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Countries keeping oil for themselves?

For discussions of events and conditions not necessarily related to Peak Oil.

Countries keeping oil for themselves?

Unread postby BigBear » Sat 23 Apr 2005, 13:08:22

I have been studying this issue of Peak Oil for two years now in order to come to some clear concensus of approx. when it will occur and the aftershocks of it's occurance.
Two things that I personally have not seen brought up in any discussion on this issue--regardless of who is discussing the subject are:
1) It appears that there is an assumption that every producing country will produce , for world sale, every drop of oil that they possibly can. What if they do not--and why should they--saving enough to last their people many years of going without and not having to pay out large sums of money to others--makes very good sence--something I believe more and more Russia has foreseen--hence keeping it's major remaining fields away from outside interference. I would add Norway here also.
2) Heavy crude only gives us 60% of the necessary products we seek from oil as light sweet crude does. Plus it requires special refineries that right now are few and far between. So not only will the amount of oil available to the world market shrink each year but the necessary products obtained from that same oil will be much less--therefore compounding the problems ever more serverely.
Any thoughts on this......
Last edited by Ferretlover on Sun 27 Mar 2011, 22:13:18, edited 1 time in total.
Reason: Title clarified.
What is more desirable than something so rare
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Unread postby Jack » Sat 23 Apr 2005, 13:49:56

Good points!

Regarding item (1) - it would probably be wise for countries to hold onto their oil, but keep in mind that the countries with lots of oil tend to have large, growing, poor populations. Selling oil today means additional food - or, at least, sufficient food to stave off starvation. It means hospitals. It means toys for the ruling elite. Not selling it may mean a better tomorrow - but that takes a degree of discipline I don't see very often.

Take the US and ANWR as an example. Will we keep it all for ourselves? Probably not. I'm under the impression that most of it is contracted to go to Japan. And we're under contract to sell natural gas to Mexico, even though we're coming up short. Canada has the same sort of arrangement with the U.S.

No, I think every country will sell every drop they can get their hands on until the very end.

Regarding item (2) - good point. I suspect that even here, we expect the downside of the peak to be symmetric with the upside. It probably won't be. So, in essence, you're saying that the downward slope will be worse than expected.
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Unread postby RonMN » Sat 23 Apr 2005, 13:51:41

I agree on both points. If i was an oil producer i would (most likely) lower production right now in anticipation of higher prices or saving it for myself & my people...

Next, heavy crude ain't cuttin' the mustard as it is...it will take alot of work to make heavy crude into more useful items.

But neither will matter if it's a quick crash scenerio...If the stock market opens on monday morning & the price of oil shoots to $350 in 1 hour (as unlikely as that may be) then the big crash has already begun!
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Unread postby uNkNowN ElEmEnt » Sat 23 Apr 2005, 13:57:18

As far as #1 goes even if some country were to put its people ahead of its self you would likely see some unseen forces topple their government and try to put a more pro-western person who would go along with the IMF and sell their gas stocks.

The biggest thing that pisses everyone off about Venezuela is that the government cut off the wealthy elites monopoly of many items and started doing things for its people.

I think the only reason they haven't assassinated Chavez (though there have been plots and attempts to get him out of power) is 1)luck 2)good intel and 3) he hasn't actually cut off gas to the US. but you can bet they hate his high handed ways of threatening to cut the gas off if they try to overthrow him again. :-D GO Chavez GO!
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Unread postby bantri » Sat 23 Apr 2005, 14:38:31

Jack wrote:Regarding item (2) - good point. I suspect that even here, we expect the downside of the peak to be symmetric with the upside. It probably won't be. So, in essence, you're saying that the downward slope will be worse than expected.


Exactly my thoughts...
I posted some links to graphs that consider exactly this on the depletion modeling... :roll:

http://www.peakoil.com/fortopic3716.html
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Unread postby smiley » Sat 23 Apr 2005, 14:55:46

Regarding point 1). This discussion has been held in the Brazilian congress last year. The two options were

a) Produce flat out and peak within the next few years.
b) Cap the production at current levels, which can be sustained for the next 10 years.

They chose for option b. I'll try to look up the original article in Rigzone.
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Re: Countries keeping oil for themselves?

Unread postby ROCKMAN » Thu 07 Nov 2013, 20:24:33

T - Not sure what the "bump" means but I had to smile when I read the previous post from '05:

"Regarding point 1). This discussion has been held in the Brazilian congress last year. The two options were

a) Produce flat out and peak within the next few years.
b) Cap the production at current levels, which can be sustained for the next 10 years.

They chose for option b. I'll try to look up the original article in Rigzone."

Obviously these folks have zero understanding of the timeline to develop any new oil play let alone in the Deep Water. Consider the DW GOM in water depths of 1,000'+: 27 years ago the DW GOM was producing about 10-20 million bbls of oil per year. Today the trend has reached 380-450 million bbls of oil per year. Production appears to have just plateaud for the last 8 years or so and shows no sing of moving beyond a peak yet. And they envisioned the potential peak of DW Brazil within a few years? That's great...I needed a good laugh today. Given the 5 to 10 years before a typical DW field begins producing it will be decades before the trend reaches it's PO. They just discovered 13 new fields last year. I imagine the Brazilian congress must be really pissed with the slow progress.
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Re: Countries keeping oil for themselves?

Unread postby ralfy » Thu 07 Nov 2013, 21:31:30

Usually, there's no "we" in this issue, as oil producers sell to the highest bidders.
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Re: Countries keeping oil for themselves?

Unread postby dolanbaker » Sat 09 Nov 2013, 15:47:26

I was under the impression that it wasn't a case of countries "keeping the oil for themselves" rather is is more likely that China has prepaid for oil yet to be extracted thus keeping it for themselves.

So the oil never reaches the open market, it goes directly to China (and doesn't collect £200 on the way).
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Re: Countries keeping oil for themselves?

Unread postby ROCKMAN » Sat 09 Nov 2013, 16:34:54

The one semi-keeping the oil for themselves aspect are the refinery JV's built in the exporting countries. Of course if the oil were still exported a certain amount of the products would be shipped back to the oil exporter so there's a net decrease even today. But if their new internal produced projects are cheaper that takes some of the demand to sell more oil to pay for product imports. But my guess is this won't be a huge factor. The key for a country like the KSA will be to develop an economy less dependent on oil export revenue or decreasing internal consumption. And maybe both.
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