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Depletion and forecasts - Oct 23

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Professor Saeedi: A catastrophic loss of 3.9 trillion Dollars in Iran's oil reservoirs

Iranian Students News Agency (ISNA) via Payvand News
Tehran - Recent calculations and studies by professor Saeedi, expert in oil and gas reservoirs, Dr. Derakhshan, energy economist and several other engineers, on Iran's reservoirs proves that injecting gas to increase oil extraction is the most economic alternative of gas consumption.

The Strategic Issues reporter of ISNA said these calculations is based on mathematical models run in three different scenarios to estimate the necessary amount of gas needed to extract oil.

Professor Saeedi said: If gas is injected into our oil reservoirs, the volume of Iran's fossil energy resources would become more than Saudi Arabia in the long run and Iran can gain the first place in the world.

He warned: Non-injection of gas would diminish Iran's oil production by two million barrels per day and we would be forced to import oil.
(22 October 2007)
Iranian Students News Agency (ISNA) website (English) .

Wikipedia says ISNA:

is a news organization run by Iranian university students. Established on November 4, 1999 in order to report on news from Iranian universities it now covers a variety of national and international topics.[1] Editors and correspondents are themselves students in a variety of subjects, many of them are volunteers (nearly 1000). The ISNA is considered by Western media to be one of the most independent and moderate media organizations in Iran, and is often quoted.[1][2]

Although it is generally considered independent, the ISNA is financially supported in part by the Iranian government and is supported by the officially sanctioned University Jihad, another student organization


RenCap again cuts Russian oil output forecast

Reuters
Renaissance Capital brokerage said on Thursday it had cut its Russian oil output forecast for 2007 for a second time this year and saw minimal growth in 2008.

The brokerage, which had in the past issued aggressive forecasts for Russian oil production, said growth would amount to 2.5 percent this year, down from the previously forecast 3.2 percent and the initial 3.7 percent.

"We believe this was driven by the delayed drilling campaign earlier this year, when unusually warm weather held back ice-road building, pad construction and rig mobilisation," Renaissance said in written research.

Excluding the Exxon Mobil's (XOM.N: Quote, Profile, Research) Sakhalin-1, daily crude output in Russia, the world's second biggest crude exporter after Saudi Arabia, has been down year-on-year since May, it said.
(18 October 2007)
Contributor Jeffrey J. Brown writes:
If, as Alfa Bank recently warned, older Russian oil fields are in rapid decline because of rising water cuts, the underlying decline rate in older fields will probably be quite rapid. My take on the Russian situation is in the post: In Defense of the Hubbert Linearization Method (June 18, 2007):

At my request, Khebab generated a post-1970 production profile for the Lower 48 and a post-1984 production profile for Russia, using only production data through 1970 for the Lower 48 and through 1984 for Russia to generate the models.

The post-1970 cumulative Lower 48 production, through 2004, was 99% of what the model predicted it would be, see Figure One, Hubbert Linearization technique applied to the Lower-48. Only the data between 1942 and 1970 (green points) are used to perform the fit (red curve).

The post-1984 cumulative Russian production, through 2004, was 95% of what the model predicted it would be. In other words, Russia was "underproduced" through 2004, see Figure Two, Hubbert Linearization technique applied to Russia. Only the data through 1984 (green points) are used to perform the fit (red curve).

In 2006, Russia "caught up" to where it should be. Now, as Russia has approached the 100% mark (100% of what it should have produced based on the HL model), its year over year increase in production has been slowing appreciably, and since October, 2006, the EIA has been showing basically flat production for Russia.


Non-OPEC Oil Production

Toni Johnson, Council on Foreign Relations
* Introduction
* Non-OPEC Production
* Declines in Production
* Expectations for New Production
* Unconventional Sources
* U.S. Demand and the Ethanol Factor

Oil producers operating outside the Organization of Petroleum Exporting Countries (OPEC) are responsible for producing 60 percent of the world’s oil and face increasing production hurdles.

Experts say many of the non-OPEC producers have older, less productive wells, rising costs for new projects, and in some cases rising demand at home that may cut into exports. OPEC in 2007 announced it would boost production for the first time in two years to ease price pressure over concerns that producers outside the cartel were unable to meet demand. But OPEC’s promise to bring supplies up by five hundred thousand barrels per day (bpd) did not have much impact on oil prices, which remained above eighty dollars per barrel.

A recent study by the National Petroleum Council corroborates projections by a number of experts that the world is entering a period of growing demand amidst tightening supplies. At the same time, higher prices have made difficult oil projects more lucrative, leading to increases in unconventional oil production.

... D. Barry McKennitt, executive director of the U.S. National Association of Petroleum Investment Analysts, questions Mexico’s ability to continue to export, noting that with domestic consumption going up and production going down, “They may not be able to export to anyone in five years.”

...Some experts say that countries, especially the United States, need to work on limiting consumption to help ease world demand instead of focusing on new production. The United States, the top net importer in the world, consumed 21 million barrels of oil per day in 2006 and accounts for a quarter of the world’s oil consumption. The next largest single country consumer was China, one of the fastest-growing energy consumers in the world. It, along with other large emerging economies, has added to the global strain on oil and gas supplies.
(19 October 2007)
Jeffrey Brown points out that the last two paragraphs quoted support the Export Land Model (ELM).


Global Oil Trends

Lionel Beehner and Toni Johnson, Council on Foreign Relations
* Introduction
* Which nations produce the most oil?
* Where is demand for oil the greatest?
* What is being done to meet the global surge in demand?
* What effect have higher energy costs had on other economies?

Introduction
With the gap between global supply and demand narrowing, energy has reclaimed its place near the top of the geopolitical agenda. Oil prices have remained high and show no signs of abating, sparking an increasing interest in Washington to secure future supplies of oil and natural gas. The economic growth of China and India have added pressure on a market that experts say is in a trend of tight supply. Oil’s history is studded with price shocks and rapid fluctuations in supply and demand. Yet a look at the world’s major oil producers, many of them politically volatile places already pumping at near capacity, suggests the latest market fluctuations have deeper causes.
(18 October 2007)
The Council on Foreign Relations is a "nonpartisan resource for information and analysis."

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