 3-7mmbd per year? 1-3 billion barrels a year of new production, each and every year, just to stand still.
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Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby Econ101 » Mon 13 May 2013, 08:28:15

Pops wrote:You're right, True, fracced shale depletes much faster than "Regular" reservoirs but of course all wells deplete with each barrel extracted and the flow eventually declines requiring a new well somewhere else to replace that volume. I can't remember what the guess is for that amount currently, 3-7mmbd per year? 1-3 billion barrels a year of new production, each and every year, just to stand still.


Don't let big numbers fool you. The oil business is all about staggeringly large numbers. Nobody knows what depletion rates are.

Take a look at the production graph from North Dakota. Study how cooperative the shales are to enhanced recovery. Look at rig counts. They just tripled the available oil inventory in the Williston Basin.
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Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby Pops » Mon 13 May 2013, 09:22:01

"Nobody knows what depletion rates are. "

And this proves what?

Take a look at the production graph from North Dakota.


Image

Take a look at what Mark Papa CEO of EOG, the largest producer of unconventional says,
We still are of the belief that total U.S. oil production growth that happened in 2012 was perhaps the peak that is going to occur.

That production growth was about 800,000 barrels of oil a day, and we expect that the total growth in 2013 to be less than that, and 2014 to be less than that. We're already seeing a lesser rate of growth in the Bakken. The Eagle Ford, of course, is still steaming ahead at a quite high rate of growth.

And so we believe that we're not going to see stupendous overall U.S. growth rates as we go forward.
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Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby veronicawilson235 » Fri 06 Sep 2013, 06:11:22

Largest oil fields in the world Based on estimated recoverable reserves

Out of top 5 Largest Oil Fields three are located in Persian Gulf in which two of them are owned by Saudi Arabia and other one by UAE. Brazil's Santos Basin and the Caspian Sea contain the other two giant oil fields


http://www.offshore-technology.com/feat ... -gulf-uae/
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Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby KingM » Fri 06 Sep 2013, 08:14:59

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Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby ROCKMAN » Fri 06 Sep 2013, 10:16:03

Pops – Again I compelled to point out some of the misused concepts some (not you, of course) have been using.

First: “"Nobody knows what depletion rates are. ". I’m sorry but depletion rates of all the wells on the planet are fairly well established. Be it a Bakken, Eagle Ford or a conventional oil well. There may be a range for the fractured shale reservoirs but they still exhibit a high decline rate by anyone’s measure. But I assume that statement wasn't referring to the depletion rate of wells but of the TRENDS. Trends don't have "depletion rates" per se. But they do have development rates and that's where we've seen production ramped up.

OTOH how much production comes from the unconventional TRENDS isn’t so much a function of decline rate but the exploration or development rate. And one more time: the Bakken, Eagle Ford Shale, Haynesville Shale et al are not fields…they are TRENDS. The Santos Basin off Brazil and the Caspian Sea are not FIELDS…they are TRENDS. There are unique conventional FIELDS in each of those TRENDS. And each of those FIELDS will have their own unique decline rates. How much oil is produced from each of these TRENDS will depend upon how rapid the exploration rate is conducted in each TREND. Greta FIELD is a 150 million bbl oil FIELD in Texas. Once discovered about 120 development wells were drilled into it. It exists in a TREND of similar fields that have produced over 4.5 billion bbls of oil.

There are separate defined FIELD areas within the Bakken TREND. There are no unique geologic FIELDS in the Eagle Ford Shale. There are dozens of different EFS FIELDS as designated by the TRRC but that has been done strictly on geography and not geology.

To the point: X billion bbls of oil have now been found in the Bakken and EFS TRENDS. How much oil is produced in either TREND in the future will depend upon the depletion rate of the existing wells and, more significantly, the exploration/development rate of additional drilling. A conventional FIELD, once developed, will continue to produce its reserves at some rate. Given the relatively low cost of producing a well its future production is little effected by oil prices. It also doesn’t require continuous drilling to maintain its production level.

OTOH the shale exploration/development rate is fully dependent upon two factors. The price of oil is one obvious factor. Existing unconventional wells, just like those in conventional FIELDS, can continue producing even at much lower oil prices. But many new unconventional wells won’t be drilled at those low prices. The second factor is the availability of drilling locations assuming oil prices support such efforts. This is the one area where the unconventional plays have the advantage. The Greta FIELD I mentioned earlier: it doesn’t matter how high oil prices go no more wells will be drilled in the FIELD because it has been completely drilled up…about 60 years ago. And what about other exploration targets in the Greta TREND? They exist but the potential is down to around 50k bo today and not 150 million bo. But the Bakken, EFS et al aren’t so restricted because they aren’t FIELDS but TRENDS. So as long as oil prices support the efforts and there are viable locations left to drill in these TRENDS we’ll keep adding production.

And IMHO that’s the key in understanding the difference between conventional fields and these unconventional trends. The existing conventional fields in the world have X billions of bbls of proven reserves. If oil prices drop significantly they’ll still have about the same proven reserves and will continue producing them. The unconventional oil TRENDS are estimated to have Y billions of bbls of oil. But should oil prices drop significantly much if not most of those Y billions of bbls of oil are no longer proven producible reserves.

