The bi-annual oil industry conference and exhibition takes place in Aberdeen from Sept 06 - 09. The conference tomorrow will focus on depletion and I've extracted this (extremely optimistic) section from the agenda:
<Panel Debate: Delaying the Production Peak
Session Chairs: Steve Harris, UKOOA & Steve Whittaker, Schlumberger
Industry analysts continue to debate over how and when global oil production will peak. But there is probably a consensus that the easy oil has been found and that we can expect a fall from worldwide peak levels at the very latest by 2050. Production in non-OPEC areas, and by Major operators, may fall even earlier, perhaps by 2025. >
Full conference agenda here: http://www.offshore-europe.co.uk/confer ... ramme.aspx
I've applied for a ticket to the event and received same today; accordingly I plan to attend tomorrow and will report back on what is discussed. Personally I can't relate to their long delayed timeframes re peaking at all but it will be interesting to see how they justify such dates v current 84m bopd and 3.7% pa exponential growth - that equals no less than 433m bopd by 2050!
Offshore Europe 2005 - Delaying the Peak?
Moderator: Peak Moderation
Conference Notes - Delaying the Peak?
I attended the Offshore Europe 2005 Conference in Aberdeen on Sept 06, 2005. Subjects were: ?Reserves Recovery and Decline: A Global Perspective? and ?Delaying the Production Peak?. I took as many ?bullet point? notes as I could but in some cases the material being presented moved too fast to capture everything but I think the following notes contain most of the highlights. To date I?m only aware of one of the presentations (John Westwood) being available online; I?ll be in touch with the organisers shortly to try to obtain links for the other material. I?m away back to the Exhibition today but will try to respond to questions later today or tomorrow. As a reminder the conference program can be viewed here: http://www.offshore-europe.co.uk/confer ... ramme.aspx
My notes follow with any of my own comments added in squared brackets i.e. [ ] :
Andrew Gould ? Schlumberger (in his opening address)
- We would do well to remember 1980?s oil price collapse.
- Lack of investment has left little spare capacity.
- Reserves large but finite.
- Non conventional oil will become more important.
- New developments would be very challenging ? deepwater, harsh environment or involve the national oil companies.
Mahmoud Abdul-Baqi - Saudi Aramco
- Assumed demand would add 22m bopd between 2004 and 2020 i.e. robust growth.
- Plenty of supply, no November 2005 peak.
- Proven reserves 1 trillion bbls +; an equivalent amount extra can be made available via new technology
- Huge volume non conventional and heavy oil.
- Big capital investment required would be a challenge, need to start right now.
- Need to drive down cost of development.
- Become more open on sharing ideas and technology.
- Biggest challenge is attracting enough high calibre people.
- SA 260+ Gbbls proven reserves as at end 2004, 85 fields.
- Large promising areas of SA under-explored, 100+ Gbbls undiscovered (a figure which USGS agree with)
- SA output 10m bopd in 1994 rising to 12m bopd in 2010.
- Currently producing a sustainable 11m bopd
- SA always keeps 1.5m bopd in reserve.
Tom Botts - Shell
- Capacity 97m bopd rising to 124m bopd by 2025 [I don?t know how they arrived at the 97m figure[
- Smart systems & intelligent wells revive old fields, raise recovery by up to 8% and decrease costs
- Upbeat re European energy prospects
- Brent still producing more energy in 2002 than entire world renewables (wind & solar) despite 75% decline.
Dave Blackwood ? BP
- IEA forecast oil comprised 35% world energy in 2003 and would still provide 34% in 2030
- IEA forecast gas comprised 21% world energy in 2004 rising to 25% in 2030
- UK %ages in 2004 ? oil 32%, gas 42%, coal 17%, NP 7%, Renewables 2%
- As above for 2020 ? 37, 48, 7, 3, 5 (source for both 2004 and 2020 ? DTI)
- UK has produced ?something over half recoverable NS reserves?
- Need to increase resource base, maintain infrastructure life, maximise and accelerate recovery
- BP N Sea staff stats ? 41% offshore staff > 45 yrs old
- BP staff overall N Sea ? 36% > 45, 49% 30 ? 45, 15% < 30.
- Big problem with ageing workforce.
- Showed graph showing NS would produce 0.3m BOE in 2020 but had an extra 1.5m BOE potential in 2020.
- Current NS production 3.5m BOE. [Turned graph around to show the 1.5m (above) as growth !!]
