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Page added on June 26, 2014

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BP’s Technology Chief ‘knocks peak oil theory’

BP’s Technology Chief ‘knocks peak oil theory’ thumbnail
Advances in technology will continue to ensure that there are adequate reserves of oil and gas, as fears over supply recede, according to BP’s head of technology, David Eyton.

Addressing the 21st World Petroleum Congress in Moscow, Eyton said that generally speaking the theory of peak oil has had its time.

There may be other reasons for demand declines, but technology has enabled an increase in reserves.

The industry has an excellent track record to increase production and replace reserves, enabled by a sustained high oil price and technology developments over the last 30 years, he said.

The potential to enhance oil recovery from reservoirs is very significant, he said, adding that the average oil recovery rate from reserves in the world today is estimated about 35%.

“You heard people here talking about 65% or higher, even 70% in the Middle East. These are enormous increases,” he said.

Citing BP’s Energy Outlook 2035, Eyton said oil demand will grow by about 1.5% per year, or 41% in total between 2012 and 2035.

Technology has a significant role to play to ensure the safe production of hydrocarbons, economical access to new resources economically and more efficient use of energy, he added.

Eyton said that 1.6 trillion barrels of oil and gas equivalent has been produced, with a further 2.9 trillion of recognised recoverable resources available today.

The application of best available technologies today can increase the remaining recoverable resource base by almost a factor of two, he contended.

The potential for enhanced oil recovery from known hydrocarbon resources exceeds the potential from new discoveries such as those from Arctic or ultra-deepwater areas, Eyton said.

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21 Comments on "BP’s Technology Chief ‘knocks peak oil theory’"

  1. Plantagenet on Thu, 26th Jun 2014 9:57 am 

    Peak Oil isn’t about reserves. Its about the OIL PRODUCTION RATE. Yes, the amount of recoverable reserves is large—but NO— these can’t be produced cheaply or at ever increasing rates.

  2. J-Gav on Thu, 26th Jun 2014 9:58 am 

    Enhanced oil recovery is one thing. Ability for prospective clients to pay is another.

  3. keith on Thu, 26th Jun 2014 10:04 am 

    “Eyton said that 1.6 trillion barrels of oil and gas equivalent has been produced”

    1.6 trillion barrels has not been produced, it has been recovered and used. Civilization began 3000 or 4000 years ago? Will we have oil in 100 years? Will we have a habitable planet in 100 years? We are short sighted animals.

  4. J-Gav on Thu, 26th Jun 2014 10:37 am 

    Keith- Very short-sighted indeed! It seems, according to various studies, that discounting the future is hard-wired into our nature.

    Here are a couple:

    http://www.theoildrum.com/node/2592

    http://www.peakprosperity.com/blog/dan-ariely-decodes-why-humans-are-hard-wired-inflate/50338

  5. Dave Thompson on Thu, 26th Jun 2014 11:50 am 

    Eyton has got to know the situation we are in and the ramifications. So Eyton gets up on his soap box and lies to the masses. BAU.

  6. bobinget on Thu, 26th Jun 2014 12:59 pm 

    The future of petroleum extraction could be typified by a few single words; unusual, extraordinary, costly,
    complicated, involved, perilous. (wildcat).

    IF either Mideast and African oil fields go ‘off line’ for
    indefinite periods, industry, military, will come to be more reliant on ultra deep water, E&P, quick fixes.
    This, naturally will be the cause of multiple environmental ‘incidents’ further diminishing fisheries.

    Canadian oil sands production will be required in Eastern Canada ASP, kicking off distrust on both sides of the US/Canadian border.

    It’s often remarked petroleum is ‘fungible’. I’m saying
    that period where oil, (was) the most frequently traded
    commodity will be replaced by neo-petro-nationalism in the extremist. No longer will oil wars have cute hidden agenda names like “Desert Storm”. No longer will we question slogans like “No Blood For Oil”. It will be taken for granted, otherwise unemployed young need to do the bleeding, for oil.

