Is Opec at Peak Production

SoothSayer · Posted: Sun Apr 23, 2006 4:02 am Post subject: Re: Is Opec at Peak Production

>> sorry guys....no peak yet in the field I look after! Not even fully drilled up in the best reservoirs.

Spartacus, I doubt you even know where Saudi Arabia is. Clearly you are an oil industry or government "mole" trying to disrupt this forum.

(Even if you ARE working in Saudi, clearly you must be at one of those new, small fields ... whereas we know that Ghawar is the one we need to worry about ... and that IS in decline. However I am sure the Saudi secret police will ensure that the foreign oil workers in other parts of the country will never hear the truth)

Even a cursory review of the rig count density & utilisation profile versus recovered oil ratio for the isoclinic oil bearing rock shelves and related pebble beds encountered in the Saudi oil bearing massif will show that Peak Oil was probably reached somewhere around 1989-1992.

YOU MUST KNOW THIS ... and yet you continue to push optimistic twaddle about "No peak here guys, honest".

Cool

Hmm - I think I have learnt the forum's de-facto way of replying to posts which may contain data of interest but which contradicts our own ingrained Peak Oil beliefs / hopes.

More seriously Spartacus, what's the story inside Saudi amongst your colleagues about peaking in general? Do you feel that Saudi as a country is near peak .. or are they simply "capping" output for a year or two?

spartacus · Posted: Sun Apr 23, 2006 4:16 am Post subject: Re: Is Opec at Peak Production

Soothsayer, I work on an old field, and one of the largest here. You can believe what you like. Of course, the fact that I am here and that you are in the UK logically indicates that you are correct! All the twaddle that is posted here about Saudi is highly amusing! Look at the expenditure that is being made to reach the targets presented by the Kingdom. This place actually has excess capacity......what other country/company makes investment in any sort of spare! The Saudis should be thanked, rather than railed against. As anyone can see from the drilling count, the Saudis are actually making investment based on future increased demand scenarios. It wasn't too long ago that the oil price was $9, and they had 5 MBD excess capacity, let alone 2 MBD. Whole fields were shut in. Didn't hear too much about peak oil then!

SoothSayer · Posted: Sun Apr 23, 2006 4:40 am Post subject: Re: Is Opec at Peak Production

>> You can believe what you like.

Hi Spartacus.

Clearly the first part of my post was simply a humorous (?) reaction to other posts that I have seen here.

I simply don't know what to believe, so it's really useful to hear REAL data from someone actually near the "sharp end".

My key concern is that we may have reached a "virtual" Peak Oil due to Saudi and OPEC stating that their production is "at maximum".

This "capping" of output will act as if Peak Oil has been reached. Just take a look at the current oil prices.

Also, this "capping" may also end up as the TRUE Peak .. because if Saudi then turns on the taps again in say 2 years time, Cantarell & other fields may have declined so much that even a reactivated Saudi won't be able to compensate.

However it is also clearly of interest to find out if Saudi is REALLY anywhere near any sort of true physical peak of production.

spartacus · Posted: Sun Apr 23, 2006 5:00 am Post subject: Re: Is Opec at Peak Production

Give the Saudis time to finish the projects that have commenced to enable ramp-up to the higher capacity they have targeted. Significant "incremental" investment is being made to meet increased demand, and which will enable them to keep the 1.5 to 2 MBD buffer between forecast demand and peak capacity.

The Saudis have actually done a pretty reasonable job at managing their resources, even if the Americans tried to pillage the fields prior to departure (as alluded to by ex-Aramco Chief PE).

seahorse · Expert Joined: Oct 15, 2004 Posts: 2089 Location: Arkansas

Spartacus,

Some observations and then some questions. Oberservation No. 1: Opec as an entity could peak even if SA has not peaked. Observation No. 2: For two years, Opec has not increased production and neither has SA. You say SA maintains a spare capacity to meet increased demand, the demand is there, so they should produce the oil if its there, but they don't.

Next, some questions:

(1) Recently, the Saudi Ambassador said SA has depletion of 8% in producing fields, can you confirm this? Would you agree with this?

(2) Where are the best prospects for drilling in SA, onshore or offshore?

(3) What is it that you do, specifically?

seahorse · Expert Joined: Oct 15, 2004 Posts: 2089 Location: Arkansas

The evidence says Opec is at a production peak, plateau. The Opec Monthly Oil Reports show that Opec is not pumping anymore now than two years ago. Burgan production is being lowered to either manage the field and avoid depletion or is in depletion, either way, its topped off. For two years now, Opec as an entity has said countless times that they are producing at maximum capacity, which is supported by the fact that production now is the same as two years ago. So, Opec is on a production plateau, that's what Opec has been saying, no one is listening. Further, SA is not going to save the day. SA says their fields in production are showing 8% depletion rates (over 700kbpd). In addition, SA said this month they are producing at maximum capacity, which means they no longer have a 2mbpd spare capacity (as Rockdoc suggested, it was probably used to make up for depletion in existing fields). Further, Rockdoc's graph in other threads shows that even with the two announced fields coming online adding about 1.7mbpd in new capacity, SA production will peak in 2009.