Nigel Hares ? Talisman Energy
- Presented IEA forecast chart v ?the growing gap? chart which showed source as Colin Campbell.
- IEA chart assumed 3T bbls conventional v 1.9T on Colin?s chart.
- Even to get to 2.4T would require significant improvement (in recovery)
- We are taking out 28 Gbbls pa and putting back 6 Gbbls pa (by discoveries)
- Showed chart of multiple conventional EUR?s, IEA?s 3T was much higher than the rest!
- Forecast [presumably IEA?s] had 7.5m bopd coming from fields not yet even booked.
- To increase production requires more activity, people, rigs etc and to avoid fiscal changes which discourage exploration.
- IEA projections are a very major challenge, strive to achieve same will add to costs.
- Showed graph of independent?s NS involvement v other mature basins ? move from majors to independents in NS still has way to go.
Michael Benezit ? Total
- Need to replace reserves otherwise industry dies
- $60/bbl not enough to push consumers into reducing demand
- Scarcity of big new projects
- International oil co?s had shown no reserve growth in 2004 v 2003.
- N Sea drilling costs had doubled in a year.
- Skill shortages, need pool of talented geoscientists.
- 7 Majors control just 4% of reserves.
- Gas reserves 190 T cu m = 70 years? supply at current consumption rates
- Oil reserves (1188 Gbbls conventional) = 40 years? supply at current consumption rates
- Gas reserves 1074 G BOE.
Luis Vierma ? PDVSA
- 1138 Gbbls oil (247 Gbbls non OPEC, 801 Gbbls OPEC)
- 6349 TCF gas (3216 TCF non OPEC, 3133 TCF OPEC)
- Cheap oil gone, new price floor $35 ? 40 / bbl
- Demand growth by region 2010 v 2004 (bopd) ? US 2.4, Asia 4.3, EU 0.9, Latin Am 0.9, FSU 0.7, ME 1.0, Africa 0.4; Total 10.6.
- Rig shortage ? 2k rigs now v 6k rigs in 1980?s.
- OPEC spare capacity 15m bopd in 1980?s v <2m bopd now.
- Spare refining capacity down from 8m bopd to 4m bopd since 2002.
- No new refineries built in past 25 years.
- By 2010 refining ?deficit? will be 6.8m bopd of which US will be 1.4m bopd, EU 0.3m bopd and Asia 2.1m bopd
- SA, Iran, Venezuela and Kuwait will peak c2020.
- Venezuela has largest reserves of light oil as of now.
- Venezuela could produce 7.5m bopd in 2020 [did not capture whether heavy or light] and still be producing in 2100.
- Presented population and temperature chart v fossil fuel consumption since c1860.
- Are we looking to keep planet safe or just consume energy?
- H2 will have to come from either water or hydrocarbons
- Industry can no longer ?walk into areas? to exploit oil & gas without local consent.
- Need to eradicate lack of access to efficient energy sources in poor countries.
Q+A Session
In response to questions from floor Andrew Gould responded:
- No one knows when PO is.
- Today?s crisis would have occurred 3 to 4 years earlier without improved recovery.
- Referred to DOE PO Mitigation Report [that?s Hirsch et al], message is to ?fix energy problem early?.
John Westwood ? Douglas-Westwood Ltd
- PO 2010, peak gas 2030+
- No viable alternative to oil for transport in reasonable timescale
- OPEC cannot satisfy demand
- 52 oil producers > 5 years past peak
- 1.5% growth indicates 2013 supply crunch BUT 3.6% growth in 2004
- If we get a panic the switch to dirty fuels will wipe out a decade?s environmental gain.
- Gov?ts must stop subsidising oil consumption.
- Message is CONSERVE.
(Full presentation available for download at: http://www.dw-1.com/ ).
Thomas Andersen ? Maersk
- Enhanced recovery is way forward
Wim Schinkel ? Shell
- No ?silver bullet? i.e. no single solution to energy problem
Q+A Session
- In response to Q re SERA report John Westwood referred to quality of info and Matt Simmons? concerns.
- Q re DTI assumption of $35/bbl in real terms ?are we heading for price bubble?? Panel?s view - ?cheap energy over?.
Robert Estill ? Marathon
- Reserve replacement getting tougher.
- ?People? constraint
- Marathon built last US refinery at Garyville in 1976.
