From: Walter Hicks (wallyshoes@mindspring.com)
Date: Tue Aug 27 2002 - 07:44:25 EDT
I failed to include ASA on my email and Glenn's analysis dead ended with
me. I thought that others on asa might be interested.
Please note the heel clicking exercise at the end. If we all do this, I
understand that oil crisis will go away ;)
Walt
-------- Original Message --------
Subject: RE: What am I missing?
Date: Mon, 26 Aug 2002 20:43:14 -0700
From: "Glenn Morton" <glenn.morton@btinternet.com>
To: "Walter Hicks" <wallyshoes@mindspring.com>
Hi Walter,You wrote on Monday, August 26, 2002 9:29 AM:
>Not to be pigheaded, Glenn, but the numbers do not look like a disaster
to me. In 2001, for example, the world consumed about>27.5*10^9 barrels
of oil. Despite this, the reserves went up by 3.8*10^9 barrelslls thus
indicatding that more new oil was discovered>than was used. The year
2000 looks similar Are you saying that all this new oil is yucky oil
that is not as good as the "good old" oil of>yesteryear These are good
questions. But there are explanations. We didn't find 31 billion
barrels in 2001 (27 billion produced reserves up 4billion). I know the
BP statistics look that way. The reserves which were brought on line in
2001 were discovered long ago. Some as long as 30 years ago. They were
not reserves until someone decided to spend the money to actually
produce oil. Thus, when discoveries are plotted according to the year
of discovery, we have not found more oil than we produced in over 22
years! Once a field is discovered, you can't 'undiscover' it. We are
living off of past discoveries. At that point it becomes a question of
economics whether the discovered oil will become reserves.And once
again, you must remember that reserves are not as important as rate of
production. What difference does it make if you have 50 gazillion
barrels of oil in the ground if you can only get it out at the rate of 1
barrel per day? Think along those terms and you will have a better
understanding of the problem. And there is a 'yucky' factor to many of
the fields which have waited 30 years to be put on stream. There is
always a reason it takes so long to put things online. In 1988 the UK
was producing about 3 million barrels per day from 200 fields. Today it
is producing about 2.2 million from 900 fields. We will never produce
2.2 million from 2000 fields. The average reserve size per field has
gone down over the years and at some point it costs more energy to
produce a field than it makes. Small fields are economically yucky. But
often there is an oil quality problem. Consider a fields from Qatar. The
terms STOIIP= Stock Tank Oil Initially In Place (we usually only get
from 10-50% of STOIIP as production before we have to abandon the
field), API is the 'gravity' of the oil, 40 is good 8 is tar. It is
loosely correlated to viscosity. B brl = billion barrels, Bcf = billion
cubic feet Sulphur is really bad as it corrodes everything and is very
costly to remove. High sulfur fields are the last thing people want.
Al-Rayyan
discovered 1976 first production 1995
10,000 b/d heavy sour crude 24 API 3.4% sulphur, viscosity >8 cp
STOIIP 1.3 B brl 60 Bcf
1997 production 32,000 b/d
Jan 1999 50,000 b/d average water cut 50%
A. Al-Siddiqi and R. A. Dawe, "Qatar's Oil and Gasfields: A Review"
Journal of Petroleum Geology 22:1999):4:417-436, p. 432-
The best Middle Eastern crude is 41 API and has sulfur less than 1.1%
with a viscosity of .25 centipoise. 8 centipoise is about that of thick
honey. This oil will be hard to produce.
This report on Venezuela notes that they are harvesting the dregs:
"Venezuela (undiscovered reserves: 6.0 billion bbl). Limited in
reserves, Venezuela has hitherto produced some 58% of its estimated
crude oil reserves (Fig. 4)-the only OPEC 6 member over the halfway
mark. State oil company Petroleos de Venezuela SA has already achieved
quite a feat by doubling its capacity to 3 million b/d from 1.5 million
b/d in the 1990s (assisted by its "apertura" [opening] model). Its
present plan to double it again to 6 million b/d by 20096 at a cost of
$25-30 billion seems to be far too ambitious. PDVSA's tackling of the
Orinoco oil belt's extra-heavy oil deposits in the mid-1990s is a
harbinger of things to come; tapping of the dregs isn't a good sign.
Neither will it prove a panacea, for the four major projects being
implemented have a design capacity of only 450,000 b/d of synthetic
crude for a total capital outlay of at least $15 billion." AM Samsam
Bakhtiari, "OPEC'S EVOLVING ROLE: OPEC capacity potential needed to meet
projected demand not likely to materialize " Oil&Gas Journal July 9,
2001
By the way, the Orinoco tar belt was discovered sometime in the 19th
century and is only now being developed. There was a reason for that
delay. But this belt probably has more oil than any other place on
earth--problem is, it is all tar and we will only recover only a tiny,
tiny fraction of it.
Remember Walter, rate of production is what is important, not reserves.
Rate, not reserves. Say that three times then click your heels together.
:-)
glenn
see http://www.glenn.morton.btinternet.co.uk/dmd.htm
for lots of creation/evolution information
anthropology/geology/paleontology/theology\
personal stories of struggle
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