I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.
Ok let us "crunch" the easy numbers first shall we:
3.5 mbpd is the highest daily production to date.
2.5 mbpd pre invasion.
2.4 mbpd currently - this report claims.
Sorry but I must laugh at this part "Production was about 2.5 million dollars a day when President Saddam Hussein was deposed by US-led forces in 2003."
Anyways - 6 mbpd by 2012 and 9 mbpd by 2016.
Can it be done? if so then how? if not then why not?
Is it possible without mega investment? and why or why not?
How quickly will the oil Barons invest in the quagmire that is Iraq?and why? because I think the why not is fairlyevident.
Is this an overstimate? and why?
Is this an underestimate? and why?
Heritage is a small company, the article originated from AFP yet I found it via the Turkish press and quote "while Turkish investors will hold the remaining 15 percent."
Posted: Sat Jul 08, 2006 10:49 pm Post subject: Re: Iraqi Production - Collecting the data
Hogwash I say. Iraq's infrastructure is so out of shape and obsolete it will take decades to get it back into shape.
Also, those fields were so poorly produced in the first place that many of them may be watered out anyway. Saddam didn't properly produce them years ago. 9 mbpd is pie-in-the-sky. I would say 3 maybe 4 for fifteen years max.
This assumes billions in near-term investment AND no insurgent problems. Remember, a $5 IED can destroy a $5 million piece of oil equipment instantly. Figure that ROI.... _________________ "God is dead. God remains dead. And we have killed him." -Friedrich Nietzsche
Ok let us "crunch" the easy numbers first shall we:
3.5 mbpd is the highest daily production to date.
2.5 mbpd pre invasion.
2.4 mbpd currently - this report claims.
So I don’t think that 5mbpd production for maybe 10 years should be "much problem".
(that is, if the situation in the country is good + massive investments).
Posted: Sun Jul 30, 2006 3:28 pm Post subject: Re: Iraqi Production - Collecting the data
Quote:
Here says 116 billion barrels are proven and another 100 could be added.. So 9mbpd is at least not the most optimistic number
Let's say that 116 is realistic simply because of reserve growth and all of that. Now conventional wisdom points to more fields being found simply because it's been decades since they've really searched. Well, if you look at a map of the oil fields in the Middle East, you'll notice this ring of fields. It extends from Kirkuk, through Bagdad and eastern Iraq/western Iran, down through the Gulf and finally concludes with Ghawar, the largest oil field.
This is important because one nation, specifically, that has not had turmoil for the past 3 decades in Saudi Arabia (the same applies to Qatar, Kuwait largely, UAE, etc). Aramco has brought out some of the most advanced techniques and technology, the largest field they've found is the Hawtah Trend which holds no more than a few billion barrels. Sure, that field is pretty large, but it holds little promise to be a super giant that the world so desperately needs.
Why is this a bad thing? Well, Iraq and Saudi Arabia draw their oil from the same sand. SA found most of their oil with very outdated techniques which holds true for Iraq as well. Since not a whole lot of oil has been found with so much years of hard work, money and technology in Arabia, should we really expect 100 billion barrels to be found in Iraq? I put it closer to 10 bbl, maybe 20 billion if we're lucky. _________________ I want to put out the fires of Hell, and burn down the rewards of Paradise. They block the way to God. I do not want to worship from fear of punishment or for the promise of reward, but simply for the love of God. - Rabia
Posted: Sun Jul 30, 2006 4:58 pm Post subject: Re: Iraqi Production - Collecting the data
Palkerss wrote:
I hope you're being sarcastic -> read this. And do the necessary observations.
yes, i was.
Quote:
Since not a whole lot of oil has been found with so much years of hard work, money and technology in Arabia, should we really expect 100 billion barrels to be found in Iraq? I put it closer to 10 bbl, maybe 20 billion if we're lucky.
No dont think so, but isn’t 10-20 billion too little. They had 47 billion before increasing to 100 billion so isnt 47 (or 40-50) the likely number?
Posted: Sun Jul 30, 2006 5:02 pm Post subject: Re: Iraqi Production - Collecting the data
Quote:
No dont think so, but isn’t 10-20 billion too little. They had 47 billion before increasing to 100 billion so isnt 47 (or 40-50) the likely number?
Oh, no, no no. Reread my post.
I was talking about the 116 billion barrels as being fairly credible given reserve growth (at a max). I was disputing the 100 billion barrels of extra oil that could be discovered, which is why I compared potential oil discoveries in Iraq with known oil discoveries in Saudi Arabia. Only 10-20 billion barrels more to be found is my estimate on top of 116 billion barrels, so max, 140 billion barrels. _________________ I want to put out the fires of Hell, and burn down the rewards of Paradise. They block the way to God. I do not want to worship from fear of punishment or for the promise of reward, but simply for the love of God. - Rabia
Posted: Mon Jul 31, 2006 1:12 pm Post subject: Re: Iraqi Production - Collecting the data
I had some time to look back at information I had put together some time ago on Iraq potential. From a reserves standpoint the following measures original 2P reserves versus remaining 2P from both IHS Energy and Wood Mackenzie.