    Other then that, sure, peak oil is a dead letter.

  7. Northwest Resident on Thu, 26th Jun 2014 1:07 pm 

    Eyton sounds a lot like Baghdad Bob, proclaiming the “mother of all victories” the day before Iraqi forces were bombed to smithereens.

  8. shortonoil on Thu, 26th Jun 2014 1:09 pm 

    “Advances in technology will continue to ensure that there are adequate reserves of oil and gas, as fears over supply recede, according to BP’s head of technology,”

    It looks like he forgot to mention anything about the 60+ year age of the handful of fields that supply 60% of the world’s oil. Must have slipped his mind? Of course they can apply EOR and get maybe another 3 or 4 more Gb out of them. At $150 to $200/barrel. Yep, the world is swimming in oil. Without well developed PR programs, Joe Six would be clueless!

    “The potential to enhance oil recovery from reservoirs is very significant, he said, adding that the average oil recovery rate from reserves in the world today is estimated about 35%.”

    A 35% recovery rate was what it was for US fields in 1930, and still is. The recovery rate is determined by the permeability of the strata from which the oil is extracted. Ghawar, and some other Middle Eastern fields may hit 50%, but all, and all EOR ( which is very, very expensive) is generally increasing recovery rates by 2 to 5%. The purpose of this diatribe is to keep the masses using oil, and keep BP stock prices up. They haven’t been fairing so well of late.

    http://www.thehillsgroup.org/

  9. hculliton on Thu, 26th Jun 2014 1:09 pm 

    Being BP’s head geek, calling Eyton biased is a bit of an understatement. Of course anything he says will be “double-plus-good” in favour of the status quo so it’s really a waste of time critiquing this Beyond Toilet Paper tripe.

  10. Northwest Resident on Thu, 26th Jun 2014 1:18 pm 

    Fred Hoyle (1915-2001, UK) Sir Fred Hoyle in 1963 gave a series of lectures wherein he stated:

    It has often been said that, if the human species fails to make a go of it here on the Earth, some other species will take over the running. In the sense of developing intelligence this is not correct. We have, or soon will have, exhausted the necessary physical prerequisites so far as the planet is concerned. With coal gone, oil gone, high-grade metallic ores gone, no species however competent can make the long climb from primitive conditions to high-level technology. This is a one-shot affair. If we fail, this planetary system fails so far as intelligence is concerned.… (p. 64)

    If the world population is not stabilized… nothing but pain and grief will follow. The future will then indeed be based on our cries of agony. (p. 69)

    Compare Sir Fred Hoyle’s rational and deeply thoughtful analysis to the cheerleading “rah rah rah” being spouted by Eyton. In our world, today, there is a huge divide between reality and what those who refuse to deal with reality like to portray AS reality.

  11. rockman on Thu, 26th Jun 2014 2:26 pm 

    Again half truths: “…but technology has enabled an increase in reserves.” True…over the last 30 years or so. Not true: technology didn’t increase oil production the last 6 years or so…high prices did it. Despite the constant hype about tech saving us there nothing in my part of the oil patch that has signing improved the exploration on new reserves or the secondary recovery of proven but stranded reserves. Lots of tweaking around the edges for sure. I live and breath exploration, drilling, production and EOR daily. My financial security depends upon it. But nothing close to a step change has happened for about 20 years.

    All the drilling and EOR projects I’m current involved with is happening strictly because of the price of oil. Neither my projects or the hale drilling would be happening to any significant degree if oil were selling or less then $40/bbl. And that is the essence of “PO”… not reserves in the ground and neither global production. It’s the economic impact IMHO.

  12. HARM on Thu, 26th Jun 2014 3:38 pm 

    “…technology has enabled an increase in reserves”

    Wrong. Technology has enabled an increase in economically recoverable reserves. It has not added a single drop of oil in the ground that was not already there.

