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Articles and quotations from recent oil industry publications.
Each year World Oil produces a review of the previous years. In 1997 they had 918,896 producing oil wells world wide.. This declined to 902,103 in 1998, and to 879,8888 in 1999. It recovered a bit in 2000 rising to 884,843. The trend is clearly downward. See http://www.worldoil.com/magazine/magazine_link.asp?ART_LINK=01-08_world-staff_T2.htm
http://www.worldoil.com/magazine/magazine_link.asp?ART_LINK=00-08_world-staff_T2.html
http://www.worldoil.com/magazine/magazine_link.asp?ART_LINK=99-08_world-staff_T2.html
When an oil field is found, an oil company will install a platform which will house the production equipment. At the end of the field's life, the platform must be removed. In all but one year over the past 50 years, more platforms have been installed than removed. But starting this year or next, the Gulf will enter a period in which more platforms are removed than are installed. This threshold does mark the extreme maturity of the Gulf's shelfal waters. The MMS predicts that over the next 25 years there will be an average of 142 installations per year and 186 removals per year.
Steven Poruban "Decommissioning advances made in Gulf of Mexico waters," Oil&Gas Journal, January 15, 2001
July 2001 First Break--the journal of the European Association of Geoscientists and Engineers
“Current reserves, however, are insufficient to sustain present levels of production in the medium term. Estimates of future production of oil and condensate suggest that at the mean expectation, production rates will drop by around 33% by 2005 and 50% by 2010, largely as a result of a decline in oil production. This forecast includes production from fields that have not yet been discovered. Condensate production will continue to grow, but rate of growth is constrained by gas production rates and overall by the development timetable for the major gas fields.”
“The rate of discovery of new oil fields is insufficient to replace the reserves that are being produced. If Australia is to maximize the opportunity to maintain production at similar levels to the recent past, it is probable that exploration effort will have to diversify to the frontier basins to locate a new oil province whilst continuing to explore the full potential of the known hydrocarbon-bearing basins. Australia still has a remarkable number of basins that have received little or no exploration.” T. G. Powell, “Understanding Australia’s Petroleum Resources, Future Production Trends and The role of the Frontiers,” First Break, 19(2001):7;397-409, p. 397
Percentage of production to total reserves in Opec. Greater than 50% means declining production:
Iraq 22%
UAE 24%
Saudi Arabia 30%
Kuwait 32%
Iran 43%
Nigeria 49%
Algeria 50%
Libya 52%
Venezuela 58%
Qatar 63%
Indonesia 77%
Source AM Samsam Bakhtiari, "OPEC'S EVOLVING ROLE: OPEC capacity potential needed to meet projected demand not likely to materialize" Oil and Gas Journal, July 9, 2001,
"Either EIA &IEA projections are wrong, or a crisis appears to be imminent. The World Energy Outlook 2000, compiled by the U.S. Energy Information Administration (EIA), and the International Energy Outlook 2001, authored by the International Energy Agence (IEA), indicate that oil production in the Arabian Gulf States must almost double by year 2020 to meet rising world demand."
"The EIA outlooks states, 'The reference case projection implies aggressive efforts by investment capital, to implement a wide range of production capacity expansion. However, the combination of potential profitability and the threat of competition from non-OPEC supplies argues for the pursuit of an aggressive expansion strategy.'
"The reference case requires Gulf states to increase their oil production 80% by 2020. This means adding about 13 million bopd by 2020--with Saudi Arabia increasing its capacity by more than 7 million bopd, to about 17 million bopd. This seems highly unrealistic. So, either EIA & IEA or a supply crisis is coming, because Saudi Arabia and its neighbors cannot increase production by 80% for many technical, financial and political reasons."
Mistaken projections. Two recent studies by prominent oil market experts Guy Caruso (Center for Strategic and International Studies, Washington) and Prof. Deromt Gately (New York University) show that such EIA and IEA projections are wrong. In his study, 'How likely is the consensus projection of oil production doubling in the Persian Gulf?', Gately states, 'Such projections are not based on behavioral analysis of Gulf countries' decisions. They are merely the calculated residual demand for OPEC oil, the difference between projected world oil demand and non-OPEC oil supply.' A. F. Alhajji, "Will Gulf States Live Up to EIA and IEA Projections?"" World Oil, June 2001, p. 33 The author further states:
"What if demand projections are correct? Will Gulf states double their collective oil capacity by 2020? The answer is no, for several reasons, including a lack of economic benefits, lack of capital and foreign investment, a shift toward focusing on natural gas, and Saudi Aramco's own dominant plans." A. F. Alhajji, "Will Gulf States Live Up to EIA and IEA Projections?"" World Oil, June 2001, p. 33
