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AGAIN!!!JavaScriptDonkey wrote:Will Iraq's Energy Boom postpone Peak Oil Again?
Yes! Good luck! They'll need it.As a signed-up member of the cheap peak oil club – not quite the same as peak oil – I am watching this with great interests.
As the IEA says, this will require $530 billion of new investment. "The obstacles are formidable: political, logistical, legal, regulatory, financial, lack of security and insufficient skilled labour," it said.
Good luck to the Iraqis. Let us hope that they – with the help of BP, Shell, Exxon, et al – can pull it off.
Ambrose, from reading these comments I think that, if you
want to tell people something about oil, you should do an article on the
difference between 1P and 2P reserves.
Just a very quick and humble attempt here for those people who still think
global reserves are growing:
1P means "proven" reserves. This is a strict business/accounting term,
regulated by the SEC. It tells investors how much oil is proved with very high
certainty to be in place so that they can make financial/investment decisions.
2P means "proven and probable". It is this figure which is really of
interest to oil executives as it defines the LIKELY recoverable oil in the
reservoir. It is calculated using a probabilistic approach so it is not
appropriate for external investors to rely on because for any given field it
can be out by quite a bit. As with all statistically determined variables
however, when you add a huge number of them together, the standard deviation
gets tighter and tighter relative to the size of the sample and so if you add
up all the 2P reserves in the world you get a fairly accurate picture of how
much oil there has been discovered.
Here's the important thing:
When a new field is commissioned, at the start 2P is always much higher than
1P. As soon as 1 barrel of oil is extracted, 2P reserves are reduced by 1
barrel, and will continue to fall through the life of the field*
1P reserves however continue to RISE for quite some time as the field is
exploited. No new oil is being discovered, but as more and more wells are being
drilled and hard data being obtained, more of that reservoir falls within the
strict definition of 1P reserves. Only towards the end of the life of the
field, when no more wells are being drilled will 1P begin to fall, and at that
point 1P and 2P will be roughly the same.
It is as a result of these definitions that global 1P reserves continue to rise
even now (reported very mischievously by BP), while 2P reserves have been
falling for some time now. We are NO LONGER discovering more oil than we are
consuming each year.
* Actually 2P is also adjusted as and when more is discovered about each
reservoir, but it can go down as well as up. One thing which tends to push it
up more a bit more than down is extraction technology improvements, but this
has not been enough recently to offset the very low volumes being discovered versus
high volumes being consumed
Actually, Ralph, Stuart Staniford who said Iraqi oil production could reach 12Mbo/d by 2020 which, if I remember rightly, was given a right panning by the resident experts at The Oil Drum.RalphW wrote:
Only a couple of years ago Iraq was confidently predicting 12Mpb production by 2020. They are letting their more niave investors down gently.
That might sound a lot, but to put that into context Dieter Helm recently ran the numbers for how much is required for renewing/updating Britain's energy, transport and water infrastructure, and came back with a figure of £540 billion! ($864 billion)kenneal - lagger wrote:As the IEA says, this will require $530 billion of new investment.
Totally agree. The chance are remote that Iraq will magically turn into a stable pro-private business country which investors will flood money in in the near future.adam2 wrote:To significantly increase Iraqs oil production will require a great deal of investment, and possibly imported expertise.
It appears unlikely that anyone will risk a lot of capital until peace and stability breaks out, and looks lasting.
That seem unlikely in the near term.
By the time the oil can be exploited on a large scale it will be too late to make for declines elswhere.
Slow the overal rate of decline ? certainly.
Reverse the overall decline ? no way.
In the grand scheme of things this, on its own could be viewed as symbolic, however:Moscow announced on Tuesday that Iraqi Prime Minister Nouri al-Maliki was in town and the two countries signed contracts worth "more than" US$4.2 billion in an arms deal that includes Iraq's purchase of 30 Mi-28 attack helicopters and 42 Pantsir-S1 surface-to-air missile systems
There is a growing possibility that the Iraqi oil will not end up in the Western market place after all.The joint Russian-Iraqi statement issued in Moscow revealed that discussions had beem going on for the past five months over the arms deal and that further talks are under way for Iraq's purchase of MiG-29 jets, heavy-armored vehicles and other weaponry. A Kremlin announcement said Maliki is due to meet President Vladimir Putin on Wednesday and the focus of the discussions will be energy cooperation between Russia and Iraq.
Or geopolitics in deciding where the oil flows. Energy = power in more ways than one.RalphW wrote:But Russia is a major exporter of oil itself. Why would it want Iraqi oil? This is simply Russian expertise for Iraqi dollars/Rial/Reserve currency of choice.
I thought it was because of that special shopping centre that Putin runs on the edge of Moscow -- "Dictators R Us"raspberry-blower wrote:There is a growing possibility that the Iraqi oil will not end up in the Western market place after all.