Robert Olsen ? ExxonMobil
- Natural oil decline 4 ? 6% pa
- By 2030 world needs to bring on new oil production > today?s world consumption.
- Double digit growth in renewable energy but will still only provide 1% of demand in 2030 (BP say 2%)
- IEA estimate oil industry spending needs to be $200 bn pa for 25 years.
- Estimate 3.2T bbls conventional oil, 1T produced to date (this leaves 2.2T)!
- EHO (extra heavy oil) / oil sands ? 4T bbls in place, up to 1T recoverable
- Shale oil ? 3T bbls in place, up to 700 Gbbls recoverable (eventually)
- N Sea prod?n to date 34 Gbbls, could be another 28 G BOE recoverable
- Only the one window in N Sea ? while existing infrastructure is still in place
- State of the art seismic has raised expl well success rate from 1 in 10 to 5 in 10 over past 30 years
- Shakalin Island ? now drilling 10km extended reach wells
- Deepwater ? now wells drilling in 1000m+ water depth
- LNG will be supplying 25% of world?s energy needs by 2030
- New LNG plants in Qatar, capacity 7.8m tonnes pa (1 TCF/d)
- LNG terminal in Milford Haven (UK) can receive 15.8m tonnes pa from Qatar
- Technology is key to the future
Q + A Session
- Q ? Is there a crisis? A (Olsen) Reserves are there, we must develop them. A (Westwood) Everyone has to play a part incl consumers.
- Q ? Is there an industry wide risk assessment as could be ?tail spin? if major disruption occurs. A No, risk assessment only on indiv Co basis.
- Additional comment from panel ? big barrier to new projects was ?politics?, in some cases projects were approved + funded by Co. but stalled due to politics.
- Comment made during discussion [did not capture by whom] that world demand would exceed refinery capacity by 2008 and refineries took 4 years + to build and none were in planning stage right now.
Overall comments
The morning session (up to and including Malcolm Wicks? presentation) was very well attended; estimate 400. The afternoon session was much less attended, estimate around 100. As might have been expected presenters from the oil majors did not really go into peak oil but more focussed on the steps their company thought was necessary to extend field life and enhance recovery. One even showed a qualifying slide before speaking (as required by his co?s lawyers) which stated ?the views were his own and not the company?s?. With the exception of the presentation by Nigel Hares (Talisman) and John Westwood (independent consultant) and, to some extent, the presentations by Benezit and Vierma, I formed the impression that the other presentations really focussed on how each individual speaker?s company would address the more difficult exploration and production era (and thus maintain shareholder value as opposed to gradually liquidating the company). Providing enough oil at the wellhead or refinery for the world is not really their remit and, to be fair, the Total speaker clearly stated that the ?7 largest oil majors only controlled 4% of world reserves?. I also felt, deep down? that (with the exception of Saudi Aramco speaker) they all knew ?the writing is on the wall? especially for conventional oil.
The Saudi Aramco speaker delivered an extremely upbeat message with regard to ongoing SA ability to supply; Ghawar was never mentioned. He did, however, make the specific point of ?no Nov?05 peak? so it sounds like Ken Deffeyes? prediction had struck a chord. Despite his upbeat statements I captured the key point that SA output was only going to increase by 1m bopd by 2010 based on Saudi Aramco?s own estimates (and that assumes they really are producing 11m bopd now). Running my own calculations this SA output increase would only cover about 8 months? world ?type 3 depletion? which will equal at least 1.4m bopd pa from 2006 onwards; it would do nothing to address future demand growth. Furthermore I didn?t hear any claim that the (promised) new SA output would be LSC (therefore I?d conclude much of it will be heavy sour crude).
The theme of some of the speakers, especially those from 'big oil' was both greater and accelerated recovery. No one appeared to address the issue of what happens 'on the other side of the mountain' i.e. the downslope of Hubbert's curve following techniques such as rapid ramping up of new developments and accelerated recovery. In the absence of their comments I'll 'fill in the blanks for them' - much faster decline rates as we have seen, for example in North Sea and Yemen's Yibal field. US lower 48 was mainly developed using traditional oilfield technology and decline rates of between 1.6% and 3% have been noted. New oilfield technology was heavily applied in UK NS more or less since inception hence c10% decline rates and whole province's output is down 40% from peak in just 5 years. To quote Matt Simmons - 'does use of NT lead to a 'monster ball' of depletion?' Judging by NS the answer is yes!
