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Peak Permian means Global Peak Oil will happen in 2020

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

Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby zoidberg » Wed 27 Dec 2017, 10:23:38

Im pretty sure theres more resources globally awaiting proper investment conditions to come online. If north america alone had all this potential surely theres a lot more waiting in the wings.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby AdamB » Wed 27 Dec 2017, 11:12:02

zoidberg wrote:Im pretty sure theres more resources globally awaiting proper investment conditions to come online. If north america alone had all this potential surely theres a lot more waiting in the wings.


400+ billion barrels globally, call it 325 billion if you take out the US for anyone who wants to take the time to keep up with such things.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby tita » Wed 27 Dec 2017, 11:28:00

zoidberg wrote:Im pretty sure theres more resources globally awaiting proper investment conditions to come online. If north america alone had all this potential surely theres a lot more waiting in the wings.

Probably. But North America had a head start in shale in the presence of a large oil service industry and oil infrastructure, coupled with the availability of investment risk. It would require a huge investment to reproduce what happened in the US.

The most advanced project appears to be Vaca Muerta, in Argentina. But we talk about a 0.7 MMbbls/d growth in 5 years, less than the growth expected in the US just for 2018.

Remember also that in 5 years of high oil prices, there wasn't much increase outside North America and Middle East.
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What’s The Limit For Permian Oil Production?

Unread postby AdamB » Thu 18 Jan 2018, 11:03:16


The ‘hottest shale play’ has been the media’s favorite cliché for the Permian Basin over the past year. And while cliché, the basin straddling West Texas and New Mexico has lived up to this description—its oil production, unlike that in other basins, did not fall off a cliff during the downturn, it recently beat its own record from the 1970s, and is expected to continue to increase production more than any other U.S. shale play and account for most of the American oil production growth. The Permian has been pumping oil since the 1920s. Conventional oil production started to decline in the late 1970s, but the fracking boom revitalized the oil-producing region in the early 2010s, and as oil prices rose last year, the Permian beat its previous record for annual oil production dating back to 1973. The Permian surge in oil


What’s The Limit For Permian Oil Production?
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Re: What’s The Limit For Permian Oil Production?

Unread postby Plantagenet » Thu 18 Jan 2018, 12:13:50

AdamB wrote:

The ‘hottest shale play’ has been the media’s favorite cliché for the Permian Basin over the past year. And while cliché, the basin straddling West Texas and New Mexico has lived up to this description—its oil production, unlike that in other basins, did not fall off a cliff during the downturn, it recently beat its own record from the 1970s, and is expected to continue to increase production more than any other U.S. shale play and account for most of the American oil production growth. The Permian has been pumping oil since the 1920s. Conventional oil production started to decline in the late 1970s, but the fracking boom revitalized the oil-producing region in the early 2010s, and as oil prices rose last year, the Permian beat its previous record for annual oil production dating back to 1973. The Permian surge in oil


What’s The Limit For Permian Oil Production?


You quoted the intro for that article, but you've entirely missed the point. The article is discussing the LIMITS on permian oil production. Thats why its entitled "What's the limit for Permian Oil Production?" Get it now?

The quote you selected from the introduction to the article in its first paragraphs doesn't include the central point the article is making, i.e. that the Permian is close to reaching its peak in production. The conclusions of this interesting article are presented at its conclusion---not in the intro section. Did you just read the first two paragraphs and not bother to read the article all the way to the end?

Here.....I'll quote the main points of the article for you here:

"What's the limit for Permian Oil Production?"

....analysts have started to question just how long the Permian can keep pumping at this relentless pace before hitting geological or financial constraints.

According to Wood Mackenzie .... signs have started to emerge that the relentless intensification of drilling leads to diminishing returns, and pumping twice as much sand as usual into Permian wells and drilling longer laterals doesn’t deliver commensurate volumes of oil.....

In addition, drillers may soon start to test the Permian region’s geological limits. And if E&P companies can’t overcome the geological constraints with tech breakthroughs, WoodMac has warned that Permian production could peak in 2021


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A gusher from the good old days in the Permian basin

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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Plantagenet » Tue 23 Jan 2018, 18:34:20

Global Oil production outside the US predicted to decline in 2018

hail-the-return-of-$100-crude

Combine that with peak Permian in 2020-21, and we're looking at peaks in oil production both outside the US and inside the US.

My gosh---that means global peak oil in three more years!!!!!

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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Tanada » Tue 23 Jan 2018, 18:42:00

With the depressed production in Libya, Nigeria and Venezuela coupled with the OPEC+ promise to maintain production cuts to support prices any potential "world peak" 2018 has an awful lot of artificial factors working in its favor. It is just as likely that as Iraq continues to add production capacity, the Venezuela and Libya governments come around to a more rational leadership and OPEC+ decide that frackers in the USA need another lesson in 2019 will all lead to another over production boom year and price crash.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby GoghGoner » Tue 23 Jan 2018, 21:15:46

It seems like right now things are going better for oil supply than I remember them. Iran's sanctions being lifted was huge, Libya and Nigeria are both doing much better than a few months ago, Iraq has been stable, etc...

