Donate Bitcoin

Donate Paypal


PeakOil is You

PeakOil is You

HSBC Peak Oil Report 2016

Discuss research and forecasts regarding hydrocarbon depletion.

HSBC Peak Oil Report 2016

Unread postby Zarquon » Fri 13 Jan 2017, 19:07:42

As referenced on the front page:
http://peakoil.com/production/hsbc-glob ... ember-2016
and the download link for the paper:
https://t.co/d38JmCPLkx

I've just read half of it (it's a 54 page report), but it's 1A doomer porn. Well, maybe not doomer porn per se but it summarizes the current state of global oil production. Which is gloomy (does that make it gloomer porn?).

The paper doesn't put forward any new arguments, or at least none that folks here are not familiar with, but IMO it does a good job of putting together the medium-term PO narrative and supporting it with facts, instead of just hyping the shales or focusing on overflowing inventories. A few highlights:

"81% of world liquids production is already in decline (excluding future redevelopments).
...
Even in a world of slower oil demand growth, we think the oil industry’s biggest long-term challenge is to offset declines in production from mature fields. The scale of this issue is such that in our view rather there could well be a global supply squeeze some time before we are realistically looking at global demand peaking.
...
World decline rates have been slowly increasing: for instance, non-OPEC giant fields that peaked in the 2000’s are declining at ~10% p.a., vs <5% for fields that peaked in the 1970’s. This deterioration reflects several factors including the diminishing size of new giant fields, deteriorating geology and finally the impact of technology. Secondary and tertiary recovery (IOR/EOR) techniques play a crucial role in the oil supply equation and help to support global oil output, particularly for large fields where they are more frequently applied.
However, studies show that technology not only increases reservoir recovery rates, but also brings production forward in order to keep output relatively flat. This leads to higher decline rates at the back end of the curve, once all the “tricks in the book” have been exhausted and fields actually start declining.
...
Based to our analysis of Wood Mackenzie data covering 15,500 fields, the average size of new field start-ups has dropped significantly from over a billion barrels in the 1960’s to ~250mbbls in the 1980’s to just 75mbbls this decade.

The size of oil discoveries has also been steadily diminishing over the years, fully consistent with our earlier findings on field start-ups. Oil fields typically start up within 5-15 years of discovery, so trends related to discoveries should simply anticipate those for producing fields with a time lag. According to Wood Mackenzie, the average size of oil discoveries has steadily declined over time and reached an all-time low in 2015 of just 24mmbbls of oil resources per discovery well. For context, this compares to 340mbbls in the 1960’s and 180mbbls in the 1970’s, and is equivalent to 18% of the historical annual average since 1960.
...
When looking at exploration activity in aggregate rather than at the individual discovery level, we also observe that: 1) the number of exploration wells spudded has dropped markedly in the last couple of years, and 2) the exploration success rate has plummeted to an all-time low of 5%. As a result, the absolute amount of oil discovered fell to just 2.7bnbbls, 9% of the historical average."

If you haven't read it, it's definitely worth your time.
Zarquon
Lignite
Lignite
 
Posts: 273
Joined: Fri 06 May 2016, 19:53:46

Re: HSBC Peak Oil Report 2016

Unread postby Subjectivist » Fri 13 Jan 2017, 19:21:11

It isn't surprising exploration is at a very low level, even in good times those wildcats have a meager 5 percent success rate, as you pointed out yourself. Why risk large sums of money to wildcat when oil markets are satisfied and prices are relatively speaking, low? I would guess those wildcats that did get drilled were places like the Gulf of Mexico where such drilling is contracted years in advance.
II Chronicles 7:14 if my people, who are called by my name, will humble themselves and pray and seek my face and turn from their wicked ways, then I will hear from heaven, and I will forgive their sin and will heal their land.
User avatar
Subjectivist
Light Sweet Crude
Light Sweet Crude
 
Posts: 4397
Joined: Sat 28 Aug 2010, 06:38:26
Location: Northwest Ohio

Re: HSBC Peak Oil Report 2016

Unread postby Zarquon » Fri 13 Jan 2017, 20:11:14

Actually I didn't point out anything, these are quotes from the paper. And global exploration activity has been hovering around wells 1200/year for twenty years, dropping only with the price crash in 2014. Success rates, however, dropped from a peak of ~23% in 2006 to below 5% today. Half of that period saw record prices.
You do not have the required permissions to view the files attached to this post.
Zarquon
Lignite
Lignite
 
Posts: 273
Joined: Fri 06 May 2016, 19:53:46

Re: HSBC Peak Oil Report 2016

Unread postby AdamB » Fri 13 Jan 2017, 20:17:55

Zarquon wrote:"81% of world liquids production is already in decline (excluding future redevelopments).


If you haven't read it, it's definitely worth your time.


The first sentence is the tell. This is exactly claimed for why the last peak oil was supposed to have happened, and the ones before that as well. See, what they don't say, which is the tell, is how many of those fields in decline can be reversed with no more of a price signal than that which doubled US oil production from its post peak rate.

So of the 81% in decline, how many can reverse decline so that number then becomes only 30%? Or 10%? The US, the original oil superpower and with as much oil in the ground as Saudi Arabia, can do it in the span of no more than about 5 years, learning from us can the rest of the world do it in 3? In either case, unless you discuss the same phenomena that dispatched the final Hubbert bell shaped curve estimate, then you are just recycling why peak oil didn't work out the last time this same reason was used.
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Volunteer
Volunteer
 
Posts: 4632
Joined: Mon 28 Dec 2015, 16:10:26


Return to Peak oil studies, reports & models

Who is online

Users browsing this forum: Google Adsense [Bot] and 2 guests

cron