Note that there are several fields where IHS Energy have much higher estimated remaining reserves than WoodMac. The reason for this is WoodMac does not give credit for “technical reserves” or those reserves that have been proven to exist but for which there is no clear development plan submitted. As an example they only credit East Baghdad with about 1.5 GB of remaining oil but note that there are considerable reserves (up to 15 GB) that have been discovered but are in deeper reservoir zones that have not yet been put on production. A similar story exists for Zubair where adding the technical reserves to their 2P estimates results in 7.8 GB which compares to the 8.2 GB of IHS Energy. By far the largest variation is in the “other field” category where WoodMac recognizes little 2P remaining potential in comparison to IHS. This is no doubt due to the fact that no plans to develop these fields currently exist. Some are heavier hydrocarbons and might suffer from lack of market or economics.
It’s interesting to note that in either reserve assessment somewhere around 70% of the remaining reserves sit in 5-6 fields. At one time or another negotiations were underway for further development of those fields by foreign partners, all such negotiations having stalled due to continuing problems. An interesting plot of remaing potential (based on WoodMac numbers)
WoodMac’s comment on potential in Iraq:
Quote:
While the country's first open elections in more than 30 years took place at the end of January 2005, it has taken over a year for the constitutionally elected governmet to be formed and many more political steps are required to resolve the uncertainty over constitutional and legal issues affecting the oil sector. As a result we assume that no large-scale investment in Iraq's upstream industry, from international companies, will commence until at least 2008 and in all likelihood probably longer.
There is no doubt that Iraq has the resource potential to double its current production capacity, but achieving this goal is subject to the significant political and security risks and uncertainties.
But herein lies the rub. In order for Iraq to succeed in increasing it’s output it requires considerable upstream investment. Under new parliamentary laws foreign oil companies are excluded from the upstream sector:
Quote:
New Iraq legislation bars foreign upstream investment
(7/30/2006 - OGI: Cairo) The present Iraqi government is reported today to be optimistic about attracting international oil companies to invest in the development of Iraq's oil industry.
Hussein Shahristani, the country's petroleum minister, told the Iraqi parliament today that he has found a "serious willingness" on the part of international oil companies to fund development of the Iraqi oil infrastructure. He made the comments after returning from a trip to the United States.
Shahristani, while outlining the United Nations plan for an International Compact to develop the Iraqi economy, said he had several meetings with international oil companies during his US visit and found them interested in the prospects of involvement in the industry, but pointed out that the new investment legislation enacted by the new government will not allow them to invest in upstream operations.
"Most of the companies have shown a serious willingess to help and to work with Iraqi oil companies and on their own" to develop the industry, he said. "We are hoping the International Compact will give a chance to many more companies to come and cooperate with us to develop Iraq's oil fields." He said, however, that a law now before parliament is critical. "This law will allow the domestic and international private sector to invest in all fields of oil production, except for exploration and drilling for crude oil. These areas are reserved for the Iraqi state.
So with Iraq counting on internal funding for advancement in upstream potential it is very likely that even WoodMac’s assessment of when additional production can be brought on stream is an optimistic case
Posted: Mon Jul 31, 2006 2:19 pm Post subject: Re: Iraqi Production - Collecting the data
Rockdoc,
So according to those sources, Iraq has only developed 29.45 billion barrels in it's 90-100 year history? And from those sources, the optimistic side is only a tad more than 100 billion barrels in all from current fields after most reserve growth?
So you would say that it is unlikely for Iraq to ever become a major player like Saudi Arabia? Looking at those numbers, I see potential in several of the fields: East Baghdad, Rumaila, Majnoun, W. Qurna and Zubair. Only Rumaila has had much production. The rest all have about 10 billion barrels URR. I don't know much about Iraqi oil fields except they are extremely cheap to produce because they are very shallow (~1000 feet) compared to the rest of the world (even SA is 5k to 10k feet deep). I imagine this would allow for much higher extraction rates for a peak, but because their reserves are not as extensive as Saudi fields so it would be an abrupt peak and decline if their fields were ever brought onto stream at full speed. I could see them hit a peak of 7 or even 8 mpd, possibly even 10 mpd with enough money and tech. But for sustainable (10-20 years) plateau, maybe 5 mpd which is still not bad. Just my simple analysis. _________________ I want to put out the fires of Hell, and burn down the rewards of Paradise. They block the way to God. I do not want to worship from fear of punishment or for the promise of reward, but simply for the love of God. - Rabia
Posted: Wed Aug 16, 2006 8:03 am Post subject: Re: Iraqi Production - Collecting the data
Hi Neopo,
Even if this story was remotely true this additional oil cannot contribute anything in the next few years to turn production up sharply enough to overcome the decline in existing fields.
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