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Posts tagged “oil production”

By Robert Rapier on Jan 14, 2008 with 3 responses

Debunking Matt Simmons

I don’t suppose this essay is going to make me any new friends, but what’s good for Vinod Khosla is also good for Matt Simmons. A couple of years ago, I took on Vinod Khosla because I felt like he was unduly influencing energy policy in the wrong direction. I pointed out a number of incorrect comments from him that I felt called into question his understanding of the issues upon which he was pontificating. I had no personal animosity toward Mr. Khosla, and in fact we have communicated numerous times over the past couple of years. He has even offered to put me to work in the biofuels industry. So, definitely no hard feelings exist between us. He believes… Continue»

By Robert Rapier on Jan 12, 2008 with no responses

A New Peak Looms

The bandwagon of those who insist that world oil production has peaked has really filled up in the past six months. Even big names like Matt Simmons threw caution to the wind and declared that May 2005 was the all-time world peak in oil production. His logic (besides two years of flat production data)? If you look at the numbers and you follow what’s going on starting with Mexico’s giant Cantarell field which is now in a very serious state of decline and then you look at the North Sea and you see just the UK and Norway, it’s pretty obvious to me that those three areas alone could actually decline by between 800,000 and 1 million barrels a day… Continue»

By Robert Rapier on Jan 3, 2008 with no responses

Saudi Aramco Delays Khursaniyah

It never ceases to amaze me just how quickly people can develop amnesia. Take the case with oil production in Saudi Arabia. A year ago, their production was declining. A number of people argued that this was because they were experiencing an irreversible, involuntary, geological decline. My position was always that the evidence looked to me like they were managing their production to keep oil prices high, and that they had spare production. By March of 2007, their production had stopped declining, which was supportive of my theory. After all, if their decline was involuntary, how can we explain that production suddenly flat-lined, and remained steady for the next 10 months? Furthermore, in March I said that I expected Saudi… Continue»

By Robert Rapier on Dec 12, 2007 with no responses

Rank the Top 10 Oil Stories of 2007

While I intend to write a post covering the top energy stories of 2007, Platts is asking for reader input on the top oil industry stories of 2007: The top 10 oil industry stories of 2007 A lot of the listed stories would make both lists. I list my Top 10 below that I submitted to Platts. The first few were easy, but I had a hard time picking between the last three or four. My top 10 oil industry stories of 2007: Oil soars, reaches close to $100 for WTI Spare capacity dwindles, supply/demand balance tightens; Peak Oil theory gets more attention Climate change rapidly moves up the list of the world’s concerns; US Senate votes for mandatory GHG… Continue»

By Robert Rapier on Nov 26, 2007 with no responses

The OPEC Showdown

It has been clear for some time that OPEC members are deeply split over whether $100 oil is good for them in the long-term. Saudi Arabia, having been in this game a long time, probably understands better than most the effect that high oil prices will have. While short-term gains will be great, ultimately economies will falter and demand for their product will be destroyed. Iran and Venezuela, on the other hand, probably couldn’t care less whether the U.S. economy chokes on these prices. The Financial Times covers the impending showdown: Opec rivals in sequel to oil production drama The Opec summit show is over and the performers have left town. But the preparations for Act Two, the meeting of… Continue»

By Robert Rapier on Nov 18, 2007 with no responses

How Would You Manage Saudi’s Reserves?

Too often people try to interpret comments or actions from Saudi Arabia, without attempting to understand the issues from their perspective. I think it is a useful exercise to ask whether their specific actions or comments make sense; 1). From the Saudi perspective, and 2). In the context of the market. For example, when Saudi said that they were having trouble finding buyers for their crude in the spring of 2006, I don’t simply look at the price and dismiss those comments as lies (as many did). I do a bit of digging. And when I uncovered that OECD crude inventories were high and rising at the time, that Iran said essentially the same thing at the same time, that… Continue»

By Robert Rapier on Nov 5, 2007 with no responses

$100 Oil This Week

It hasn’t gotten all that much media coverage yet, but it is looking more and more like Mexico has taken a Katrina-sized hit that has devastated Tabasco. I had to go to The Irish Times for this: Government offers aid to Mexico A week of heavy rains over Mexico caused rivers to overflow, drowning at least 80 per cent of the swampy, oil-rich state of Tabasco. Much of the state capital, Villahermosa, looked like New Orleans after Hurricane Katrina, with murky water reaching to second-storey rooftops and desperate people waiting to be rescued. There has been some mainstream media coverage, but so far the MSM is largely asleep at the wheel. Another story that emphasizes how this disaster has impacted… Continue»

By Robert Rapier on Oct 28, 2007 with no responses

Saudi Production Management

A friend recently pointed me to a 2003 paper that attempts to explain the reasoning behind Saudi Arabia’s behavior with respect to their oil fields. This sort of managed production has always been my counter-argument to those who believe Saudi has peaked and production there is coming down involuntarily. This doesn’t prove that they haven’t peaked, but there is certainly another viable explanation for them reducing production. Here is what I was sent: The fact that they [Saudi] have not raised production despite high oil prices is not surprising, see article in attachment that you may find interesting. Below I quote one of their conclusions: If a negative demand shock affects the crude oil market, the difficulties faced by Saudi… Continue»

By Robert Rapier on Oct 26, 2007 with no responses

Incoherent Reporting from WSJ

I just finished reading an article from the Wall Street Journal that left me shaking my head. I think the article is subscription only, but you can find it for now at: Oil tops $90 on range of worries The story made a number of unusual or misleading claims that were then sometimes contradicted within the story. Here is one example: The events — which included a statement by a top OPEC official to The Wall Street Journal that the world’s oil cartel doesn’t see a need to check the price surge — might not have moved oil markets dramatically by themselves. That’s not remotely what that OPEC official reportedly said. What he said was that the price was being… Continue»

By Robert Rapier on Oct 12, 2007 with no responses

Answering Questions – Part II

OK, I think this finishes off the questions. Thanks to all who asked a question. I think this has been a productive exercise, and I hope you find my answers useful. I may do this again at some point, but for now, I am back to posting and then lurking. The Questions Jeff Sutherland asked: It seems to me that electricity is going to be the key energy source in the future….Biofuels, like ethanol, if produced with electrical equipment seems like a good method to store energy….What do you see as the best option for a transportable form of energy in the future? Answer garsky asked: A couple of posts ago you mentioned some things you were doing to prepare… Continue»