World "Awash" in oil. Sec Perry says Goldman Sachs wrong.

[Rob Plant + 2,608]

Jabbar may be right according to the IEA

https://oilprice.com/Energy/Energy-General/IEA-An-Oil-Glut-Is-Looming.html

Edited October 29, 2019 by Rob Plant

[Jabbar + 465]

4 minutes ago, J.R. Ewing said:

You seem to have difficulty understanding that the weekly EIA data is not data.  It is based on surveys, opinions, guesses, etc. and made up by bureaucrats.

A 800,000 barrel difference between the current EIA estimates and the last actual data reported is not minutia.

Thanks in advance for trying to be more accurate with your future posts.

Too much oil. 

 

Only a matter of months before the world realizes "The Emperor Has No Clothes" and OPEC days are over.

 

[Jabbar + 465]

2 hours ago, J.R. Ewing said:

You seem to have difficulty understanding that the weekly EIA data is not data.  It is based on surveys, opinions, guesses, etc. and made up by bureaucrats.

A 800,000 barrel difference between the current EIA estimates and the last actual data reported is not minutia.

Thanks in advance for trying to be more accurate with your future posts.

Don't mistake rounding numbers for inaccurate stats.

U.S. Net Exporter

Too much oil.

Edited October 29, 2019 by Jabbar

[D Coyne + 305]

Jabbar,

The EIA's weekly data is garbage, only the monthly data is worth paying attention to.

July 2019 data imports crude and products 9551 kb/d, exports crude+products 8085 kb/d, net imports=9551-8085=1466 kb/d.

The US is not a net exporter of crude and petroleum products.

[Jabbar + 465]

21 minutes ago, D Coyne said:

Jabbar,

The EIA's weekly data is garbage, only the monthly data is worth paying attention to.

July 2019 data imports crude and products 9551 kb/d, exports crude+products 8085 kb/d, net imports=9551-8085=1466 kb/d.

The US is not a net exporter of crude and petroleum products.

yea, yea, yea

Too much oil. 

Long Live U.S. Shale.

Looking forward to the growth of Argentina Shale.

Too much oil.

World is AWASH with Shale haters. 

" It ruined my industry"

 

[D Coyne + 305]

Vaca Muerta will be mostly natural gas, won't amount to much oil.  US tight oil may peak in 2025 at about 10 Mb/d.

[Jabbar + 465]

18 minutes ago, D Coyne said:

Vaca Muerta will be mostly natural gas, won't amount to much oil.  US tight oil may peak in 2025 at about 10 Mb/d.

D.C. 

U.S. Shale Oil as of June 2019 was 8.52 million barrels.  So you believe over next 5 1/2 years U.S. shale only increases 1.48 million barrels. Respectively disagree.

Your chart was developed before CONOCO announced they have doubled yield to 20% in EAGLE FORD wells.

I believe that will become the norm in U.S. shale..  If I'm correct U.S. Shale will thrive for decades. (as Chevron CEO stated)

Agreed, Vaca Muerta has huge gas reserves. However, the Oil reserves are also impressive.  Time will tell.

Edited October 29, 2019 by Jabbar

[D Coyne + 305]

13 minutes ago, Jabbar said:

D.C. 

U.S. Shale Oil as of June 2019 was 8.52 million barrels.  So you believe over next 5 1/2 years U.S. shale only increases 1.48 million barrels. Respectively disagree.

Your chart was developed before CONOCO announced they have doubled yield to 20% in EAGLE FORD wells.

I believe that will become the norm in U.S. shale..  If I'm correct U.S. Shale will thrive for decades. (as Chevron CEO stated)

Agreed, Vaca Muerta has huge gas reserves. However, the Oil reserves are also impressive.  Time will tell.

Jabbar,

I use "EIA tight oil production estimates by play" from page below

https://www.eia.gov/petroleum/data.php#crude

In Sept 2019 US tight oil output was 7909 kb/d, based on latest data.  My US LTO model is based on well output data from shaleprofile.com to develop well profiles based on latest data and reasonable future completion rates, USGS mean TRR estimates and reasonable economic assumptions using a discounted cash flow analysis are the basis of the LTO model.

I am unimpressed with hype in investor presentations and look at actual output data as the basis for my models.

Believe what you wish, this is the most likely outcome with the assumption of Brent oil prices in constant 2017$ rising to $90/b in 2027 and remaining at that level until 2050 before declining.  When this tight oil scenario is combined with an Oil Shock model with a URR of 3100 Gb we get the following for World C+C output.

[Jabbar + 465]

5 hours ago, D Coyne said:

Jabbar,

I use "EIA tight oil production estimates by play" from page below

https://www.eia.gov/petroleum/data.php#crude

In Sept 2019 US tight oil output was 7909 kb/d, based on latest data.  My US LTO model is based on well output data from shaleprofile.com to develop well profiles based on latest data and reasonable future completion rates, USGS mean TRR estimates and reasonable economic assumptions using a discounted cash flow analysis are the basis of the LTO model.