So, based on the above, Opec has peaked. Unless someone has some facts, actual facts, that refute the above evidence coming out of Opec itself, any statements to the contrary are meaningless conjecture.

Again, it didn't take two years to verify the US peaked, nor the North Sea, why would Opec be any different? No answer to that question has been given. There are any number of modellers out there and insiders, but yet no answer to the simple questions like these. Its clearly not a lack of demand issue and the economics of $75 dollar oil certainly warrants the investment, but it isn't being done. Boone Pickens answer makes the most sense, it isn't being done bc the oil isn't out there.

I note that ReserveGrowth has still not answered the questions I asked him in earnest, bc if there is evidence to the contrary, I would like to hear it and take it into consideration. Hopefully, Spartacus, you will be able to add some information we don't have.

seahorse · Expert Joined: Oct 15, 2004 Posts: 2089 Location: Arkansas

The evidence continues to grow that Opec is at a production peak: Kuwait may be dropping/capping its production based on reports its reserves are half of what has been published.

Kuwait Times

Thanks to Waegari for the news link

seahorse · Expert Joined: Oct 15, 2004 Posts: 2089 Location: Arkansas

Here is a graph done by Rockdoc on Saudi production using the latest information coming out of Saudi Arabia. Based on known information, it shows SA going into decline as early as 2009. Again, if SA goes into decline, Opec is in decline. Further, even if SA isn't in decline, Opec as an entity could still be in decline.

[quote="rockdoc123"]

miraculix · Heavy Crude Joined: Apr 11, 2006 Posts: 141

When the Texas Railroad Commission pulled all the stops on production we peaked in the US.

Now OPEC is doing likewise, i.e. it pumps (supposedly) at full throttle after 2 years of plateau.

Looks like a peak to me ladies and gents... Confused

Well, the wildcard is OPEC price politics, but I am certain we will know for sure soon. If production does not grow and/or the oil price does not recide CONSIDERABLY (below USD60/barrel) in the next 6-12 month we will have to concede to peaking.

Unless the energy-militant theory (that is Russia, VZL and Iran trying to collapse the world economy in order to harm the US) does hold water afterall - of course... Laughing

My best guess is to vote for peak in 01/07, if production is still flat and the price will remain at or over USD70/barrel.

jato · Posted: Thu Apr 27, 2006 7:45 pm Post subject: Re: Is Opec at Peak Production

On one hand:

seahorse · Expert Joined: Oct 15, 2004 Posts: 2089 Location: Arkansas

Opec member Venezuela's oil production has dropped and is forced to buy $2bn worth of Russian oil to meet Venezuelan financial obligations. FT.Com

On another thread, it was asked if Venezuelan oil production was collapsing. Certainly looks like it might be. If not collapsing, peaking. Just more evidence that Opec as an entity has reached peak production.

seahorse · Expert Joined: Oct 15, 2004 Posts: 2089 Location: Arkansas

Here's a link to the PO topic asking if Venezuelan oil production is collapsing, which begins by looking at the amount of cash Venezuela is putting in the bank does not equal the amount of oil they claim to be producing.

Peak Oil Topic

skeptic · Posted: Sun Apr 30, 2006 12:43 pm Post subject: Re: Is Opec at Peak Production

pup55 · Expert Joined: May 26, 2004 Posts: 3597

IEA monthly report

note that according to this report, five of the 11 members of OPEC have lower production than in last june, and in four of the five cases, the reason is mainly political in nature. We all know about the Iraq catastrophe, and also the problems in Nigeria, and Iran and Venezuela are hostile and have an excuse to limit productino if they want to. An argument can be made that if Indonesia was not so screwed up politically, it, too, might be able to increase its production.

So while production is relatively flat, there is no suggestion that the problem is geological. That is not to say that a political limitation does not have the same effect, though.

seahorse · Expert Joined: Oct 15, 2004 Posts: 2089 Location: Arkansas

Pup,

So, less than half of the Opec members have a political explanation for not increasing their production. What explanation for the other half? What's the explanation for Saudi Arabia?

I haven't bothered to post the links, but there is other evidence that Opec is at peak, like their own statements. Chavez has said for awhile now that world oil production is peaking. Many many Opec statements that Opec is at max capacity, and they don't say for political reasons. Further, the flat production could easily mean Opec inflated their numbers just as Campbell and company have said for years, supported now by the news coming out of Kuwait and possibly Venezuela.

It didn't take two years to recognize the US peak or the peak in the North Sea, and Opec isn't any different.