Oil's energy contribution has declined by about 12% since 1999. The world's economies have also declined by about 12%. (Using conventional metrics, which are time delayed determinations, this will only be seen in hind sight). The massive destruction of asset values now occurring testifies to it happening.
Peak is well behind us, world economies have peaked and will continue to decline.
Joined: Oct 15, 2004 Posts: 2258 Location: Arkansas
Posted: Sun Aug 20, 2006 6:38 pm Post subject: Re: Is Opec at Peak Production
China continues to drill dry holes in Iranian oil fields. Has Iran peaked?
Quote:
Sinopec's Iran oil block fails to yield enough reserves
China's fourth oil exploration well in the Zavareh-Kashan area has failed to find sufficient reserves to declare the field economically viable, the Iranian oil ministry's press agency reported.
Monday, August 21, 2006
China's fourth oil exploration well in the Zavareh-Kashan area has failed to find sufficient reserves to declare the field economically viable, the Iranian oil ministry's press agency reported.
It is unlikely that the contractor will declare the area as commercially viable based on the results from its fourth drill, Hossein Roshandel, deputy head of the Exploration Directorate of the National Iranian Oil, told Petroenergy news agency.
China Petrochemical, known as Sinopec, won exploration rights for the concession in 2001. Only its first well produced satisfactory results, said Roshandel.
Iran, holder of the world's second- largest oil and gas reserves, is struggling to compensate through new discoveries for the depletion of its older oil fields. Iran needs to add between 300,000 barrels and 400,000 barrels of new daily oil output each year.
Oil output currently stands at 3.8 million barrels a day, or 7.5 percent below its 4.11 million quota within the Organization of Petroleum Exporting Countries.
Sinopec signed another contract worth US$19.6 million (HK$152.88 million) in June with Iran's state-owned National Iranian Oil to explore and develop an oil concession area in Semnan province, east of Teheran.
Sinopec has also been negotiating to buy a 51 percent stake in a project to expand the Yadavaran oilfield in southwestern Iran. BLOOMBERG
Posted: Fri Aug 25, 2006 12:38 pm Post subject: Re: Is Opec at Peak Production
Latest Opec Monthly Oil Report (Aug 06) shows Opec production is down about 240kbpd from July 06.
See Page 36 for supply Opec production totals.
Saudi Arabia had a total of 63 rigs operating (significantly lower than what they have claimed at meetings as per Rocdock) See page 38 of the Report (citing Baker Hughs as basis of info)
Joined: May 15, 2005 Posts: 4142 Location: THE MATRIX
Posted: Fri Aug 25, 2006 2:44 pm Post subject: Re: Is Opec at Peak Production
I believe Opec is at peak and I think you have alot of evidence collected suggesting the same.
I have little to add to this thread but I want to ask - can I call you seahorsey also ? _________________ It is easier to enslave a people that wish to remain free then it is to free a people who wish to remain enslaved.
Posted: Fri Aug 25, 2006 3:10 pm Post subject: Re: Is Opec at Peak Production
Sure, why not, seahorsey it is. Its starting to grow on me. To some, I'm "seahorsey" who realize that I'm merely "horsing around" on these boards, often full of "horse s--t", but occasionally a "horse's a--", or plain old "jack a--"
Posted: Sat Aug 26, 2006 3:36 am Post subject: Re: Is Opec at Peak Production
seahorse2 wrote:
Sure, why not, seahorsey it is. Its starting to grow on me. To some, I'm "seahorsey" who realize that I'm merely "horsing around" on these boards, often full of "horse s--t", but occasionally a "horse's a--", or plain old "jack a--"
Well personally I look forward to reading your updates on opec production flows and from what I have been reading production has been somewhat on the decline.
Joined: Oct 15, 2004 Posts: 2258 Location: Arkansas
Posted: Tue Aug 29, 2006 6:59 am Post subject: Re: Is Opec at Peak Production
Iran says it will miss its 2010 oil production targets by 500kbpd. This could be politics (Iran trying to justify the development of nuclear reactors) or it could be depletion. Iran says its underinvestment in aging oil fields.
From the article:
TEHRAN (AFP) - Iran will miss its 2010 crude oil production target by 500,000 million barrels per day (bpd) owing to a lack of investment in ageing oil fields.
Crude oil production could reach 4.5 million bpd by the end of the state's fourth five-year development plan (2005-2010), well under the original production target of 5.0 million bpd, National Iranian Oil Company managing director Gholam Hossein Nozari said Tuesday.
"We are not close to the 5.0 million bpd target of the fourth plan. More than 80 percent of the current total oil output is being provided from aged oil fields that need serious investment to increase production," he said.
He put the countrys current oil production at 4.08 million bpd, which is 30,000 less than its OPEC quota.