And to me that’s the importance difference between our conventional existing producing and the unconventional trends: the lack of security in the new plays. If oil slides down to $70/bbl I doubt the production from Ghawar Field or any of our DW GOM oil FIELDS will alter much. But in the case of the Bakken, EFS and even the Canadian oil sands, can we say the same? The Greta FIELD I mentioned earlier: it produced with a ZERO % natural decline rate for 30 YEARS AFTER THE LAST WELL WAS DRILLED. Or to offer another metric: the conventional Greta FIELD produced 70 million bbls of oil before it began to decline. Will the Bakken or Eagle Ford wells produce for even 10 years at ZERO % DECLINE after the last well is drilled? Heck...they began declining the first few months they are produced.

Every chart predicting increased production from unconventional resources TRENDS assumes a sufficient price support…whether they state it or not. Which gets back to a point many others have made: the unconventional TRENDS are not going to bring us back to the days of “cheap oil”. Unfortunately the only thing that could probably do that is another major global recession.
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Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby veronicawilson235 » Thu 26 Sep 2013, 06:19:28

Think we also need to know about Largest offshore Oil fields while talking about Giant oil discoveries...

http://www.offshore-technology.com/features/feature-largest-oil-fields-world-gulf-uae/
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Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby ROCKMAN » Thu 26 Sep 2013, 08:43:47

Veronica - True. But a couple of the biggies mentioned are also oldies. As always difficult to know what KSA actual production numbers are but Safaniya may have had recoverable reserves of 36 billion bbls of oil when discovered. But the best guess on production today would indicate it’s about 50%+ depleted. But that still leaves a lot of oil which explains why the KSA is ramping up recovery efforts. Won’t be cheap: unlike the other big KSA fields this one produces from a sandstone reservoir and not carbonate. That has caused problems. The oil is also heavy which they have had problems marketing in the past. But the market place is shifting more to heavy these days because it has little choice. Same story for Zacum: cumulative production to date about 6.2 billion bbls of oil which still leaves it as the 7th in terms of remaining reserves.

Kashagan oil field is in class almost by itself. But not just in its size but also the difficulties and expense in its development. Production is just starting but will slowly be ramped up. But even at the projected final production rate of 400,000 bopd it will take over 200 years to produce its reserves. I would imagine if oil prices stay high they’ll do whatever they can to increase the production rate but at the moment there are no reports of such plans.

Which brings us back to the confusion at times over the significance of reserve numbers vs. production rates. Despite all the hype over shale plays and new discoveries it’s good to recall some facts that Kurt Cobb once offered: .The world’s 507 giant oil fields comprise a little over one percent of all oil fields, but produce 60 percent of current world supply (2005). A giant field is defined as having more than 500 million barrels of ultimately recoverable resources of conventional crude.

And therein falls the basic PO problem: we are living to a large degree on old fields which are impossible to replace as a whole. Kashagan Field is amazing in not only its size but the fact that it wasn’t discovered until 2000. But it has taken many tens of $billions and 12 years to develop and yet is expected to produce only a very small daily rate compared to its reserves. Similar to the situation with the huge reserves discovered in Brazil’s Deep Water: a lot of oil but will take huge investments over many years to get it to the surface. Even with $100/bbl oil it seems depletion and ELM are chipping away at production faster than new reserves can be brought on.
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Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby TheDude » Thu 26 Sep 2013, 20:57:32

Econ101 wrote:
seagypsy wrote:The beach on the Alaska north slope in 50 years?


That is an interesting picture. Oil development in the old days was very inefficient. Look at the spacing, now there would be at least 1/4 mile between rigs.

The derricks themselves look like they are used once and trashed. They are simple but its very wasteful and expensive to build so many when 1 could have drilled out that entire formation.

Obviously that oil was very shallow. Those drilling rigs dont look like they could do much. They are probably of the vinatage that pounded the bit rather than the unconventional rotating bit and the resulting production of the unconventional oil yet to come?


Actually that's the Huntington Beach Field in 1928, rotary drilling made its first big show at the beginning of the century at Spindletop; cable tool rigs were still in use in the US up to the 50s but as time went by they were used less and less by operators of note.

The wasteful drilling practices would persist for another decade after this picture was taken; East Texas famously has had some 33k wells drilled in it. By this point some quite deep wells had been drilled, too, and much of California's oil is quite heavy, not the easiest crude to extract, bordering on the "unconventional."
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Re: Today's giant new oil discoveries -- largest in 150 year

Unread postby AirlinePilot » Sat 28 Sep 2013, 13:27:34

What has become glaringly obvious to me is an entire ARMY of cornies has been created by the MSM from the complete lack of accuracy in reporting the realities of fracking and US production increases going forward. The Maguerri report seems to continue to provide a false sense of security for many who reject anything which does not support BAU.

When a CEO comes out and says what we all know its time to sit up and listen.
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