At the end of the meeting I had an opportunity to talk to one of the participants who had expressed serious concerns re future supply / demand balance. I explained that I?d had a 30 year career in E+P and he told me that ?lots of people with similar background in the industry were also telling him of their concerns?. In other words given the profile of many of those who were worried about PO Gov?ts should be listening (but as of yet they don?t appear to be doing so).
My notes follow with any of my own comments added in squared brackets i.e. [ ] :
Andrew Gould ? Schlumberger (in his opening address)
- We would do well to remember 1980?s oil price collapse.
- Lack of investment has left little spare capacity.
- Reserves large but finite.
- Non conventional oil will become more important.
- New developments would be very challenging ? deepwater, harsh environment or involve the national oil companies.
Mahmoud Abdul-Baqi - Saudi Aramco
- Assumed demand would add 22m bopd between 2004 and 2020 i.e. robust growth.
- Plenty of supply, no November 2005 peak.
- Proven reserves 1 trillion bbls +; an equivalent amount extra can be made available via new technology
- Huge volume non conventional and heavy oil.
- Big capital investment required would be a challenge, need to start right now.
- Need to drive down cost of development.
- Become more open on sharing ideas and technology.
- Biggest challenge is attracting enough high calibre people.
- SA 260+ Gbbls proven reserves as at end 2004, 85 fields.
- Large promising areas of SA under-explored, 100+ Gbbls undiscovered (a figure which USGS agree with)
- SA output 10m bopd in 1994 rising to 12m bopd in 2010.
- Currently producing a sustainable 11m bopd
- SA always keeps 1.5m bopd in reserve.
Tom Botts - Shell
- Capacity 97m bopd rising to 124m bopd by 2025 [I don?t know how they arrived at the 97m figure[
- Smart systems & intelligent wells revive old fields, raise recovery by up to 8% and decrease costs
- Upbeat re European energy prospects
- Brent still producing more energy in 2002 than entire world renewables (wind & solar) despite 75% decline.
Dave Blackwood ? BP
- IEA forecast oil comprised 35% world energy in 2003 and would still provide 34% in 2030
- IEA forecast gas comprised 21% world energy in 2004 rising to 25% in 2030
- UK %ages in 2004 ? oil 32%, gas 42%, coal 17%, NP 7%, Renewables 2%
- As above for 2020 ? 37, 48, 7, 3, 5 (source for both 2004 and 2020 ? DTI)
- UK has produced ?something over half recoverable NS reserves?
- Need to increase resource base, maintain infrastructure life, maximise and accelerate recovery
- BP N Sea staff stats ? 41% offshore staff > 45 yrs old
- BP staff overall N Sea ? 36% > 45, 49% 30 ? 45, 15% < 30.
- Big problem with ageing workforce.
- Showed graph showing NS would produce 0.3m BOE in 2020 but had an extra 1.5m BOE potential in 2020.
- Current NS production 3.5m BOE. [Turned graph around to show the 1.5m (above) as growth !!]
Nigel Hares ? Talisman Energy
- Presented IEA forecast chart v ?the growing gap? chart which showed source as Colin Campbell.
- IEA chart assumed 3T bbls conventional v 1.9T on Colin?s chart.
- Even to get to 2.4T would require significant improvement (in recovery)
- We are taking out 28 Gbbls pa and putting back 6 Gbbls pa (by discoveries)
- Showed chart of multiple conventional EUR?s, IEA?s 3T was much higher than the rest!
- Forecast [presumably IEA?s] had 7.5m bopd coming from fields not yet even booked.
- To increase production requires more activity, people, rigs etc and to avoid fiscal changes which discourage exploration.
- IEA projections are a very major challenge, strive to achieve same will add to costs.
- Showed graph of independent?s NS involvement v other mature basins ? move from majors to independents in NS still has way to go.
Michael Benezit ? Total
- Need to replace reserves otherwise industry dies
- $60/bbl not enough to push consumers into reducing demand
- Scarcity of big new projects
- International oil co?s had shown no reserve growth in 2004 v 2003.
- N Sea drilling costs had doubled in a year.
- Skill shortages, need pool of talented geoscientists.
- 7 Majors control just 4% of reserves.
- Gas reserves 190 T cu m = 70 years? supply at current consumption rates
- Oil reserves (1188 Gbbls conventional) = 40 years? supply at current consumption rates
- Gas reserves 1074 G BOE.