For some pessimism on 2018. Mexico is just about a failed state. Venzuela isn't going the right direction. The chance for civil war in the Iran seems to be increasing. A drought in the corn belt could turn the Africa topsy turvy again by the end of the year.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Plantagenet » Tue 23 Jan 2018, 21:33:43

Yes, there are countries like Iraq and Iran where oil production has some room to increase. However, there are many other countries where production has already peaked and gone into decline. Whether or not global oil production peaks in the next couple of years will depend on the total global picture--ie. even if oil production is still increasing in a few countries, oil production declines are occurring in many more countries.

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Global oil production growth has been very slow for the last several years. Its inevitable that at some point it will slow even further and then stop growing.

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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Tanada » Wed 24 Jan 2018, 10:24:54

Plantagenet wrote:Yes, there are countries like Iraq and Iran where oil production has some room to increase. However, there are many other countries where production has already peaked and gone into decline. Whether or not global oil production peaks in the next couple of years will depend on the total global picture--ie. even if oil production is still increasing in a few countries, oil production declines are occurring in many more countries.

Global oil production growth has been very slow for the last several years. Its inevitable that at some point it will slow even further and then stop growing.

Cheers!


Production growth of any commodity is ALWAYS minimal during periods of glut! Geeze Louise, it is not like losing money is the goal of oil exploration companies! Why in the world would anyone seek to explore for and develop new resources they then have to sell at a deep discount into a glut market cycle?

It may turn out the oil majors have declared a new policy of never looking for new resources, which would be quite surprising. Or it may turn out that once sale prices on the world market creep high enough the next generation of exploration will boom seeking new resources to exploit.

This isn't to say they will automatically find enough to replace consumption especially after all the recent growth we have experienced. However declaring that low growth in a glut market is some sign of imminent doom is at best premature IMO.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Plantagenet » Wed 24 Jan 2018, 11:46:58

Tanada wrote:...it may turn out that once sale prices on the world market creep high enough the next generation of exploration will boom seeking new resources to exploit.

This isn't to say they will automatically find enough to replace consumption especially after all the recent growth we have experienced. However declaring that low growth in a glut market is some sign of imminent doom is at best premature IMO.


No doubt exploration companies will pump up their exploration programs again when the price of oil creeps back up.

The key question is.....how much oil remains to be found?

Conventional oil production seems to have already peaked, and the boomlet created by US shale oil production isn't going to last forever either. The EIA is predicating their predictions of ever increasing global oil production on ever increasing US TOS production. But when you look at the US more closely, the only US TOS area still growing is the Permian basin, and some analysts predict it will also peak ca. 2020-21.

IF global conventional oil has already peaked, and US TOS oil production peaks in the next several years, then where will the world go to continue to grow its oil production?

Cheers!

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PS: The idea that "peak oil" means imminent doom is very 2000s. More likely the world will continue to switch to some combination of NG,nuclear energy and renewables---a process that already well underway.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Subjectivist » Wed 24 Jan 2018, 13:35:54

Don't forget Venezuela alone has over a TRILLION barrels of heavy and extra heavy oil, basically the same stuff Canada gets out of the tar sands and sells millions of barrels of a day. They also have the advantage of tropical weather making it easier to pump the stuff in the September through April period every year.

This is a huge resource and if the world needs regime change and moder refineries to make use of it I expect that to happen when really needed.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Plantagenet » Wed 24 Jan 2018, 13:46:58

Subjectivist wrote:Don't forget Venezuela alone has over a TRILLION barrels of heavy and extra heavy oil, basically the same stuff Canada gets out of the tar sands and sells millions of barrels of a day. They also have the advantage of tropical weather making it easier to pump the stuff in the September through April period every year.

This is a huge resource and if the world needs regime change and moder refineries to make use of it I expect that to happen when really needed.


Yup.

But Venezuela has a socialist government that is so incompetent that it can't even keep production levels up for its regular oil, much less start a new program to develop its heavy oil. And even if Venezuela somehow fixes the problems with their government and tries to start producing the heavy oil, they will still face the same problems that Canada does with their tar sands. (1) its very expensive to produce oil from tar sands, limiting the amount of oil that can be produced this way. AND (2) it requires a long process involving both mining and retorting the tar sands, limiting the amount of oil that can be produced this way.

I may be wrong, but I don't see Venezuela's tar sands becoming a major source of new oil any time soon.

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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby tita » Thu 25 Jan 2018, 10:13:59

Plantagenet wrote:I may be wrong, but I don't see Venezuela's tar sands becoming a major source of new oil any time soon.

Cheers!

