Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : PEAK OIL - The New Y2K or The Beginning of the Real End? -- Ignore unavailable to you. Want to Upgrade?

To: Jurgis Bekepuris who wrote (976)	9/27/2005 8:15:34 PM
From: Doug R	Respond to of 1183

Rita causes record damage to oil rigs Hurricane Rita has caused more damage to oil rigs than any other storm in history and will force companies to delay drilling for oil in the US and as far away as the Middle East, initial damage assessments show. ODS-Petrodata, which provides market intelligence to the offshore oil and natural gas industry, said it expected a shortage of rigs in the US Gulf this year. “Based on what we have right now, it appears that drilling contractors and rig owners took a big hit from Rita,” said Tom Marsh of ODS-Petrodata. “The path Katrina took was through the mature areas of the US Gulf where there are mainly oil [production] platforms. Rita came to the west where there is a lot of [exploratory] rig activity.” Ken Sill of Credit Suisse First Boston said: “Early reports indicate numerous rigs are missing, destroyed or have suffered serious damage and several companies have yet to report. Rita may set an all-time record.” The US Coast Guard said nine semisubmersible rigs had broken free from their moorings and were adrift. This damage could not have come at a worse time for oil companies and consumers. US crude futures on Monday fell 37 cents to $65.45 a barrel in midday trading in New York as refineries that were evacuated before the onset of Rita returned to operation. Earlier in the day, Ali Naimi, Saudi Arabia's oil minister, said the market had not taken up the 2m barrels a day of spare capacity the Organisation of the Petroleum Exporting Countries offered last week. Speaking in Johannesburg, he blamed high oil prices on a lack of industry infrastructure, including rigs and refineries, rather than oil reserves. Rigs, which are movable and are used for exploration and development, were in short supply before hurricanes Katrina and Rita blew through the US Gulf in late August and September. High oil prices and the desperate search for new oil supplies needed to meet rampant demand from the US and China have made rigs difficult to find and expensive to hire. Rigs cost $90m-$550m to construct, depending on how sophisticated the structure and how deep the water in which it will drill. A rig ordered today is unlikely to be ready before 2008 or 2009, analysts said. As a sign of just how precious rigs are becoming to the market, Anadarko, the biggest US independent oil company, this week set a record by committing to a rig six years in advance; commitments in the past were made months ahead of time rather than years. Initial reports from companies are ominous. Global Santa Fe reported it could not find two of its rigs. Rowan Companies reported four rigs damaged, with two having moved, one losing its “legs” and the fourth presumed sunk. Noble has four rigs adrift, with two run aground one into a ChevronTexaco platform. news.ft.com Many rigs will no longer be economically viable to replace. There's no "there" there. Meanwhile, the rest of the world is trying to pump flat out. By the time the GOM is even up to 80% its former production, decline will have set in many other locations that are now nearing peak.

To: Jurgis Bekepuris who wrote (976)	9/27/2005 9:14:32 PM
From: Doug R	Respond to of 1183

markfiore.com

To: Jurgis Bekepuris who wrote (976)	9/28/2005 5:02:29 PM
From: kryptonic6	Read Replies (1) \| Respond to of 1183

Shutting down of oil refining is NOT Peak Oil. It is actually the opposite, it will prolong time to the Peak Oil since no oil is being produced / refined in meantime. The oil that is not being produced / refined will not dissapear from the oilfields or tankers because of the closures. This is assuming that all of the lost capacity will be rebuilt. It remains to be seen how much of the lost capacity can/will be brought back online, particularly the offshore rigs. See "Rita damages Chevron platform, several rigs missing", today.reuters.co.uk I agree that Ruppert's alarmist comments are not winning over the general public, but reality is reality regardless of what the general public thinks. By the end of this Winter we will know whether or not Ruppert's projections were alarmist. Having this capacity knocked out is only further straining the balance between global supply and demand, making immediate shortages worse as the U.S. scrambles to obtain more supply. I don't see how bringing Gulf capacity back online at a later time will change the global supply situation - just look how strained it was in the months BEFORE Katrina. Jesse