[Pops]

kublikhan asks

How many more giant oil discoveries do you think will be made in say, the next 2 decades? Not old discoveries that are now economical like Bakken. And not kerogen like Green River, but actual oil. Like how many more Lula(Tupi) oil fields do you think we will be finding in the next few decades?

[Plantagenet]

I can think of four new areas that will probably yield up some more giant fields:

(1) Tight oil in China, South America, Russia etc. Thanks to horizontal drilling and frakking, there could be major discoveries in these regions

(2) Deepwater targets. The "sub-salt" off Brazil may have major resources. But there are also "sub-salt" sediments off northern So. America, off Africa, and even in the Gulf of Mexico. Could be some giant fields down there. Other deepwater targets will also likely exist

(3) Arctic Ocean. Exploration is just starting. Given the known oil province in northern Alaska, it seems likely more giant fields will be found there and elsewhere in the Arctic Ocean.

(4) Deeper in the Williston Basin and elsewhere in other north American basins. The obama administration just announced that the Williston basin contains twice as much oil ---7.4 BILLION bbls---then the previously thought, partially because a shale just below the Bakken also contains oil. But there are multiple shales present below the Bakken----each of them may have oil. Similarly in Texas, the Eagle Ford has turned into a giant oil field---but there are other shales that may also be giant fields. One of these---the Spraberry/Wolfcap Shale, may have 50 BILLION bbls.

[Pops]

Here is the familiar Growing Gap plot, this one is updated to 2011, I found it at DoTheMath



Here is a logistics curve from the same blog

For global oil resources (all liquids), we have consumed 1.2 trillion barrels so far. The data did not follow a logistic path in its early years, but has done so for the past three decades. If this portion is predictive, it says that our total resource is about 2.4 trillion barrels, putting us half-way along (therefore around the peak of the logistic rate). This by itself is a weak prediction. But the discovery rate we have seen (peaking in the 1960′s) does not lay the groundwork for us to expect a radical departure from the logistic line any time soon.

Ibid

.

[Plantagenet]

Here is the familiar Growing Gap plot, this one is updated to 2011, I found it at DoTheMath

Yes. I started a thread a while back on just this topic. Graphs like the one above show only CONVENTIONAL oil. They don't show the new discoveries of UNCONVENTIONAL oil.

The 7.4 BILLION in the Bakken and the 3 BILLION in the Eagle Ford and the 15 (?) BILLION in the Monterey Shale and the 50 (?!?) BILLION in the Wolfcap are big enough to create a big bump on the end of the falling discovery curve. The new tight oil discoveries are real---they should be counted and shown.

[Pops]

I really should be doing something productive... but since I'm not:

Released: 6/18/2012

The U.S. Geological Survey has released a new global estimate for potential additions to oil and gas reserves due to reserve growth in discovered fields outside the United States. The USGS estimates that the mean undiscovered, conventional reserve additions in the world total 665 billion barrels of oil (bbo), 1,429 trillion cubic feet (tcf) of natural gas, and 16 billion barrels of natural gas liquids.

usgs-releases-global-oil-gas-reserve-growth-estimates-t65470.html

(April 18, 2012)

The agency estimated mean volumes of 565 billion barrels of undiscovered conventional oil, 5,606 trillion cubic feet of undiscovered conventional natural gas and 166,668 million barrels of natural gas liquids in 171 priority geologic provinces of the world – exclusive of the United States.

http://www.usgs.gov/newsroom/article.as ... -UOHReOBXs


Add those 2 forecasts put out last year together and it works out to exactly the 1.2 trillion predicted by the logistic curve Murphy did in 2011!

About 400B more than Campbell and Laherrère came up with back in '97, btw.

[ROCKMAN]

Pops - Thanks for pissing away more time for our benefit. LOL. But here's the critical factor I tend to bitch about: what is the price platform used to estimate those reserve numbers? Is it $100/bbl? $65/bbl? $140/bbl? As I've said before every projection has to be based upon some price assumption along with all the other assumptions. How accurate that price assumption proves to be will have a major impact on how much reserves developed. I doubt anyone making such projection in 1997 had predicted $100+/bbl in 2012. If they had I suspect everyone on this site would have mocked them. Just as most here would mock anyone that predicted $65/bbl oil in 2016. OTOH how much of those US reserves be developed at $65/bbl? Not predicting…just asking.

[John_A]

kublikhan asks

How many more giant oil discoveries do you think will be made in say, the next 2 decades? Not old discoveries that are now economical like Bakken. And not kerogen like Green River, but actual oil. Like how many more Lula(Tupi) oil fields do you think we will be finding in the next few decades?

Looks like the scientists have answered this question just last year.

565 billion barrels and 5605 TCF.

http://pubs.usgs.gov/fs/2012/3042/

[Pops]

It definitely is a moving target, ROCK.

In addition to the problem of economic reserves I read a few days ago about the rules were relaxed in reporting reserves so that areas beyond one typical well spacing can be included in reserves. I'm vague on this and I can't find the doggone link.

[John_A]

Add those 2 forecasts put out last year together and it works out to exactly the 1.2 trillion predicted by the logistic curve Murphy did in 2011!

