BP strikes 'giant' oil well in Gulf of Mexico

Post by **kenneal - lagger** » 02 Sep 2009, 23:13

The rate of extraction of this oil will be key, not the absolute amount. Peak oil will be real if the extra rates of extraction are less than the rate of depletion, not just one year but year on year. So we have to find the dame again next year or the year after.

From my interested amateur status, I take it that the deeper the oil the more expensive it is to drill and the longer it will take to ramp up production, obviously depending on the porosity of the oil bearing rock. From that I suppose that the deeper the oil, the lower the production rate is likely to be.

Is that correct, RGR?

fifthcolumn · Post by **fifthcolumn** » 02 Sep 2009, 23:17

kenneal wrote:The rate of extraction of this oil will be key, not the absolute amount. Peak oil will be real if the extra rates of extraction are less than the rate of depletion, not just one year but year on year. So we have to find the dame again next year or the year after.

Agreed. Good summary ken.
The only addition is this:

Peak oil [effects] will be real if
the depletion rates less replacement rates less substitution less demand destruction are large.

Will they be?

RGR · Post by **RGR** » 02 Sep 2009, 23:47

[quote="kenneal"]

Vortex · Post by **Vortex** » 03 Sep 2009, 09:09

Colour it how you like Biff, it's not because of peak oil.

Err ... my original famine comment was an analogy ... not an attempt to spawn a discussion on famine ...

Yves75 · Post by **Yves75** » 03 Sep 2009, 09:11

RalphW wrote:What is 'capacity' - is it proven, probable or possible reserves, or resource, or original oil in place? I wish the press was more precise.

3 billion barrels. Enough to supply the world for 37 days, or keep the US self-sufficient for a year or two.

This is without factoring the recovery rate, from the wsj :

BP's discovery, on a field called Tiber, is one of the deepest oil fields ever drilled. Lying more than 10 kilometers underground, it probably holds more than the 3.0 billion barrels of oil equivalent, or boe, that BP found at the nearby Kaskida field in 2006, said spokesman Robert Wine. At a 20%-30% recovery rate, which would be typical for this kind of field, Tiber could contain recoverable reserves of 600 million to 900 million boe, said NCB Stockbrokers analyst Peter Hutton.

http://online.wsj.com/article/BT-CO-200 ... 09422.html

So 900/84=10.7

11 days of world consumption

What strikes me the most here is that this discovery is described as "giant" ...

PaulS · Post by **PaulS** » 03 Sep 2009, 09:58

fifthcolumn wrote: 3 million barrels per day is a billion barrels a year.

So we can push off peak oil by an entire year with this one field alone or else we can offset the decline rate by 0.5 percent for six years.

So if we find only another 12 billion barrels then peak oil is pushed off for another six years and we remain on plateau for that length of time.

Call me whatever you like, but suits me sir. I'll take it.

I think there are two problems with this argument

1. This oil will not help now, it will only help in say 10 years time. By then depletion will be in the order of 40%. Discoveries already in the pipeline may reduce that to perhaps 20%, but on the other hand export reduction will counter act that.

Also not all that oil is recoverable.

So we now need to discover enough to bridge this gap in ten years time, or roughly 6-8 of similar 'giant' oil fields.

2. In the meantime, the already existing depletion coupled with reduction in investment, is causing saw tooth shaped depression. That will cause the oil price to fluctuate wildly, making it impossible to invest in either oil or alternatives. (Unless Governments provide some kind of guarantee)

Vortex · Post by **Vortex** » 03 Sep 2009, 10:08

We ALL need all, in some form or other. Recessions will 'trim the fat' in consumption ... but then a hard limit will be reached.

Fluctuation or not, once oil supply drops to say 10% or 20% of today's output, the price of oil will be HIGH.

This should sustain investments in the industry.

Vortex · Post by **Vortex** » 03 Sep 2009, 10:28

11 days of world consumption

What strikes me the most here is that this discovery is described as "giant"

Hmm ... so we should be seeing an announcement like this about once a month.

Or similar announcements relating to improved extraction rates .... or ... <trumpet fanfare> ... Reserve Growth ... at existing sites.

So, are we indeed replacing current consumption with significant but unannounced discoveries/optimisations ... or .. are we sliding down a rather nasty slope, where addition of ANY additional oil source is regarded as a major event?

(Yes, I'm being lazy - I'm sure I can find the answer in the BP Annual Report)

PS_RalphW · Post by **PS_RalphW** » 03 Sep 2009, 11:36

Note that the report is of boe (barrels of oil equivalent) - some or all of the find is probably natural gas. The deeper you drill, the warmer it gets, and more of the oil is cooked to ng. The gulf of Mexico has a shallower heat profile than most, but 7 miles is very deep.

The estimate I have seen is that peak flow rate will be 200,000 bpd in 2020. That is useful, but if existing fields decline at 5% post peak, then you would need one of these discoveries every 6 weeks to offset decline, let alone build supply.

Bandidoz · Post by **Bandidoz** » 03 Sep 2009, 14:39

PaulS wrote:
fifthcolumn wrote:So we can push off peak oil by an entire year with this one field alone or else we can offset the decline rate by 0.5 percent for six years.

So if we find only another 12 billion barrels then peak oil is pushed off for another six years and we remain on plateau for that length of time.
I think there are two problems with this argument

Three - that the 4% decline per year will probably be compound rather than a linear slope.

Aurora · Post by **Aurora** » 07 Sep 2009, 08:27

The Guardian - 07/09/09

Scraping the barrel

Your article (Big BP discovery refuels debate over 'peak oil', 3 September) gets it wrong. The peak oil debate is complex and mainly revolves around how much oil Opec really have and how much oil can be recovered from fields that have already been discovered. In the two years and hundreds of interviews I carried out for my 2008 film PetroApocalypseNow?, nobody claimed that new discoveries could avert the peak of global oil production. In fact for 50 years, the amount of oil discovered has been steadily dropping and for 30 it has been less than we consume. A 5bn barrel discovery, though extremely lucrative, is only two months' global consumption. The difficulty of BP's remarkable discovery is evidence that as far as oil exploration is concerned we are now scraping the bottom of the barrel.

Andrew Evans

Carnevale Films

Original Article