John, Sure. The GOM actually has increased total oil production due to deepwater discoveries, as has the North Sea, cumulatively all sectors considered, but mainly in the Norwegian Sector.
Prudhoe Bay and Area production has peaked and declined somewhat from its glory days of the 80's. But still ARCO and BP have done an excellent job of discovering small 100mm bbl oil satellite fields and feeding them into the TAPS Pipeline. So North Slope production has held steady at about 1.1 mm bbls/day.
Now the North Sea and GOM will reduce production due to market forces primarily. Howso? Quite simple. Borrowing a phrase from a Woody Allen Movie about personal relationships: "Oil production is like a shark- it has to keep moving forward or it will drown".
That is, you need to keep up well reworking, frac jobs, and most importantly of all, drilling new wells in the the producing fields, in order to maintain current production levels (Big problems with Iraqi and Iranian Fields). Very few oil fields will flow oil at a large sustainable pace by themselves over any length of time without some downhole assistance.
So you see, low prices which cause companies to defer drilling new wells, is a self-correcting mechanism over time. Fieldwide production will drop as well drilling and well servicing activites are delayed in order to save money. it will not happen overnight, but over time.
Other countries like West Africa Nigeria have output contracts with companies- i.e., you are paid for how many barrels of oil youproduce. So those companies will probably not slow production at all (But then Nigeria politically "hangs by a string"If the new (same old) Military Government does not actively move toward free, open, and fair elections by October 1st, watch unrest pick up significantly).
Otherwise in Angola and Equatorial Guinea,and offshore Congo, West African production while not huge is growing. And Latin America is seeing increased exploration effort by a number of countries.
I personally think that production restraints are somewhat futile- the key to rising crude prices is the restoration of strong growth across Asia- which is coming. That economic growth will stimulate oil usage, since oil is the "lifeblood of capitalism".... And honestly we are in a worldwide "boom" of experimentation with free market economies...
Sincerely,
Doug F. |