I am unimpressed with hype in investor presentations and look at actual output data as the basis for my models.

Believe what you wish, this is the most likely outcome with the assumption of Brent oil prices in constant 2017$ rising to $90/b in 2027 and remaining at that level until 2050 before declining.  When this tight oil scenario is combined with an Oil Shock model with a URR of 3100 Gb we get the following for World C+C output.

Dennis

I see the "World Oil Shock Model" chart was authored by none other than "Dennis Coyne".  Am I wrong to assume that is you ?

Defend your research to the death. I would do the same. Do you have any independent data ? 

Who do you work for ? EIA ? peakoilbarrel.com  ?

Hard to let go.  I've been there. Only it was over a women not my resesrch.

Peak Oil Supply theory died years ago. Let it go. 

https://peakoilbarrel.com/category/shock-model/

Edited October 30, 2019 by Jabbar

[Jabbar + 465]

D.T. 

Are you only one with sense of humor on these forums ?

[D Coyne + 305]

8 minutes ago, Jabbar said:

Dennis

I see the "World Oil Shock Model" chart was authored by none other than "Dennis Coyne".  Am I wrong to assume that is you ?

Defend your research to the death. I would do the same. Do you have any independent data ? 

Who do you work for ? EIA ? 

For description of model see  https://www.amazon.com/Mathematical-Geoenergy-Discovery-Depletion-Geophysical/dp/1119434297

 

Or perhaps a University library

 

http://ursus.maine.edu/search/?searchtype=X&SORT=D&searcharg=mathematical+geoenergy&searchscope=1

A search on oil shock model may find some blog posts.

 

[Guest]

5 minutes ago, Jabbar said:

D.T. 

Are you only one with sense of humor on these forums ?

Yes, but I say ''humour'' with 2 U's   

 

Edited October 29, 2019 by Guest

[Jabbar + 465]

5 hours ago, D Coyne said:

For description of model see  https://www.amazon.com/Mathematical-Geoenergy-Discovery-Depletion-Geophysical/dp/1119434297

 

Or perhaps a University library

 

http://ursus.maine.edu/search/?searchtype=X&SORT=D&searcharg=mathematical+geoenergy&searchscope=1

A search on oil shock model may find some blog posts.

 

Obviously know your mathematics.

You can have the most sophisticated mathematical models and algorithms. 

But the results after all are dependent on the inputs. Garbage in = Garbage out.

The greatest minds in the world once thought the world was flat. 

Not to long ago (less than 10 years ago) the "experts" said all the recoverable oil reserves in the world have already been discovered.

As a result the Peak Oil Suppliers theory ruled.  Popular website "Oil Drum" said it would soon cost more energy to produce a barrel of oil then a barrel returned. Governments (including your U.S. government) based policy on it, fought wars over it, paid as much as 140 dollars a barrel over it, spent trillions of dollars and lost thousands of lives based on this faulty analysis.

Some still believe the world is flat.(ie Kyrie Irving,Brooklyn Nets basketball player)

Some still believe in Peak Oil Supply is upon us.

 

 

Edited October 30, 2019 by Jabbar

[Douglas Buckland + 6,308]

9 hours ago, Jabbar said:

Vaca  Muerta potential is BIGGER than Permian. 

However, the recent elections with new socialist government could kill the goose that was about to lay the golden egg.

The Oil Majors were just starting to ramp production when the election changed everything.

Majors waiting to see new government Vaca policy.

The ‘potential’ may be bigger, but you will have the same problems associated with any LTO play; drastic decline curves, sibling well issues, expensive multistage fracs, flaring and so forth.

I am betting it was much more attractive when it was initially proposed.

[Jabbar + 465]

On 10/29/2019 at 10:40 PM, Douglas Buckland said:

The ‘potential’ may be bigger, but you will have the same problems associated with any LTO play; drastic decline curves, sibling well issues, expensive multistage fracs, flaring and so forth.

I am betting it was much more attractive when it was initially proposed.

Oh My

Doug

Do you really want to get into the decline curves again. Let's just respectively agree to disagree.

Information I have seen shows after over three years of slow investment in in Vaca Muerta there has been a recent ramp in investment.  Then recent Argentine election knocked the wind out of their sails. 

You had questioned the willingness of investors to comit to Vaca given recent developments in Permian.

Big difference in Vaca Muerta.  It's 95% Major international Oil Companies. They now understand the geology and potential.  Now only concern is the newly elected government.  

Waiting to hear their policy toward foreign oil investment.

Also big potential offshore Argentina. Couple of Majors just commissioned 3D mapping of the promising basin.