Luis Vierma ? PDVSA
- 1138 Gbbls oil (247 Gbbls non OPEC, 801 Gbbls OPEC)
- 6349 TCF gas (3216 TCF non OPEC, 3133 TCF OPEC)
- Cheap oil gone, new price floor $35 ? 40 / bbl
- Demand growth by region 2010 v 2004 (bopd) ? US 2.4, Asia 4.3, EU 0.9, Latin Am 0.9, FSU 0.7, ME 1.0, Africa 0.4; Total 10.6.
- Rig shortage ? 2k rigs now v 6k rigs in 1980?s.
- OPEC spare capacity 15m bopd in 1980?s v <2m bopd now.
- Spare refining capacity down from 8m bopd to 4m bopd since 2002.
- No new refineries built in past 25 years.
- By 2010 refining ?deficit? will be 6.8m bopd of which US will be 1.4m bopd, EU 0.3m bopd and Asia 2.1m bopd
- SA, Iran, Venezuela and Kuwait will peak c2020.
- Venezuela has largest reserves of light oil as of now.
- Venezuela could produce 7.5m bopd in 2020 [did not capture whether heavy or light] and still be producing in 2100.
- Presented population and temperature chart v fossil fuel consumption since c1860.
- Are we looking to keep planet safe or just consume energy?
- H2 will have to come from either water or hydrocarbons
- Industry can no longer ?walk into areas? to exploit oil & gas without local consent.
- Need to eradicate lack of access to efficient energy sources in poor countries.
Q+A Session
In response to questions from floor Andrew Gould responded:
- No one knows when PO is.
- Today?s crisis would have occurred 3 to 4 years earlier without improved recovery.
- Referred to DOE PO Mitigation Report [that?s Hirsch et al], message is to ?fix energy problem early?.
John Westwood ? Douglas-Westwood Ltd
- PO 2010, peak gas 2030+
- No viable alternative to oil for transport in reasonable timescale
- OPEC cannot satisfy demand
- 52 oil producers > 5 years past peak
- 1.5% growth indicates 2013 supply crunch BUT 3.6% growth in 2004
- If we get a panic the switch to dirty fuels will wipe out a decade?s environmental gain.
- Gov?ts must stop subsidising oil consumption.
- Message is CONSERVE.
(Full presentation available for download at: http://www.dw-1.com/ ).
Thomas Andersen ? Maersk
- Enhanced recovery is way forward
Wim Schinkel ? Shell
- No ?silver bullet? i.e. no single solution to energy problem
Q+A Session
- In response to Q re SERA report John Westwood referred to quality of info and Matt Simmons? concerns.
- Q re DTI assumption of $35/bbl in real terms ?are we heading for price bubble?? Panel?s view - ?cheap energy over?.
Robert Estill ? Marathon
- Reserve replacement getting tougher.
- ?People? constraint
- Marathon built last US refinery at Garyville in 1976.
Robert Olsen ? ExxonMobil
- Natural oil decline 4 ? 6% pa
- By 2030 world needs to bring on new oil production > today?s world consumption.
- Double digit growth in renewable energy but will still only provide 1% of demand in 2030 (BP say 2%)
- IEA estimate oil industry spending needs to be $200 bn pa for 25 years.
- Estimate 3.2T bbls conventional oil, 1T produced to date (this leaves 2.2T)!
- EHO (extra heavy oil) / oil sands ? 4T bbls in place, up to 1T recoverable
- Shale oil ? 3T bbls in place, up to 700 Gbbls recoverable (eventually)
- N Sea prod?n to date 34 Gbbls, could be another 28 G BOE recoverable
- Only the one window in N Sea ? while existing infrastructure is still in place
- State of the art seismic has raised expl well success rate from 1 in 10 to 5 in 10 over past 30 years
- Shakalin Island ? now drilling 10km extended reach wells
- Deepwater ? now wells drilling in 1000m+ water depth
- LNG will be supplying 25% of world?s energy needs by 2030
- New LNG plants in Qatar, capacity 7.8m tonnes pa (1 TCF/d)
- LNG terminal in Milford Haven (UK) can receive 15.8m tonnes pa from Qatar
- Technology is key to the future
Q + A Session
- Q ? Is there a crisis? A (Olsen) Reserves are there, we must develop them. A (Westwood) Everyone has to play a part incl consumers.
- Q ? Is there an industry wide risk assessment as could be ?tail spin? if major disruption occurs. A No, risk assessment only on indiv Co basis.