    “The industry has an excellent track record to increase production and replace reserves, enabled by a sustained high oil price and technology developments over the last 30 years, he said.”

    Again, more cornucopian techno-babble. Oil extraction does not “produce” or “replace” oil reserves, it simply extracts what’s already there. Persistently higher oil prices have made some marginal fields economically viable, and better technology has improved recovery rates, yes. But higher prices have also badly hurt the poor and third world, who depend on cheap easily extracted oil.

    “Technology has a significant role to play to ensure the safe production of hydrocarbons, economical access to new resources economically and more efficient use of energy, he added.”

    We’re more efficient at burning fossil fuels today than we were 40 years ago, yes, but… Jevon’s Paradox. And I wouldn’t call our production or use of hydrocarbons today “safe” when we are looking at rising sea levels, collapsing ice sheets and glaciers, desertification, plastic crap in the oceans, and mass die-offs of other species happening on most continents.

  13. J-Gav on Thu, 26th Jun 2014 4:31 pm 

    Short – Yup, what they ‘forget to mention’ is usually more important than what they actually talk about … Interesting, isn’t it?

  14. DMyers on Thu, 26th Jun 2014 10:03 pm 

    I have go agree with the general sentiment above, that technology does not create new resources but might, at times, improve access to existing resources. The technology fix is a huge oversell. There is no more than there is.

  15. Musher on Thu, 26th Jun 2014 10:40 pm 

    The article is missing one important consideration, cost ( EROEI or “net” return). Extracting a million barrels of oil and turning it into a marketable product is of little or no value if it takes the equivalent of a million barrels of investment to accomplish the task. In the early days of oil development returns of 100-to-1 were common. Indeed, a return of 5-to-1 is about as low a return as most investors can support. Oil production is a notoriously chancy undertaking, so it must promise substantial returns to draw investors.

  16. JV on Fri, 27th Jun 2014 12:30 am 

    As you all know BP Amoco doesn’t stand for British Petroleum anymore.

    The fact U.S tight oil and gas and Canadian tar sands are being extensively developed means production from North American conventional oil fields is stagnant or declining. Similarly, water injection in Middle East fields is needed just to hold current production levels.

  17. rockman on Fri, 27th Jun 2014 5:51 am 

    Musher – A valid point. But more to the point: PO is about production rates and not recoverable reserves or return on investments. I’ve studied the details of dozens of EOR projects over the last 40 years. And some were very profitable and added significantly to the ultimate recoverable. But not a single one of them added a significant increase in production rate. Higher oil prices will lead to higher recoverable volumes…over a very long period of time. No EOR technology is going to take a field that has declined from 50,000 bopd to 500 bopd and return it to its former glory. More likely to bump it up to 1,000 to 1,500 bopd…if it is really successful. It would certainly help…a little.

  18. ronpatterson on Fri, 27th Jun 2014 6:49 am 

    ““You heard people here talking about 65% or higher, even 70% in the Middle East. These are enormous increases,” he said.”

    I have hear talk in the Middle East of even higher recovery rates. But as long as we are talking, hell let’s talk 100% recovery rates. Talk being as cheap as it is, we may as well get 100% of the oil out.

  19. rockman on Fri, 27th Jun 2014 9:26 am 

    Ron – As they say: Never say never. Ghawar wells that came on at 5,000 bopd might see much higher recoveries over the next decades. But it won’t be at 5,000 bopd/well. It will continue to be a small fraction of that rate in the form of oil stained salt water. Oil stained salt water that will require sustained high oil prices to continue to be produced.

    But you already knew that. LOL.

  20. Bob Kraus on Fri, 27th Jun 2014 10:42 am 

    This story is interesting from another point of view: Namely it is completely at odds with opinions coming from other big oil execs. For instance, the retired CEO of Shell who predicts flatout that within two years the world will not be able to produce enough oil to meet demand. The clash of the titans!

  21. Nony on Fri, 27th Jun 2014 4:16 pm 

    supply and demand always meet.

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