Edited November 1, 2019 by Jabbar

[Douglas Buckland + 6,308]

1 hour ago, Jabbar said:

Oh My

Doug

Do you really want to get into the decline curves again. Let's just respectively agree to disagree.

Information I have seen shows after over three years of slow investment in in Vaca Muerta there has been a recent ramp in investment.  Then recent Argentine election knocked the wind out of their sails. 

You had questioned the willingness of investors to comit to Vaca given recent developments in Permian.

Big difference in Vaca Muerta.  It's 95% Major international Oil Companies. They now understand the geology and potential.  Now only concern is the newly elected government.  

Waiting to hear their policy toward foreign oil investment.

The drastic decline curves are a ‘fact of life’ whenever you are discussing production from a tight rock. Are saying that these curves are a fantasy of my imagination and do not actually occur in the real world?

Are you saying that geologist, geophysicists and drilling operation people working for ‘major international oil companies’ are smarter, wiser, more professionally astute than those working for the smaller companies? I’d like to see your support for this assumption.

Oh my.....

[Marcin + 519]

14 hours ago, Jabbar said:

Keep it simple

Look at last week's EIA data.

8 million crude and product imports/day

9 million crude and product exports/day

 

You are actually right, for 3 weeks in October US is net energy exporter.

(If I would really try to make my case I would say that imported Canadian crude has higher calorific value than exported light fractions, so per Peta Joule it is more like balanced, but by volume you are right)

EIA weekly is not that off of monthly reports lately. For July 2019 monthly net imports as cited by @D Coyne were -1466 k bbl/d, and per weekly EIA reports it was 1.6 m bbl/d in July, so very close.

[Jabbar + 465]

6 hours ago, Douglas Buckland said:

Are you saying that geologist, geophysicists and drilling operation people working for ‘major international oil companies’ are smarter, wiser, more professionally astute than those working for the smaller companies? I’d like to see your support for this assumption.

Oh my.....

You stated previously you are a "Consultant" in the oil industry.

SO WHAT YOU ARE REALLY ASKING ARE GEOLOGISTS, GEOPHYSICIST AND DRILLING OPERATION PEOPLE WORKING FOR THE OIL MAJORS SMARTER THAN YOU ?

Of course not ! You are way smarter than the geologists, engineers, field crews, financial managers that use the latest technology and leading edge processes. You are much much smarter than Chevron CEO David Wirth or Conoco CEO Ryan Lance.

Chevron CEO David Wirth must be lying when he says shale has the best return on capital in their entire portfolio. Conoco CEO Ryan Lance must be lying when he says he has EUR yields up from 10% to 20% in the Eagleford. 

Your drilling expertise from your work drilling conventional wells in Oman in 1992 is so much better than today's new shale technology resources.

Congrats on your Consulting business.

How's business ? How many clients do you have ?

wah, wah, wah 😥 shale has ruined the oil industry.

Doug you are so brilliant you can take over this discussion also.  It's all yours see ya.

LOL

Talk about beating a dead horse

Edited October 30, 2019 by Jabbar

[Douglas Buckland + 6,308]

Well Jabbar, that was entertaining. Somehow you twisted my comments regarding professionals, not consultants, working for the small to mid cap outfits into a rant about consultants. From your comments, you do not have any idea how consultancy works in the oilfield.

I do not have ANY clients. I am a consultant and therefore companies or agencies contract ME when they require my services - I do not have specific clients.

Now back to the original premise. You, in your infinite wisdom, seem to think that ANY professional working for a small to medium sized company are, for some unexplained reason, less capable, less competent, and less professional than those working for large multinational firms.

Without going on a rant, I would again ask you to defend that assumption.

[Douglas Buckland + 6,308]

Just as an aside, I was working in Mexico, not Oman, in 1992. I didn’t get to Oman, consulting for PDO until 2000. 

[Jan van Eck + 7,558]

14 hours ago, Jabbar said:

D.T. 

Are you only one with sense of humor on these forums ?

Nah.  D.T.'s is just "more robust" than mine!  

[Jan van Eck + 7,558]

1 hour ago, Jabbar said:

wah, wah, wah 😥

Jabbar, knock it off.  Your post teeters on the edge of being "jackhole."  This is intended as an articulate, intelligent discussion forum, and what you are doing is not appropriate. Consider yourself rebuked.