About 400B more than Campbell and Laherrère came up with back in '97, btw.

The difference being that Murphy is predicting an ultimate recovery for producing and known fields, whereas the USGS work is in addition to "discovered" reserves. So you take Murphy's estimate of total recoverable for existing, add that to the geologically based estimate from the two reports you referenced at 1.2 trillion, and the answer sits somewhere solidly in the 3's somewhere. So the total of discovered plus "yet to find" is 1+ trillion more than Murphy, which would put it 1.5 trillion+ higher than Campbell and Laherrere.

[John_A]

I really should be doing something productive... but since I'm not:


usgs-releases-global-oil-gas-reserve-growth-estimates-t65470.html

http://www.usgs.gov/newsroom/article.as ... -UOHReOBXs


Add those 2 forecasts put out last year together and it works out to exactly the 1.2 trillion predicted by the logistic curve Murphy did in 2011!

About 400B more than Campbell and Laherrère came up with back in '97, btw.

Oh, and neither of those estimates included this 500 billions. So the total amount might stand somewhere near 4 trillion perhaps?

http://www.usgs.gov/newsroom/article.asp?ID=2386

So the Survey has "found" more oil than has been produced to date. Them boys and girls sure been busy!

[Pops]

The difference being that Murphy is predicting an ultimate recovery for producing and known fields, whereas the USGS work is in addition to "discovered" reserves. So you take Murphy's estimate of total recoverable for existing, add that to the geologically based estimate from the two reports you referenced at 1.2 trillion, and the answer sits somewhere solidly in the 3's somewhere. So the total of discovered plus "yet to find" is 1+ trillion more than Murphy, which would put it 1.5 trillion+ higher than Campbell and Laherrere.

What?

Read the quote from Murphy:

For global oil resources (all liquids), we have consumed 1.2 trillion barrels so far. The data did not follow a logistic path in its early years, but has done so for the past three decades. If this portion is predictive, it says that our total resource is about 2.4 trillion barrels,

Since you didn't read the link, I went and copied a further explanation just for you:

If for each year, we plot the amount of resource produced in that year as a fraction of the total resource extracted to date against the total extracted resource, a logistic function makes a straight, descending line intercepting the horizontal axis at the value of the ultimate resource.

It is not based on ""discovered" reserves" but is a prediction of the ultimate recoverable resource based on past production, it includes past discoveries, past production, current production, future production, reserve growth, new discoveries, new technology and whatever else, that's why its called "total resource".

.

[ROCKMAN]

Pops – Here you go. The SEC has loosened up the rules. A lot of fudge room IMHO.
http://www.haynesboone.com/files/Public ... -26-09.pdf
And again, I’ll bore everyone by repeating myself: debating anyone’s reserve estimates seems rather pointless if they don’t 1) define how the classify “reserves” and 2) most importantly, don’t clearly state what price assumption are behind their estimate. I can offer a reserve estimate for the Bakken at 2 billion bbls and 8 billion bbls and both numbers are just as valid…depending on exactly what prices assumption I use. Predicting the future production from any trend is more dependent upon pricing then geology or engineering. Any guess as to the future production is a guess about future oil/NG prices whether the person making the call realizes it or not.

I try not to be rude but anyone who thinks we would even be discussing the Bakken today let alone see the production increase from the trend if oil were still selling for $25/bbl as it was in 2002 isn’t worth responding to IMHO. There was a reason there was no drilling boom in the Bakken or Eagle Ford just 11 years. And it the same reason we see the boom in those trends today: the price of oil. And to grind salt into the wound let’s talk NG: in the summer of ’08 NG prices reached $12/mcf and produced a boom in shale gas drilling. And then just 12 months later prices fell to $2.50/mcf and the rig count drilling for NG fell 75%. I’m not sure if I’ve mentioned it here or not but I was on contract with Devon working for the drilling dept. that handled their shale gas drilling program. The had 18 drilling rigs running in the E Texas shales and within 6 months they dropped 14 of those rigs and PAID $40 MILLION in cancellation penalties to drop those rigs. They paid $40 MILLION to not drill any more shale gas wells with those rigs.

I cannot fathom how anyone can believe that drilling activity, and thus the development of reserves, is not dependent on the price of oil/NG.

[ralfy]

Related:

"What determines energy abundance? Flow."

http://www.csmonitor.com/Environment/En ... dance-Flow

[Pops]

Thanks ROCK, that's the clearest outline of the new rules I've seen.
No argument about price before production, that is the main thing to remember about the USGS estimates above, they are based on technically recoverable oil which may or may never be economical.

The Lula (tupi) for example, potentially has lots of oil but I have no idea how much the rigs cost to drill in water that deep.

Thanks for that Ralfy, I like Cobb and it's good to see he's blooging for CSM.

[ROCKMAN]

Pops - Driving in this morning I figured I should state the obvious: the USGS has greatly downgraded the oil potential of the Bakken trend. What!!! That's ridiculous!!! LOL.