- Additional comment from panel ? big barrier to new projects was ?politics?, in some cases projects were approved + funded by Co. but stalled due to politics.
- Comment made during discussion [did not capture by whom] that world demand would exceed refinery capacity by 2008 and refineries took 4 years + to build and none were in planning stage right now.
Overall comments
The morning session (up to and including Malcolm Wicks? presentation) was very well attended; estimate 400. The afternoon session was much less attended, estimate around 100. As might have been expected presenters from the oil majors did not really go into peak oil but more focussed on the steps their company thought was necessary to extend field life and enhance recovery. One even showed a qualifying slide before speaking (as required by his co?s lawyers) which stated ?the views were his own and not the company?s?. With the exception of the presentation by Nigel Hares (Talisman) and John Westwood (independent consultant) and, to some extent, the presentations by Benezit and Vierma, I formed the impression that the other presentations really focussed on how each individual speaker?s company would address the more difficult exploration and production era (and thus maintain shareholder value as opposed to gradually liquidating the company). Providing enough oil at the wellhead or refinery for the world is not really their remit and, to be fair, the Total speaker clearly stated that the ?7 largest oil majors only controlled 4% of world reserves?. I also felt, deep down? that (with the exception of Saudi Aramco speaker) they all knew ?the writing is on the wall? especially for conventional oil.
The Saudi Aramco speaker delivered an extremely upbeat message with regard to ongoing SA ability to supply; Ghawar was never mentioned. He did, however, make the specific point of ?no Nov?05 peak? so it sounds like Ken Deffeyes? prediction had struck a chord. Despite his upbeat statements I captured the key point that SA output was only going to increase by 1m bopd by 2010 based on Saudi Aramco?s own estimates (and that assumes they really are producing 11m bopd now). Running my own calculations this SA output increase would only cover about 8 months? world ?type 3 depletion? which will equal at least 1.4m bopd pa from 2006 onwards; it would do nothing to address future demand growth. Furthermore I didn?t hear any claim that the (promised) new SA output would be LSC (therefore I?d conclude much of it will be heavy sour crude).
The theme of some of the speakers, especially those from 'big oil' was both greater and accelerated recovery. No one appeared to address the issue of what happens 'on the other side of the mountain' i.e. the downslope of Hubbert's curve following techniques such as rapid ramping up of new developments and accelerated recovery. In the absence of their comments I'll 'fill in the blanks for them' - much faster decline rates as we have seen, for example in North Sea and Yemen's Yibal field. US lower 48 was mainly developed using traditional oilfield technology and decline rates of between 1.6% and 3% have been noted. New oilfield technology was heavily applied in UK NS more or less since inception hence c10% decline rates and whole province's output is down 40% from peak in just 5 years. To quote Matt Simmons - 'does use of NT lead to a 'monster ball' of depletion?' Judging by NS the answer is yes!
At the end of the meeting I had an opportunity to talk to one of the participants who had expressed serious concerns re future supply / demand balance. I explained that I?d had a 30 year career in E+P and he told me that ?lots of people with similar background in the industry were also telling him of their concerns?. In other words given the profile of many of those who were worried about PO Gov?ts should be listening (but as of yet they don?t appear to be doing so).
Last edited by zceb90 on 08 Sep 2005, 20:07, edited 1 time in total.
Chris
Re: Conference Notes - Delaying the Peak?
Thanks for the notes! Excellent stuff.
That's interesting since it agrees with the Aug report from OPEC where they said non-OPEC was producing 70m and OPEC ~27m. We need to get to the bottom of just what is being counted when global production is stated as ~100m since that's two places talking like that now.zceb90 wrote:Tom Botts - Shell
- Capacity 97m bopd rising to 124m bopd by 2025 [I don?t know how they arrived at the 97m figure]
Wow, I wonder how that compared to other industries.zceb90 wrote:BP N Sea staff stats ? 41% offshore staff > 45 yrs old
- BP staff overall N Sea ? 36% > 45, 49% 30 ? 45, 15% < 30.
- Big problem with ageing workforce.
Useful statistic when people blame the oil majors for the high price of petrol!zceb90 wrote:Michael Benezit ? Total
- 7 Majors control just 4% of reserves.
Are rigs more efficient these days? How is all this new production/drilling that everyone is expected going to happen?zceb90 wrote:Luis Vierma ? PDVSA
- Rig shortage ? 2k rigs now v 6k rigs in 1980?s.