The main challenge of OPEC number two oil producer, Nozari said, was "maintenance of oil reservoirs or increasing the recovery rate".
He announced that the country would soon put out tenders for exploration-development packages of 24 oil blocks.
Major development plans of oil fields that need substantial foreign investment have been held up by protracted negotiations between Iran and foreign investors over disputes on the rising costs of upstream operations.
Another problem stems from the standoff over Irans controversial nuclear plan, as the country refuses to comply with Western demands to suspend uranium enrichment.
The UN Security Council powers has given a August 31 deadline to Iran to halt sensitive atomic work or risk economic sanctions.
Nozari, however, stressed that the oil ministry was ready to deal with any UN Security Council sanctions.
"In case of any sanctions against the country, the oil ministry will be in the frontline and we have prepared for serious work in this regard," Nozari assured.
Posted: Tue Aug 29, 2006 7:04 am Post subject: Re: Is Opec at Peak Production
seahorse wrote:
Iran says it will miss its 2010 oil production targets by 500kbpd. This could be politics (Iran trying to justify the development of nuclear reactors) or it could be depletion.
I bet for depletion, simply because one of the big proponents of peak oil has always been Baktiari, who used to be oil minister in Iran. Makes you think he knew what he was talking about.
Posted: Wed Aug 30, 2006 9:36 am Post subject: Re: Is Opec at Peak Production
Per the Iran thread:
Quote:
Earlier, you graphed various scenarios on a peak in Opec production (I think Opec). How does this latest info on Iran, and your latest assumptions about Iran, effect your earlier graphs on a peak in Opec? If it all.
Answer: Not much. I already had Iran plugged in there at .8% deline or something.
Here is another graph for you though:
I went to the EIA data for the most recently reported quarter (q1) and used the growth/shrinkage rate for the opec countries compared to the previous year, and projected it into the future. Now of course, there are two pieces of "soft" data in there, namely the Saudi slight decline, and Qatar holding constant instead of growing about 9% which is what they have been doing a couple of years, but I put them in as-is.
I used the base production data from the BP review, to make the numbers compatible. There is about a 10% discrepancy between the BP review numbers and the EIA numbers.
The demand growth is based on a continuation of the current demand trends per the BP review with the following exceptions: I derived the Libya, Nigeria and Iraq demand based on the EIA numbers, since the BP review did not split them out separately, and assumed that demand in these places would increase at the same rate as the population. In Libya it is about 4%, and in Nigeria, about 3.3%, both are among the highest in the world. In Iraq, I assumed zero increase in internal demand.
Anyhow, you can see that if these trends continue, the current internal demand growth in these OPEC nations is already causing their net oil exports to decline, and if things keep going like they are, namely rapid population growth in these places, along with stagnant oil production, the train wreck is unavoidable.
Nigeria is a particular problem. As it is, their per-capita oil consumption (internally) is the lowest in OPEC, plus their population is growing at 3.3%, so you can see if they were ever able to get some kind of industrialization going, and turn themselves into a real country instead of the mass chaos they are now in, it might tip the balance even more.
Joined: Oct 15, 2004 Posts: 2258 Location: Arkansas
Posted: Sat Sep 02, 2006 10:54 am Post subject: Re: Is Opec at Peak Production
Interesting article on the PO News Board that Saudi Aramco has bought fuel oil for the first time to meet peak demand. Also talks about their refinery operations.
Quote:
Saudi Aramco Buys First-Ever Fuel Oil Cargoes
02/09/2006
SINGAPORE, (Reuters) - Saudi Aramco, a major fuel oil exporter to East Asia, has imported its first-ever cargoes of the residual fuel, taking a total of around 160,000 tonne for August and September deliveries, to meet peak summer utility demand amid a depressed global market, traders said on Friday.
The two 380-centistoke (cst) cargoes, for delivery to Rabigh, by the Red Sea, were sold from Europe by a Western trader at a discount of around $15 a tonne to Singapore spot quotes, on a cost-and-freight (C&F) basis.
"This is the first time ever that Aramco has actually bought fuel oil. It's a case of optimisation -- the market has been poor and they have cut back on their own production due to depressed prices in the face of peak summer demand," a
Singapore-based Middle East trader said.
"It's cheap to buy but bad to sell. They are still producing fuel oil but the volumes are not enough for domestic consumption so it makes sense, at this time, for them go out to the market and buy."
Both parcels, for second-half August and second-half September delivery are of unusually low-metals content and of maximum 3.5 percent sulphur.
Aramco had also called off plans to export two September-loading cargoes, totaling 160,000-200,000 tonnes, from its Ras Tanura and Jubail refineries.
