THE OPEC Thread pt 3 (merged) Archived

emersonbiggins · **Posted:** Wed Jun 11, 2008 11:11 am

You read that right, at least according to the press release below.

Personally, I can't wait for my 37-cent/gal gasoline!

Quote:

Nigeria: Opec Countries to Invest $160 Billion to Increase Oil Output

10 June 2008
Posted to the web 10 June 2008

Kunle Aderinokun
Abuja

Nigeria and the remaining 12 member countries of the Organisation of Petroleum Exporting Countries (OPEC) have concluded plans to commit more than $160 billion (about N19.20 trillion) into crude oil capacity expansion programmes, which are expected to yield additional 500 million barrels per day (bpd) of crude oil to world's production by 2012.

Also, President Umaru Musa Yar'Adua yesterday bemoaned the level of poverty in Africa, describing it as unacceptable, calling on the leadership in the continent to work assiduously to halve poverty by 2015 with a view to assuaging the suffering of the people.

Addressing participants at a workshop on "Energy Poverty in Africa" yesterday in Abuja, OPEC Secretary General, Abdalla Salem El-Badri, explained that the expansion programme became necessary because of the rising crude oil prices
...

link

Just think, the world awash in 585 million barrels a day!

emersonbiggins · **Posted:** Wed Jun 11, 2008 11:16 am

FYI, the typo should read 5 million BPD.

Cashmere · **Joined:** Thu Mar 27, 2008 12:00 am **Posts:** 1925

So let's do the math. 5 million barrels a day at 140$ per barrel is . . . 700,000,000$ per day.
Or, 21.7 billion dollars a month.
or, 260 Billion per year, before costs.

They can't make up any lies better than that? Please. If you're talking about less than 1 year to make back your investment and then more than 100% a year profit thereafter, they would have done it long ago. But the can't. So they won't.

socrates1fan · **Joined:** Wed Jun 04, 2008 12:00 am **Posts:** 281

This isn't even realistic.
Who are they trying to kid?
Even if this was possible we would lose the fuel we have way faster than before.
I hope Obama is elected because I find his thoughts on energy to be quiet good!
If gas is 36 cents a gallon we will without doubt end in collapse.
People need to wean off and become independant not dependant on oil.
This will also increase global pollution and problems with sprawl and bix cars.
OPEC is spilling lies out of their mouths.

seahorse2 · **Joined:** Mon Oct 18, 2004 12:00 am **Posts:** 2062

I think the article I'm linking is a good indicator that the world has reached or close to reaching the infamous "crossover" event which is that point in time when oil pricing power shifts back to Opec. Technically, the "crossover" event is when Opec production exceeds nonopec, but the real power is pricing power. So, when Opec realizes it has the rest of the world by their economic nuts, that's real power.

This article shows some in Saudi are realizing they have the rest of the world by their economic nuts. The only question is, how hard will they squeeze.

Quote:

Saudi Arabia might soon be just plain old Arabia. When that comes to pass, $150 oil will look cheap indeed.

Influential members of the nation's political ranks are calling for cuts in oil production, not increases as the U.S. has asked for.

"The price of oil under ground is actually higher than its current market price because it will become a unique commodity by time and demand will continue to rise because of a steady growth in the world's population," Marri told Alriyadh.

"The level of oil production in Saudi Arabia must be linked to the country's actual development and financial needs not to market prices and the need of foreign consumer. It is not wise to sap this resource just to satisfy the demand of foreign markets. Therefore, we need to revise our oil production policy before it is too late. Preserving our oil reserves is better than investing our financial surpluses which could lead to inflation."

You see, some Saudi's are smart enough to prefer to hold their oil in the ground, rather than worthless paper currencies in the bank. If the Crown Prince does not handle this astutely, he might meet his own end at the wrong end of a sword. For years, no soul living in the Kingdom, or the Oil dependent West, was willing to state the obvious - "The Emporer Has No Clothes" - THERE IS NO REPLACEMENT FOR OIL. That the West's silly claim - "if Oil went too high the efficient markets would bring on alternatives to Oil" - was some EXCELLENT propaganda but when put to the test failed quickly and utterly.

(The funny thing is, I will STILL get 3 calls this week from friends and clients about something they saw on T.V. proclaiming a car that runs on water and gets 35 miles to gallon and goes from 0 to 60 in 6.3 seconds and has a chick magnet bigger than yours... and then I have to pop their bubble with: "Well, if that's true, why didn't oil fall to ZERO in the markets today?")

Sorry, I am back. Saudi Arabia, perhaps soon just Arabia, holds the world's economy in its hands. When, not if, the House of Saud falls, no one will hold what is left of the world's economy in its hands.

Mentatt (at) yahoo (d0t) com

Blog

Rage · **Joined:** Tue May 06, 2008 12:00 am **Posts:** 25

Uhhhhhh...... I think you guys are kinda missing the point.....

emersonbiggins · **Posted:** Wed Jun 11, 2008 12:13 pm

{please take all gay-marriage related discussion to Off-topic split from OPEC to spend $160B... - emersonbiggins}

SILENTTODD · **Posted:** Wed Jun 11, 2008 12:13 pm

emersonbiggins wrote:

(Personally, I can't wait for my 37-cent/gal gasoline!)