Why would they given that crude supplies are pretty much topped out?zceb90 wrote:- No new refineries built in past 25 years.
-
fishertrop
- Posts: 859
- Joined: 24 Nov 2005, 11:09
- Location: Sheffield
Great contribution from zceb90, give yourself a gold star
With regard to 84mbpd vs 97mpbd total production, I'm guessing that there is no authorititive source for "world production" - eveything is grey and secret when it comes to numbers, right? - and that various repected bodies try and work it out from other data like shipments or traded contracts (nymex et al) maybe?
It is a HUGE difference tho
You know the on-going saga of US military oil usage, with fuel purchased and used outside the US seemingly not appearing on ANY inventory, maybe this could account for some "off book" numbers that are distorting the picture, possibly??
Maybe Tess has access to some reliable numbers
With regard to 84mbpd vs 97mpbd total production, I'm guessing that there is no authorititive source for "world production" - eveything is grey and secret when it comes to numbers, right? - and that various repected bodies try and work it out from other data like shipments or traded contracts (nymex et al) maybe?
It is a HUGE difference tho
You know the on-going saga of US military oil usage, with fuel purchased and used outside the US seemingly not appearing on ANY inventory, maybe this could account for some "off book" numbers that are distorting the picture, possibly??
Maybe Tess has access to some reliable numbers
Just back from the oil show, thanks for the feedback. Somehow the 97m bopd doesn't add up right which just goes to show how right Matt Simmons has been to call for much greater data transparency. John Westwood made the same comment in his address on Tues. pm. From what I've read estimating producing rates is not that scientific (and yet it could be if the will were there) - 'spotters' are reported sitting at the exit to the Gulf counting tankers and estimating how low they are in the water! On this basis I've little faith that the 97m number is for real; general consensus from IEA etc is current 84m bopd world demand.fishertrop wrote:Great contribution from zceb90, give yourself a gold star
With regard to 84mbpd vs 97mpbd total production, I'm guessing that there is no authorititive source for "world production" - eveything is grey and secret when it comes to numbers, right? - and that various repected bodies try and work it out from other data like shipments or traded contracts (nymex et al) maybe?
It is a HUGE difference tho
You know the on-going saga of US military oil usage, with fuel purchased and used outside the US seemingly not appearing on ANY inventory, maybe this could account for some "off book" numbers that are distorting the picture, possibly??
Maybe Tess has access to some reliable numbers
On the bus to the oilshow I recalled a few extra points from Tuesday's conference which were not in my hand written notes - I've edited initial post to include these.
I joined this forum some months back but, for some reason, my account had gone when I tried to login a few days ago, hence new account.
Last edited by zceb90 on 13 Sep 2005, 15:57, edited 1 time in total.
Chris
Re: Conference Notes - Delaying the Peak?
I've not checked on other industries but there have definitely been a number of articles in the business press reporting that demographics is an increasing problem. In the oil industry BP is far from alone - there is a big 'skills gap' in many companies and countries. One of the key reasons for this problem, I believe, is the 1-1/2 decades of low product prices hence all the years of downsizing and mega mergers. As with many 'severance programs' one tends to loose who you really want to keep - those with the real 'go' rush to 'take the money and run' (and many don't want to return or are now too old to do so).clv101 wrote:Wow, I wonder how that compared to other industries.zceb90 wrote:BP N Sea staff stats ? 41% offshore staff > 45 yrs old
- BP staff overall N Sea ? 36% > 45, 49% 30 ? 45, 15% < 30.
- Big problem with ageing workforce.
Again a lot of the rig famine goes back to low oil prices between 1985 and 2000 when drilling contractors were struggling even if they had good rigs; those with what our drilling manager used to call 'a pile of junk' (and worse!) would scrap most of them. Another factor of course is the steady change of drilling profile following the discovery peak back in 1964. A lot of the 'easy' areas were drilled up i.e. US lower 48 where cheap land rigs drilling vertical holes had previously been utilised. These rigs were of no use for offshore, high deviation / horizontal, HPHBHT wells etc. Even the generation of (jack-up) rigs for relatively shallow waters such as Southern Nth Sea were no use for deepwater where semis were required. Put another way the maturing nature of many oilfields meant a large number of these rigs were headed for scrap anyway, regardless of the oil price.clv101 wrote:Are rigs more efficient these days? How is all this new production/drilling that everyone is expected going to happen?zceb90 wrote:Luis Vierma ? PDVSA
- Rig shortage ? 2k rigs now v 6k rigs in 1980?s.
