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Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: BigBull who wrote (56124)	12/6/1999 12:11:00 AM
From: Tomas	Read Replies (1) \| Respond to of 95453

Reservoir depletion - From WorldOil: What's ahead in 2000 WorldOil, December Feature Article Reservoir depletion. This is the current "buzz topic" throughout the literature. Depletion reflects the rate at which the reserve of a well, field or country can be produced. It is a profile of the production curve and is sometimes broken into "gross depletion," when nothing is done to the producing entity to abate the decline in producing capacity, and "net depletion," that observed taking into account new drilling or development activities implemented to maintain production. The difference between the "gross" and the "net" is obviously impacted by the economics of the moment ? which is essentially the price of petroleum. What is becoming clearer, as more depletion data are collected, is that depletion in most of the important producing basins is steadily increasing. Gross depletion rates on the order of 15% are becoming commonplace which, if not countered with massive investments in exploration and development, can become the "net-depletion" rates for forecasting producing capacity. While there are hundreds of published forecasts on oil supply / demand, some extending all the way to the year 2020, the industry has no published estimates as to the average decline rate, or depletion, of the existing supply base. All hydrocarbon reservoirs ultimately begin a production decline. Yet, no one publicly publishes reliable, field-by-field decline estimates, or even makes a guess at the current blended rate for the worldwide production base of oil and gas. The issue was not particularly serious for years, when a high percentage of the world?s oil and gas production was coming from giant fields years away from any decline when the world had tens of millions of bbl per day shut-in capacity. Decline rates were only relevant to the owners of a particular field. Today, the world of oil and gas is quite different. The amount of shut-in capacity is, at best, only 3?4 MMbpd, less than 5% of present demand. An ever-increasing percentage of the world production base now experiences high decline rates, particularly if a massive amount of added development and workover activity is not done to slow these declines. Moreover, a large number of the giant, older fields ? which anchor the world?s hydrocarbon production base ? have now started to decline. As a result, it is becoming impossible to accurately predict the supply side of any oil or gas forecast without dealing with the issue of depletion. The rapid use of all the new forms of oil field technology tends to delay the decline rate of many fields until peak production has been achieved, but the decline rate is rapid thereafter, as all available technology has already been implemented. The case for studying this issue is that it is estimated that the major large resources for the world?s supply are beginning to show severe decline. Oil still remains the world?s largest and most important commodity. An unrealistically low oil price can be just as destabilizing to the entire world?s economic health as an unrealistically high price. Read the full article here: worldoil.com