I don't see it either. Mostly because of the low investments in the last 15 years. But I wouldn't bet that Venezuela only have oil similar to tar sands to develop. There is probably a lot of opportunities that interest oil firms.

But this needs a government less stubborn to let oil firms develop oil fields. And this will take quite some time.

And the problem is social idealism (or social fascism), not socialism... Firing thousands of qualified employees that were on strike was not a social action. This was probably the starting point of the ruin of the country. 15 years of mismanagement won't be recovered in just 1-2 years.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Cog » Thu 25 Jan 2018, 10:52:20

If there is oil in the world, its going to get used. You doomers fascinate me with your insights.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby rockdoc123 » Thu 25 Jan 2018, 11:10:03

But this needs a government less stubborn to let oil firms develop oil fields. And this will take quite some time.

And the problem is social idealism (or social fascism), not socialism... Firing thousands of qualified employees that were on strike was not a social action. This was probably the starting point of the ruin of the country. 15 years of mismanagement won't be recovered in just 1-2 years.


I remember the last time that Venezuela came back from a nationalized industry to being open to foreign participation. It was back in the late nineties and famously called Apertura Petrolera (petroleum opening). It was a crazed feeding frenzy. I didn't attend the bid round event in Caracas but several of my colleagues did. The bidding bonuses offered were so far beyond anything anyone had seen to that time as to be absurd (if I remember correctly Lasmo offered $450 MM as a signature bonus; needless to say they are no longer in business). Every oil company you could imagine participated in that bid round as there was a lot of prospectivity outside of the heavy oil. I point this out because after Chavez began to twist the arms of the foreign companies in the mid-2000's pretty much all new activity stopped. During the period of the "great opening" almost no new exploration was accomplished, companies who had gained concessions in the bid round were still doing the evaluation of these blocks when they were summarily dismissed. In the interim PDVSA has conducted almost zero exploration not having any budget as their cash flow was directed to fund Chavez' social programs. That means there is still a lot of conventional oil and gas opportunities available.

A lot of the PDVSA senior folks left the country when Chavez declared many of them traitors to the cause. A few of them had successful oil and gas businesses elsewhere (eg. Pacific Rubiales in Colombia was founded by several former PDVSA management). Having spoken with a few of these gentlemen over the years it was clear they were chomping at the bit for Chavez to leave so they could return and chase some of the opportunities that they were more than familiar with.

Given the above, my guess is once the industry is opened again it will be a mass migration of all the international oil and gas companies with any familiarity in the region.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby Plantagenet » Thu 25 Jan 2018, 14:37:15

the problem is social idealism (or social fascism), not socialism...


Of course its socialism---its Cuban style socialism. Chavez and Maduro modeled their revolution on the Cuban revolution, and Cuban advisors are helping them with each disastrous policy they implement.


...15 years of mismanagement won't be recovered in just 1-2 years.


Exactly right. And the mismanagement isn't over yet. Maduro just filed again to run for another term as El Presidente. And since his socialist cronies control the government, the economy, the media, the military and the streets, almost certainly socialism will continue to be implemented in Venezuela, no matter how disastrous it is for the Venezuelan economy.

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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby ralfy » Thu 25 Jan 2018, 20:08:51

Subjectivist wrote:Don't forget Venezuela alone has over a TRILLION barrels of heavy and extra heavy oil, basically the same stuff Canada gets out of the tar sands and sells millions of barrels of a day. They also have the advantage of tropical weather making it easier to pump the stuff in the September through April period every year.

This is a huge resource and if the world needs regime change and moder refineries to make use of it I expect that to happen when really needed.


The catch is that a global capitalist economy driven by increasing energy returns needs the opposite of heavy oil.
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby AdamB » Fri 26 Jan 2018, 12:03:12

ralfy wrote:
Subjectivist wrote:Don't forget Venezuela alone has over a TRILLION barrels of heavy and extra heavy oil, basically the same stuff Canada gets out of the tar sands and sells millions of barrels of a day. They also have the advantage of tropical weather making it easier to pump the stuff in the September through April period every year.

This is a huge resource and if the world needs regime change and moder refineries to make use of it I expect that to happen when really needed.


The catch is that a global capitalist economy driven by increasing energy returns needs the opposite of heavy oil.


Wrong. The global capitalist economy wants manufactured products, gasoline, diesel, jet fuel. They don't give a crap what it is made from, heavy oil, light oil, natural gas, kerogen baked into oil, hydrates, whatever. Pick up a book on chemical engineering sometime, I dare you. Break free from your astrologers ideas on...anything...I have faith in you! You can break free from needing a father figure, I promise!
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Re: Peak Permian means Global Peak Oil will happen in 2020

Unread postby tita » Fri 26 Jan 2018, 18:15:25

Wow, oil rig count increases by 12, with 18 new rigs just for the permian... which indeed means 6 less rigs for the others basins. Although prices are at their highest levels since 2014, there is not much increase of interest outside the permian.
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