37 cents?! I'm holding out for 25 cents a gallon like it was in 1971 when I started driving!

Dezakin · **Joined:** Wed Feb 09, 2005 1:00 am **Posts:** 1430

Cashmere wrote:

So let's do the math. 5 million barrels a day at 140$ per barrel is . . . 700,000,000$ per day.
Or, 21.7 billion dollars a month.
or, 260 Billion per year, before costs.
They can't make up any lies better than that? Please. If you're talking about less than 1 year to make back your investment and then more than 100% a year profit thereafter, they would have done it long ago.

Long ago the price of oil was $20/bbl and was the target price of OPEC. The goal of OPEC is to restrict supply such that their target price was met without killing the golden goose. Now that OPEC sees the global economy still functioningat $80/bbl but starting to wimper at $120/bbl, they want to control prices within this gap

Of course they run into the problem that they wont control the global liquid fuel markets the way they did when their target price was $20/bbl simply because at $40/bbl you can profitably turn coal into liquid fuels.

Now we would have built giant CTL plants 'long ago' if the stable price of oil was above $40/bbl for decades, but seeing everyone remembered the asian financial crisis, no one wanted to be hit with production costs that high in the face of collapsed demand again. Its just starting to appear that this demand isn't going to collapse even with a global recession, but still people are reluctant to invest more than a few billion a year on fuel production that has production costs significantly above $20/bbl.

TheDude · **Posted:** Wed Jun 11, 2008 1:44 pm

Hirsch suggests 5mb/d CTL in a 10 year crash program. I see an estimate for Schweitzer's Montana CTL program at 1.3-2 billion for 22 kbpd. That's a hefty bill. Like Petrobras mucking around with shale I can see this being a profitable sideline on a small scale, but it'd take some serious political will to turn it into anything meanful.

FuturePundit: First US Coal To Liquid Plant Coming - July 2006.

Capito introduces bill that requires coal -produced fuel - six days ago.

Quote:

Capito announced last week in Charleston that she would be introducing the bill when Congress reconvened after the Memorial Day recess. It mandates the production of 6 billion gallons of coal-derived fuel annually by 2022.

"The worldwide demand for energy is enormous," said Capito. "We've got to have true energy independence and we should be using American sources of energy. Coal is one of our most abundant resources, and any comprehensive energy policy must include coal.

391,389 kboe/d?

Dezakin · **Joined:** Wed Feb 09, 2005 1:00 am **Posts:** 1430

TheDude wrote:

Hirsch suggests 5mb/d CTL in a 10 year crash program. I see an estimate for Schweitzer's Montana CTL program at 1.3-2 billion for 22 kbpd. That's a hefty bill. Like Petrobras mucking around with shale I can see this being a profitable sideline on a small scale, but it'd take some serious political will to turn it into anything meanful.

I suspect the turning point will be when the production cost of new conventional oil plays get to be higher than production cost of CTL.

Which is why I doubt Colorado shale oil (which I used to be optimistic on) will ever be developed. Its cheaper to turn coal into gasoline. It might even be cheaper to turn limestone and water into gasoline.

TheDude · **Posted:** Wed Jun 11, 2008 3:24 pm

Or you could go GTL using geopressured NG. Long as you're aiming high.

Are you counting UDW and polar as conventional? Seems like that's all that's on the board at the moment in re: giant fields.

Agree about oil shale. Should be amusing to see that brought up in Congress in the middle of a severe SW US water shortage. Or maybe they won't connect the dots, wouldn't be surprising...

Dezakin · **Joined:** Wed Feb 09, 2005 1:00 am **Posts:** 1430

TheDude wrote:

Or you could go GTL using geopressured NG. Long as you're aiming high.

Are you counting UDW and polar as conventional? Seems like that's all that's on the board at the moment in re: giant fields.

Sure. Its the same sort of suck the juice through the straw mechanics that big oil companies understand. Its getting harder and more expensive, but its not the same game as CTL. Once production costs of new crude are the same as CTL, tar sands, shale oil or whatever is the next rung on the ladder I'm pretty sure we'll start to see a tidal wave in capital investments.

Quote:

Agree about oil shale. Should be amusing to see that brought up in Congress in the middle of a severe SW US water shortage. Or maybe they won't connect the dots, wouldn't be surprising...

Hey, I could be wrong about shale if they manage somehow to bring production costs below CTL, somehow. I'm just pessimistic about that because CTL is obvious and transparent in how much the capital costs. You ship the coal to a synfuel plant instead of a power plant.

qwanta · **Joined:** Tue Mar 08, 2005 1:00 am **Posts:** 112

500million bpd, wow! I'd hate to see what the impact of a 6-7 fold increase in oil consumption would do to global warming :-D

mos6507 · **Posted:** Thu Jun 12, 2008 12:39 pm

qwanta wrote:

500million bpd, wow! I'd hate to see what the impact of a 6-7 fold increase in oil consumption would do to global warming :-D

That's why we have threads like "do you want peak oil to happen". We are damned if we do, damned if we don't. The only reason I want oil to hang around a little longer is to allow me to finish my preps. Then it's in the best long term interest of the world for it to decline because it doesn't look like we'll do it voluntarily.

THE OPEC Thread pt 3 (merged) Archived

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