That'll save us; 7 miles of well pipe, 175 miles of pipe to shore, right smack dab in a hurricane generating zone, giving us 400KBPD in 2013, maybe, if everything works. In the meantime, Saudi Arabia has seen their production decline by 500KBPD over the last year, despite snatching up every drilling rig in the world. 
Average Saudi Arabian daily oil + condensate production, by month, from EIA and JODI, together with Baker-Hughes oil rig count. January 2000-April 2006. Inset graph shows annual oil consumption and exports according to BP (including NGL). Click to enlarge. Source: EIA International Petroleum Monthly Table 1.1a, Baker-Hughes, and BP. Last green point is from press reports
Not even the leading producer any more; Russia is. Even if the earth was entirely filled with oil, it would be a finite resource.
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SAUDI ARABIA's output stood at 8.93-million bpd, sharply lower than the 9.432-million bpd it produced in the same month last year, said the report.
Message 22762157
westexas on Tuesday September 05, 2006 at 9:48 AM EST
Re: GOM Discoveries (Plural)
One important point that seems to be escaping the MSM's attention this morning is that the oil companies are talking about the discoveries (plural) along this trend having 3 Gb to 15 Gb in total recoverable reserves.
According to the WSJ article, Devon says that its four discoveries, including "Jack" have recoverable reserves of at least 300 million barrels each.
This is not a Prudhoe Bay discovery, this is a group of discoveries they estimate will produce between 3 Gb and 15 Gb.
To put the higher figure in perspective, the world uses--from nuclear + fossil fuel sources--the energy equivalent of 15 Gb of oil in less than three months.
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That's what my research is telling me. Best source I've got (pdf) is
Emergence of the Lower Tertiary Wilcox Trend in the Deepwater Gulf of Mexico
More than 12 Bbbl of oil in place have been discovered to date. Potential recoverable reserves per discovery range from 30 to 400 MMboe, with a 69% success rate, i.e., 9/13. Trend-potential ranges from 3 to 15 Bbbl of recoverable oil. All discoveries have a common basinal setting, distal Louann salt basin rim, and are salt-cored anticlinal closures with tectonic styles ranging from thrusted symmetrical box-folds of the PFB in Alaminos Canyon (Figure 2A), to salt pillow structures of Walker Ridge (Figure 2B), and possibly continuing to asymmetrical thrusts of the Mississippi Fan Fold Belt in Green Canyon and Atwater Valley protraction areas
Look for Walker ridge + oil.
This is really deep drilling. Technical challenges are huge.
Several inherent technical challenges need to be addressed to ensure economic feasibility of the Lower Tertiary Wilcox trend. These range from the cost-effective drilling of complex salt canopies and evaluating deep structural targets to the completion and production of reservoirs in water depths that have not occurred to date. Understanding the oil chemistry, reservoir quality and associated flow capability will determine the drilling/ completion technology, and ultimately the creation of infrastructure needed to transform the Lower Tertiary Wilcox into a world-class petroleum system in the deepwater GoM. Figure 11. Schematic Wilcox depositional model with key trend wells.
The "news" is that they got a test well to flow at 6/kbd.
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Darwinian on Tuesday September 05, 2006 at 9:49 AM EST
I have been following this story of the new GOM discovery all morning on CNBC and the net. They have been putting out figures ranging from 3 billion barrels to 15 billion barrels. But the nuts and bolts of the discovery can be found here.
Devon's holdings in the region ``could more than double our current reserve base of about two billion equivalent barrels in the coming years,' said Stephen J. Hadden, the Devon senior vice president for exploration and production. And... The partners plan to drill another appraisal well at the site in the Walker Ridge Block in 2007. A decision whether to develop Jack may be made in 2007 or 2008, Statoil's Mellbye said. The field would start production in 2013 if development goes ahead, he said..
Devon holds a 25 percent stake in the field.
On CNBC this morning, they were saying the field could produce as much as 400,000 barrels per day for 20 years. That comes out to 3 billion barrels, not 15. At any rate it should start to come on line, as they say, in 2013. That is causing oil prices to drop today.
[new] Darwinian on Tuesday September 05, 2006 at 9:55 AM EST
One more thing I forgot to mention. The field is in 7,000 feet of water and located 20,000 feet below the sea floor. That is deep. In fact, that is below the traditional oil window. This means the well will probably produce a lot more gas than oil. But they are talking about barrels of oil equalevant.
(I know, that last word is spelled wrong. And my damn spell checker wont give me a hint.
theoildrum.com
A few more comments...
Dave Cohen on Tuesday September 05, 2006 at 11:04 AM EST
These lower Tertiary reservoirs were first identified in the 1930's. Technology prevented drilling any test wells until now. Another well will be drilled in 2007. If things go right and the price stays high -- it will, unless there's a world wide recession -- full-scale production would begin in 2013. Assuming a 5% global decline rate (this is a standard number) and an optimistic daily flow from these GOM reservoirs of 200/kbd in 2013 -- well, you do the math, OK? It's time to make different arrangements for how we live, not engage in cable news-style cheerleading.
As Jeffrey says below, in a Hubbert linearization or production curve (same thing, just an easy transform), this is merely an indiscernible bump (depending on the graph scale) in the long tail end of US production.
I see we need another "Guide for the Perplexed" here.
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westexas on Tuesday September 05, 2006 at 10:49 AM EST
"In other words, are these extra 5 to 30 billion barrels already part of that cumulative 228 billion barrels, or do you add them to the 228 billion?"
The question partly turns on how you define "conventional." A lot of people don't define ultra deep water production as conventional. My personal definition of conventional is that it is oil that will move to a wellbore without having to add heat energy to the system and/or that you don't have to stripmine.
The best way to answer the question is that we are not going to see any region show a perfectly straight line down to where the plot intersects the horizontal axis (where P = zero), because a lot of these regions will virtually never stop producing.
Inevitably, what we will see is a long production "tail" which on a HL plot, will show up as the data plot asymptotically approaching the horizontal axis, without ever quite getting there.
As I pointed out above, what this fundamentally points out is the difference between the fortunes of the energy producers and the energy consumers.
If Matt Simmons is right about oil prices ($200 per barrel in 2010, in constant 2005 dollars), every one million barrel oil field that one finds (or redevelops with more advanced recovery techniques) onshore in the Lower 48 will generate cash flows of up to $150 million or so (depending on the royalty and operating costs). In many areas, a one million barrel field can be found in an area as small as 100 acres. If you string together seven small fields like this, you have a billion dollars in net cash flow.
The point is that neither these "leftover" Lower 48 fields nor these ultra deep offshore discoveries will do anything to change the fundamental reality of Peak Oil. Both may be profitable, but we are just working the "tail" at the end of the production rate versus time plot.
=== Further analysis today.
theoildrum.com |