What is now a serious shortage of quality rigs able to handle demands of 21st century drilling requirements (and the personnel to man them) has already been identified by Chris Skrebowski and Matt Simmons (among others) as a 'substantial barrier to growing production / mitigating decline'. Modern rigs are complex and both expensive and time consuming to build. From what Matt says Saudi, for example, will need a lot more rigs to maintain production now that vertical wells are obsolete in their most mature oilfields. Horizontal wells are obviously a lot deeper (that's depth below RKB or drilled depth, not TVD) and despite new drilling technologies take longer to drill hence fewer wells per rig per year. The situation has been reflected in rig rates worldwide - in N Sea, for example, rates have doubled in the past 12 months (and that adds several million dollars to cost of each well).
We heard at Tues' conf. that world will be 'out of refinery capacity as early as 2008'. Smaller, older refineries have been steadily closed over past 2 decades. Downsizing due to 1-1/2 decades of low prices apart the capacity problem is due to a large extent imo by the increasing onset of heavy sour crude - percentage of same will steadily increase on the downslope.clv101 wrote:Why would they given that crude supplies are pretty much topped out?zceb90 wrote:- No new refineries built in past 25 years.
Last edited by zceb90 on 13 Sep 2005, 16:01, edited 1 time in total.
Chris
Re: Conference Notes - Delaying the Peak?
Surely if all the additional supply promised were able to be produced, oil companies would be investing in new employees and salaries would reflect the urgency. With futures prices above $50 out to 2010, any fears of a price collapse could be hedged?zceb90 wrote:BP N Sea staff stats ? 41% offshore staff > 45 yrs old
- BP staff overall N Sea ? 36% > 45, 49% 30 ? 45, 15% < 30.
- Big problem with ageing workforce.
Thanks for the notes zceb90.
"If the complexity of our economies is impossible to sustain [with likely future oil supply], our best hope is to start to dismantle them before they collapse." George Monbiot
Re: Conference Notes - Delaying the Peak?
Salaries only partly address the problem and, as was also mentioned at this week's conference, oil co's are trying to avoid a situation where they 'poach each other's people'. High turnover caused by staff 'leapfrogging' leads to increased costs all round and lack of continuity.DamianB wrote:Surely if all the additional supply promised were able to be produced, oil companies would be investing in new employees and salaries would reflect the urgency. With futures prices above $50 out to 2010, any fears of a price collapse could be hedged?zceb90 wrote:BP N Sea staff stats ? 41% offshore staff > 45 yrs old
- BP staff overall N Sea ? 36% > 45, 49% 30 ? 45, 15% < 30.
- Big problem with ageing workforce.
Thanks for the notes zceb90.
The real problem is not Shell hiring at the expense of BP, for example it's a serious lack of high calibre oilfield personnel especially in the lower age groups. The industry will have to take on, and train, more graduates - engineers and geoscientists but this takes time. The industry really needs these people right now....and there just aren't enough of them out there.
This situation was reflected at this week's oil show - a number of stands were devoted to careers and recruitment, a situation which has not really been seen at previous such events in Aberdeen since the early 1980's.
Chris
I can confirm I distinctly recall the ref to 12m bopd in 2010 (and I had same point captured in my hand written notes made at the time). On thinking about it, 12m bopd by 2010 is not that different from some of the recent reports coming out of SA, for example the news item here: http://www.energybulletin.net/7156.htmlandyh wrote:Can I just check this again - the SA rep said that by 2010 all they would be managing was 12m barrel a day?
Thats a hell of a step down from what they have been claiming they could deliver and not really enough to balance the demand equation is it?
Some of the earlier reported claims by SA 'that they could raise output to 15m or even 20m bopd and hold same rates for 50 years' appear to have been moderated somewhat and, to be fair, most of those earlier claims suggested it would be 2015 or 2020 rather than 2010 before the big production hikes could be delivered. The have also been a number of reports recently from SA 'insiders' or retirees that it's now taking 800k bopd of production increases each year just to offset declines in SA's ageing super giant oilfields. The 12m bopd forecast for 2010 looks like a step back towards reality but even if such a rate were possible I suspect much more of it would be heavy sour crude than the industry would like.
Somehow I've still got the feeling that Matt Simmons is going to be proved right all along.
Chris