Oil producers - May 25
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Non-OPEC oil output growth slows to a trickle
Jane Merriman, Reuters
Oil production from countries outside OPEC is stagnating despite a more than sixfold rise in oil prices since 2002, driven partly by the failure of non-OPEC producers to deliver a lot more oil.
A Reuters survey of 12 analysts put the consensus forecast for non-OPEC oil supply in 2008 at 49.56 million barrels per day (bpd), down from 50.36 million bpd estimated in the previous poll in March.
... Annual non-OPEC supply growth in 2008 is averaging 680,000 bpd, according to the International Energy Agency's latest Oil Market Report.
But biofuels contributed 425,000 bpd of this total, making non-OPEC oil growth just 255,000 bpd.
(23 May 2008)
Pemex Says April Oil Output Drop Biggest in 12 Years
Andres R. Martinez, Bloomberg
Petroleos Mexicanos, the state-owned oil company, said April crude production fell the most in more than 12 years as output at its largest field declined faster than the company forecast.
Crude oil production fell 13 percent to 2.767 million barrels a day in April, Mexico City-based Pemex, as the company is known, said today on its Web site. Output a year earlier was 3.182 million barrels a day. The decline was the largest since October 1995, when output fell 29 percent.
(23 May 2008)
Mexican oil production falls 9 percent in first four months of year
Associated Press via IHT
Mexico's state-run oil company says output fell 9 percent to 2.87 million barrels a day in the first four months of the year, as production at its biggest oil field sagged.
Petroleos Mexicanos said Friday that output at its main Cantarell oil field dropped by 416,000 barrels a day, or 26 percent over the same period last year.
(23 May 2008)
The Sum of Many Hopes and Fears About the Energy Resources of the Middle East
Ferdinand E. Banks, Energy Pulse
... Regardless of what you have heard or will hear, read or will read, thought or will think and regardless of the assurances that the oil and gas exporters in the Middle East give or will give, it is doubtful whether those exporters are able or for that matter willing to provide the energy resources that their customers desire or will come to desire, at prices resembling those of the recent past.
And here I ask my favourite question: would you supply these resources if you were in their place?
... The agenda of the foreign producers in Saudi Arabia ostensibly featured a progressive raising of oil production to twenty million barrels of oil per day (= 20mb/d), and keeping it there as long as it made economic sense - i.e. was profitable. The thing to be understood is that the strategy underlying this production profile turned on maximizing profits over a limited time horizon, and here I want to emphasize that the choice of a time horizon was as important or even more important than other components of their production strategy, which is an observation that you did not encounter in Economics 101. You didn’t encounter it because the teachers of Economics 101 do not know how to handle the production of exhaustible resources like oil. However, after the assets of these companies were confiscated by their previous hosts, a very different agenda was introduced
The apparent intentions of the confiscating governments, and especially Saudi Arabia, also turned on maximizing profits, although over a much longer time horizon. In addition, when the opportunity presented itself, these profits were to be used to diversify their economies in such a way that the main source of prosperity would be reproducible capital - i.e. structures and machines - rather than exhaustible natural resources such as oil and gas. The opportunity arrived in full bloom when the price of oil suddenly exceeded 40 or 50 dollars per barrel, because those prices gave the governments of many oil producing countries the kind of freedom that President Bush and his colleagues believe only comes about by living or trying to live the American Dream. Everyone who has watched CNN or the U.S. program ‘60 Minutes’ has probably seen a brilliant example of this process in that lucky and superbly managed country Dubai. Returning to the agenda for Saudi Arabia, ‘sustainable’ oil production over an indefinite future was envisaged at about 10 mb/d, or less, while an additional 1-2 million barrels per day were to constitute surge capacity (which is capacity intended for use over a short period).
Notice the or less in the above, because the present King Abdullah of Saudi Arabia recently said that the world cannot count on large increases in the output of his country after 2010, which is interesting because some observers think that today’s oil production is less than Saudi production a year ago.
Needless to say, this kind of thinking and acting on the part of Middle Eastern governments did not win approval everywhere, although I want to confess that it made all the sense in the world to me.
(21 May 2008)
Contributor Michael Lardelli writes:
Very interesting (and long) essay from Ferdinand Banks.