I posted the links a while ago so I won't bother...it takes a 15 second net search to pull up all the history. Over 30 years ago geologists were tagging the Bakken potential at 30 to 100 billion bbls of oil. I can only assume that with the new info coming out of the Bakken trend the USGS saw fit to reduce those earlier estimates by 30% to 90%. I wouldn’t be too tough on those old geologists. It’s difficult for us to not get caught up in the hype. Remember what it was like during that oil price spike in the late 70’s: 4,500+ rigs drilling and geologists pushed to cook numbers as high as possible. Thank goodness we’re not like that anymore. LOL

And while we’re on the subject let me fling the facts about the hot “new” Eagle Ford Shale play at everyone again. In the 1940’s alone there were numerous vertical wells completed in the EFS. Yes…a fair bit of activity in this “new” play over 60 years ago. Half of those leases drilled produced from 310k to 822k bo. And that lease that produced 822k bo since Sept 1947 is still producing today: made 134 bo during Feb 1013. That may not sound very impressive but that’s still almost $150k/yr gross income…I would be very happy to own that lease today. Of the 4,149 wells completed in the EFS during the boom since 2008 only 293 wells have produced from leases that have recovered more oil than that one developed in 1947. While it’s true that many of the wells are new and have much more oil to recover it’s also good to remember that many of these wells have already gone thru their high decline rate period and their better days are long behind them. Fortunately, thanks to high oil prices, we can use expensive modern tech to recover much more oil from this half century old proven trend then the earliest wells were capable of.

And please note I’m not making any prediction about how much or little the Bakken or EFS will produce in the future. I’m not even offering an opinion on the subject. Just tossing out some indisputable facts. Folks are free to interpret them as they wish.

[Pops]

ROCK, pick a number for the Bakken and I guess someone has predicted it:

• Dow and Williams (1974) 10 billion barrels
• Schmoker and Hester (1983) 132 billion barrels
• Webster (1982) 92 billion barrels
• Price (unpublished USGS) 271-503 billion barrels
• Flannery and Krause (2006) 300 billion barrels
• Pollastro (2008) 3.6 billion barrels

https://docs.google.com/viewer?url=http ... 2520en.pdf

[rockdoc123]

And while we’re on the subject let me fling the facts about the hot “new” Eagle Ford Shale play at everyone again. In the 1940’s alone there were numerous vertical wells completed in the EFS. Yes…a fair bit of activity in this “new” play over 60 years ago. Half of those leases drilled produced from 310k to 822k bo. And that lease that produced 822k bo since Sept 1947 is still producing today: made 134 bo during Feb 1013. That may not sound very impressive but that’s still almost $150k/yr gross income…I would be very happy to own that lease today. Of the 4,149 wells completed in the EFS during the boom since 2008 only 293 wells have produced from leases that have recovered more oil than that one developed in 1947. While it’s true that many of the wells are new and have much more oil to recover it’s also good to remember that many of these wells have already gone thru their high decline rate period and their better days are long behind them. Fortunately, thanks to high oil prices, we can use expensive modern tech to recover much more oil from this half century old proven trend then the earliest wells were capable of.

I've mentioned this before and you chose to ignore it, but the wells in the Eagleford pool you refer to prior to around 2007 were completed, yes in the Eagleford Formation, but in the sandstone unit at the top of Eagleford Formation. The Railroad Commission itself indicates the first true shale production was in 2008. The clay and carbonate rich zones below that are the areas that are currently being targeted with horizontal wells. Characterizing it as the same play is incorrect and extremely misleading for those here still trying to come to grasp with what shale production is. The two are not the same at all, one is conventional, the other unconventional. From what I've seen the sandstones which sit at the top of the Eagleford (sometimes referred to as sub-Clarkesville) have variable permeability ranging from 10's of md to 100's of md, not very unconventional. The small fracs that were utilized over this zone seem to more directed at dealing with well bore damage than actually opening up reservoir. In contrast the wells being drilled today are a kilometre or more in horizontal reach with anywhere from 7 to 15 stages of fraccing, usually slickwater in nature.They are all targeting the shales and the permeabilities in those zones are nano-darcies not micro-darcies. As a consequence you see the rapid declines in the first few years which is followed by a long flat production profile with very little in the way of decline. Hence the need to drill a lot of wells to have a relatively flat production rate of any significance. When these shale horizontals were drilled and completed the operators fully expected to see exactly what they got, they were not expecting typical standard decline rates associated with conventional pools, it is predictable.

[ROCKMAN]

Great list Pops. Mucho thanks. And I could probably justify every one of those numbers if I use the right oil price. Although I might have to use $500/bbl long term to get to that 500 billion bbl mark. And maybe $60/bbl to make the 3.6 billion bbl mark ring true.

It really emphasize how meaningless any reserve number tossed out is if it doesn't include a price platform, eh?

[Pops]

rockdoc, I'm going to ask for a broad generalization, which I'm sure you don't like to do but I'm gonna ask anyway. Is it typical to have different oil bearing zones stacked like this? And are these different zones from different eras of oil formation or different rock types that trapped the same oil?

[ROCKMAN]

doc- Sorry...didn't catch your note. I'll dig into it some more but I'm about to catch a log run so it may be a day or two.