Traders said the refiner was producing less cracked fuel oil via secondary units and could instead sell feedstocks such as straight-run fuel oil, which fetch better prices. "The Saudi refineries are quite sophisticated and they have that flexibility to tinker with the configuration without impacting on their overall yield volumes," another source said. "They can also sell the feedstocks, though I have not actually seen any of them hitting the market as yet."
The oil giant is the largest Middle East fuel oil supplier into East Asia, exporting 600,000-800,000 tonnes each month from three plants -- in Yanbu, Jubail and Ras Tanura – during the first-half of the year.
Exports normally fall in the third quarter when electricity demand peaks during the sweltering summer season.
The unexpected demand for fuel oil is in line with increased demand for oil products, mainly gas oil and gasoline, from the Middle East, particularly among other oil-rich countries such as the United Arab Emirates and Qatar.
The region has become a crucial swing buyer, spurred by swift economic growth and a construction boom, and its growing fuel import volumes are starting to impact on the market's demand-supply dynamics.
Aramco last exported a spot 380-cst fuel oil lot, for Aug. 21-31 loading from Jubail, to a Middle East trader at a steep discount of $18 a tonne to Singapore spot quotes, on a free-on-board (FOB) basis. This was well below the $9-$10 discount for its term deal for the first-half of the year.
The main fuel oil markets in Asia and Europe have been saddled by swelling supplies since June as European refineries cranked up production, after returning from maintenance, to yield higher gasoline volumes during the summer driving season.
More than 10 million tonnes of Western cargoes have found their way to East Asia during the June-August period, plunging the market into record-low discounts.
Differentials for the benchmark 180-cst grade had been at all-time low discounts of below $10 a tonne since Aug. 11 and closed at a record-low of $14.13 on Thursday.
The product's front-month crack spread had also sunk to all-time lows, hovering at minus $16-$19 a barrel for more than three weeks, well below the previous record of around minus $13.80.
Posted: Sat Sep 02, 2006 10:23 pm Post subject: Re: Is Opec at Peak Production
[quote="seahorse"]Interesting article on the PO News Board that Saudi Aramco has bought fuel oil for the first time to meet peak demand. Also talks about their refinery operations.
Quote:
Saudi Aramco Buys First-Ever Fuel Oil Cargoes
02/09/2006
SINGAPORE, (Reuters) - ....
"This is the first time ever that Aramco has actually bought fuel oil. It's a case of optimisation -- the market has been poor and they have cut back on their own production due to depressed prices in the face of peak summer demand," a Singapore-based Middle East trader said.
"It's cheap to buy but bad to sell. They are still producing fuel oil but the volumes are not enough for domestic consumption so it makes sense, at this time, for them go out to the market and buy."
Parsing those sentences, nothing makes sense any more. Has everything I have learned turned out incorrect?
cut back on their own production due to depressed prices in the face of peak summer demand
Demand should increase prices!
it makes sense, at this time, for them go out to the market and buy.
A farmer doesn't buy corn when he can't sell his own; at worst he eats the stuff he grows!
Joined: Oct 15, 2004 Posts: 2258 Location: Arkansas
Posted: Sat Sep 02, 2006 10:46 pm Post subject: Re: Is Opec at Peak Production
Its hard to figure out the latest Saudi news. Its possible that they don't have enough refinery capacity for their own rising internal demand, like Iran and Mexico for example, and are now having to import refined product, while still selling everything they produce.
At any rate, there are many who follow the data that say rising internal demand within Opec will continue to decrease the amount of oil that Opec can export, thus, bringing the world closer to peak than anticipated. Maybe this is more evidence of it. I don't know. Time will tell.
Posted: Mon Sep 04, 2006 9:01 am Post subject: Re: Is Opec at Peak Production
Platts Fuel Oil Presentation
Here is a presentation describing this stuff. Apparently it is pretty nasty. High in sulfur, 1% water, and marginally able to be poured out of a container at 100F/30C. Also, Vanadium, which is a heavy metal, is higher.
this obnoxious goo was selling for about $39 per barrel at the same time crude oil was selling on the world market for $56. The current price is probably posted somewhere.
So, the Saudis can buy this cheap stuff, ship it in from Singapore and burn it, it would save a few barrels of other stuff that they can then turn around and sell on the world market, so it makes sense for them, provided they can get it cheaply enough.
I guess they can no longer be so wasteful as to burn "good" oil for their fuel requirements.
Maybe they are just being thrifty, for once. Maybe a Saudi being thrifty is an ominous sign in and of itself.
Posted: Fri Nov 17, 2006 9:01 am Post subject: Re: Is Opec at Peak Production
With the OPEC cuts it seems that November is down about 1.1 million so far. The question is: how much of this is the cut to raise the price of oil and how much is cutting production because the oil simply cannot be produced? That is the million dollar question!
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