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Help Us List Megaprojects

Stuart Staniford, The Oil Drum
Last week, both Khebab’s piece and mine looked at apparent acceleration in base production decline rates. This occurs when you combine the increasing new capacity totaled by Petroleum Review’s megaproject reports against plateaued production. Although we began our analyses separately, we came to roughly the same conclusion.

However, what is not clear is what this means. In particular, it’s not at all clear that we can make the leap from seeing base production declines accelerate to assuming that actual petrophysical declines are acclerating. There are a number of confounding factors that potentially complicate life – changes in the amount of spare capacity in the system, restoration of Soviet production capacity that had decayed, effects from the slow ramp-up of some new capacity projects, to mention just a few.

However, a number of people suggested to us in email that an additional confounding factor is that the megaproject lists we were relying on had enough issues that one should hesitate to draw conclusions from them. Although the jury is still out on this question, there does seem to be some evidence for the idea. It would be understandable – maintaining a megaproject list is a mammoth task for any one person in their spare time.

As a result, Khebab and I decided last week to start an open megaprojects list. We’re doing this in the form of a Wikipedia page…
(26 November 2007)

Where EOR Succeeds and Where it Does Not: Big Thermal EOR in California, But Where Else?

Tom Standing, ASPO-USA
Commentaries of October 29 and November 5 tracked the history of how a major branch of enhanced oil recovery (EOR) evolved first through industry research to develop effective processes, followed by application of those processes to targeted oil fields. Industry’s Holy Grail for EOR was to develop a series of processes that would extract an additional increment of oil, i.e. tertiary oil, after primary and secondary reserves of conventional oil fields were depleted.

However, despite nearly 60 years of R&D, followed by untold applications in fields across the U.S., only one group of processes, miscible gas injection (MGI) successfully extracted significant volumes of oil from fields with light or medium weight oil. But these successes were restricted to productive formations with unusually low permeabilities. MGI did not improve oil recovery to an appreciable degree from formations with moderate or good permeabilities.

Note: This is the last of a 7-part series.
(26 November 2007)

Oil prices to keep rising as demand grows

ABC News (Australia)
With world oil prices nearly touching $100 a barrel in the past week, we are living through the third great energy shock of the post-war era. But this time, demand from India and China means that prices are unlikely ever to go down again.

… A new Australian study says the problem in the two earlier oil shocks was with supplies of oil. This time, study author Professor Michael Wesley says, the problem is that demand is unlikely to subside.

“The growth in the consumption of oil and oil products by predominantly the United States, China and India is rapidly outstripping the ability of the oil market to supply those amounts and this will inexorably drive up the price of oil,” he said.

Professor Wesley predicts that this time, the prices won’t drop back.

“The previous two oil shocks in 1973, 74 and in 1979-1980 were supply-side shocks,” he said.

“They were generated by the inability or the unwillingness of key suppliers to put adequate supplies of oil onto world markets.

“Now they were stopped and stopped reasonably abruptly when the suppliers simply restored supplies to world markets.

“There are supply-side problems this time, but even if all of those problems are resolved tomorrow, the demand-side pressures will continue to grow and will continue to put upward pressure on oil prices.”

…Professor Wesley predicts Asian countries will start factoring energy into their security calculations, but does not see oil wars on the horizon.

“I think the major powers of Asia certainly are starting to factor energy into their calculations, but they have also made the judgment, I think, that this is not something that any one country can do on its own,” he said.
(25 November 2007)
Transcript and audio of an ABC interview with Professor Wesley.

The ABC article does not give any details on the study authored by Professor Wesley, and I didn’t see anything resembling it on the Web. -BA

Norway sees no respite to high oil prices

Wojciech Moskwa and Alister Doyle, Reuters
OSLO – Oil prices will probably remain high for “a while ahead” due to global uncertainty, especially in the Middle East, Norway’s Petroleum and Energy Minister Aaslaug Haga told Reuters on Monday.

She said non-OPEC Norway, the world’s fifth-largest oil exporter with about 2.4 million barrels per day, had little ability to increase production in the short-term.

…“Certainly a few years ago we did not think it would be possible to have oil prices this high. We thought the world’s economy would collapse,” Haga said.

“There are lots of dilemmas involved in an oil price as high as it is now. One of my main worries is for countries and people in the developing world,” she said.

She said that Norway’s oil output has decreased more than expected over the past years as its North Sea oilfields mature but voiced hope that increased exploration activity could help arrest the trend in the longer-term.

“In a short-term we have very small possibilities for increasing production,” she said. “What we can do and are doing is increase activities for searching for oil and gas. Exploration activity has been very low and is now increasing.”
(26 November 2007)