Posted: Fri Nov 18, 2005 6:56 pm Post subject: Re: Exxon, and the Implications of 8%
Actuall I meant to write that at 8%, the original volume is half gone in under 10 years.
Apologies.
So then 4% under 20 years and so forth. _________________ "When you understand why you dismiss all the other possible gods, you will understand why I dismiss yours." - Stephen F Roberts.
ln(1/2)/-.08 = 8.6643397569993 or rounded to 8.66 _________________ "If you are a real seeker after truth, it's necessary that at least once in your life you doubt all things as far as possible"-Rene Descartes
"When you have excluded the impossible, whatever remains however improbable must be the truth"-Sherlock Holmes
Posted: Fri Nov 18, 2005 8:38 pm Post subject: Re: Exxon, and the Implications of 8%
turmoil wrote:
MonteQuest wrote:
I know it is. But that isn't what Aaron meant. He meant that in 8.75 years the decline will double, meaning the first 8% is gone.
...lol
I have no idea what I was thinking when I wrote the "first 8% is gone."
Burning the midnight oil on PO .com has it's effects, I guess. _________________ A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
Live in Arizona? Check out: http://sustainablearizona.org and read my blog.
Posted: Sat Nov 19, 2005 3:47 am Post subject: Re: Exxon, and the Implications of 8%
The most important thing about this story is the corporate governance aspect. Here we have Lee Raymond going around saying "remain calm, all is well" but his last several annual reports add up to a scenario where unless the discovery rate exceeds 8% of every year, the company is on a long-term shrinking trajectory. Actual rate has been more like 3%.
More interesting is the idea that the production projections they made in 2001 were too optimistic.
So if you are one of the big mutual fund managers that is holding a large number of Exxon shares, what do you make of this? The CEO's public statements are in contradiction of what is happening within the company. At the very least, the internal people are doing a poor job of estimating future production.
I can see in about five years, when all of this comes to light, a chance for somebody to go to jail.
Posted: Sat Nov 19, 2005 7:33 am Post subject: Re: Exxon, and the Implications of 8%
clv101 wrote:
I make 5 years of 8% falls 34%, which would mean we'd be losing 34% of today's 84million barrels per day leaving us we 55mbpd. To maintain extraction rates a 84mbpd an additional 29mbpd would be needed over the next 5 years. As far as I'm aware no one expects more than 20mbpd within 5 years so it's safe to say that IF FIP are declining at 8% then peak production will occure within 5 years or more likely now-2yrs.
Rembrandt, what date does your analysis show if a global average of 8% is assumed for FIP?
Ehm well if FIP are declining around 8%, lets assume that around 4% of that decline can be offset by infill drilling, very small fields and fields not in the project list and other factors such as pumping the stuff up more faster or i.e. overproduction). And also including a slower decline from NGL and no decline from unconventional
Then we have a decline rate of 3% to 5% that has to be offset by genuine new production from new fields. Production coming on-stream in the coming five years is likely somewhere between 16 mb/d and 22 mb/d.
New prod. (approximates, rounded up)
3.9 mb/d in 2005
4.1 mb/d in 2006
4.1 mb/d in 2007
3.8 mb/d in 2008
2.6 mb/d in 2009 (figure uncertain due to timeframe)
Current prod. taken = 84.56 mb/d (IEA 2nd quarter 2005 data from statistical journal)
I don't think the real decline that has to be offset with new fields is running far higher than 4% though. Could be, could also not be. In any way, the market is going to be very, very tight in the coming years. And I think it proves that peak oil is not that far away anymore.
This analysis above does not include an increase in the decline rate but assumes it stayes static at 4%.
Final conclusion: If the decline rate that needs to be offset by genuine new production (new fields coming on-stream or a structural increase in production from current fields) is around 5% or higher. Then we will peak in the coming years (2005-2007). If it is around 4%, we will probably peak at the end of this decade (2009-2011). If it is around 2% - 3% and increasing, we will probably peak next decade (2012-2014).
Joined: Apr 28, 2005 Posts: 3655 Location: West shore Lake Eire, MI, USA
Posted: Sun Nov 26, 2006 4:35 am Post subject: Re: Exxon, and the Implications of 8%
Taskforce_Unity wrote:
clv101 wrote:
I make 5 years of 8% falls 34%, which would mean we'd be losing 34% of today's 84million barrels per day leaving us we 55mbpd. To maintain extraction rates a 84mbpd an additional 29mbpd would be needed over the next 5 years. As far as I'm aware no one expects more than 20mbpd within 5 years so it's safe to say that IF FIP are declining at 8% then peak production will occure within 5 years or more likely now-2yrs.
Rembrandt, what date does your analysis show if a global average of 8% is assumed for FIP?
Ehm well if FIP are declining around 8%, lets assume that around 4% of that decline can be offset by infill drilling, very small fields and fields not in the project list and other factors such as pumping the stuff up more faster or i.e. overproduction). And also including a slower decline from NGL and no decline from unconventional
Then we have a decline rate of 3% to 5% that has to be offset by genuine new production from new fields. Production coming on-stream in the coming five years is likely somewhere between 16 mb/d and 22 mb/d.
New prod. (approximates, rounded up)
3.9 mb/d in 2005
4.1 mb/d in 2006
4.1 mb/d in 2007
3.8 mb/d in 2008
2.6 mb/d in 2009 (figure uncertain due to timeframe)
Current prod. taken = 84.56 mb/d (IEA 2nd quarter 2005 data from statistical journal)
I don't think the real decline that has to be offset with new fields is running far higher than 4% though. Could be, could also not be. In any way, the market is going to be very, very tight in the coming years. And I think it proves that peak oil is not that far away anymore.
This analysis above does not include an increase in the decline rate but assumes it stayes static at 4%.
Final conclusion: If the decline rate that needs to be offset by genuine new production (new fields coming on-stream or a structural increase in production from current fields) is around 5% or higher. Then we will peak in the coming years (2005-2007). If it is around 4%, we will probably peak at the end of this decade (2009-2011). If it is around 2% - 3% and increasing, we will probably peak next decade (2012-2014).
With it now confirmed that Cantarell is declining at 14% and the North Sea fields declining at 12.1% things are looking much grimmer. It seems at least likely if not garunteed that submerged fields are produced in such a way that they have a much steeper rise and fall in production to maximize profit. Being at sea costs a heck of a lot of money in terms of maintainence and repairs that are not faced by rigs on land, even in places like Siberia and the North Slope of Alaska. We also seem hell bent on making more and more of our oil come from deep sea rigs where the EROEI is lower due to depth both below the sea floor and below the surface of the water. All of that depth requires extra effort and materials to be invested just to tap the resevoir, then extra energy to drain it.
I am feeling more and more pessimistic as time grinds forward but maybe that is just this stinking head cold i came down with Friday talking. Hard to be optimistic when you are sick and irritible. _________________ Oxygen: - An intensely habit-forming accumulative toxic substance. As little
as one breath is known to produce a life-long addiction to the gas, which addiction invariably ends in death.--Isaac Asimov
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