[Jan van Eck + 7,558]

4 hours ago, Marcin said:

(If I would really try to make my case I would say that imported Canadian crude has higher calorific value than exported light fractions, so per Peta Joule it is more like balanced, but by volume you are right)

And this is an interesting wrinkle.  Marcin correctly references the complicated relationship that the USA has with Canada. In oil, as in lumber, lobsters, paper, even automobiles, the USA-Canada import/export trade is intertwined and complicated.  For bizarre political reasons that nobody can possibly grasp, Canada has not built, and will not build, a pipeline to run Canadian crude from Alberta and Saskatchewan to refineries in the East.  So the product flow has WCS going South into the USA, a good portion traveling to refineries in the Northern US Great Lakes area, there refined, and the refined product is then piped or railed up to the big Toronto and Montreal markets. And yes, some Canadian crude trans-ships across Minnesota and Michigan to the refineries in Sarnia, Ontario, for processing there. 

Yet that Canadian heavy crude is ironically well suited for the refineries down in Texas and Louisiana, to be first blended with the LTO from the Texas shale fields, basically as a direct substitute for the stuff that was previously sourced, in large quantities, from Venezuela. So, yet once again, the politics of oil gets in the way of its rational distribution and use.  And you also have crude from the Bakken heading by rail to the port of Albany, NY, there to be loaded onto tankers in the 60,000-ton class, for routing to the Irving refinery in New Brunswick, basically in competition with crude otherwise sold there from Saudi Arabia. 

None of the trans-border intertwining really makes any sense, yet persists because of the political barriers to the rationalized flows of crudes to market. IS the USA a "net exporter"?  The definition is a bit artificial, as it places this 1700's sword across the map, making a "border" where none exists, except in politics. 

[Tomasz + 1,608]

 

At the turn of 2019 and 2020, the latest projects in Norway and Brazil are launched, which started before the fall in oil prices in 2014. In the next five years, investments in the oil and gas sector have fallen by about half.

If someone thinks that shale slowly depleting the best deposits will satisfy the all growing demand for oil in the next decade with oil prices below 60-70 dollars for WTI, in my opinion is wrong and oil prices as predicted by the EIA will grow.

There is a need to start global investments in oil and gas again so both oil and gas rice must be high enough to do that. As you can check even in 2018 global investments in oil and gas industry was not high enough so I think you need a longer period of price about 75 $ to start it again.

 

Edited October 30, 2019 by Tomasz

[D Coyne + 305]

14 hours ago, Jabbar said:

Obviously know your mathematics.

You can have the most sophisticated mathematical models and algorithms. 

But the results after all are dependent on the inputs. Garbage in = Garbage out.

The greatest minds in the world once thought the world was flat. 

Not to long ago (less than 10 years ago) the "experts" said all the recoverable oil reserves in the world have already been discovered.

As a result the Peak Oil Suppliers theory ruled.  Popular website "Oil Drum" said it would soon cost more energy to produce a barrel of oil then a barrel returned. Governments (including your U.S. government) based policy on it, fought wars over it, paid as much as 140 dollars a barrel over it, spent trillions of dollars and lost thousands of lives based on this faulty analysis.

Some still believe the world is flat.(ie Kyrie Irving,Brooklyn Nets basketball player)

Some still believe in Peak Oil Supply is upon us.

 

 

Jabbar,

Eventually oil output will peak, my guess is 2025 if World URR is about 3120 Gb.  A higher URR assumption results in a later peak. For example, the scenario below increases the assumed URR to 3650 Gb due to an increase in conventional discoveries of 300 Gb (from 2800 Gb in first scenario to 3100 Gb in the scenario presented below) and I assume that more extra heavy resources (Canadian oil sands and Orinoco belt resources) are extracted in the second scenario (480 Gb) compared to the first (220 Gb.)  Peak World C+C output is in 2031 at 91.8 Mb/d.  Despite what some believe, the crude plus condensate recoverable resource is not unlimited, the extra heavy oil and tight oil resource is expensive to produce and it will take considerable time and effort to ramp up the extra heavy oil rate of output.  I define extra heavy oil as crude output with an API Gravity of less than 10 degrees.

The question is, which scenario is more realistic? I think the lower URR scenario is more likely.  Consider reserves reported by BP Statistical review of World Energy the World total is 1727 Gb at the end of 2017 including 424 Gb of extra heavy oil and 20 Gb of US tight oil reserves.  We define unconventional resources as the sum of tight and extra heavy oil, which at the end of 2017 was 444 Gb, conventional is all other C+C or 1283 Gb.  Cumulative conventional output through the end of 2017 was about 1314 Gb, so this would give a URR of about 2600 Gb for conventional C+C.  We have left out the issue of OPEC reserves which may be 2P or even 3P reserves rather than proved reserves and in addition BP reports NGL reserves with C+C.

We do not have an accurate assessment of OPEC reserves as they are considered a state secret for each of the members, there are no independent third party audits.  For non-OPEC conventional reserves (excludes US tight oil reserves and Canadian oil sands reserves) the total has been decreasing from 311 Gb at the end of 2014 to 304 Gb at the end of 2017.

Some consider my 2800 Gb estimate for World conventional C+C URR as too optimistic (corresponds with my 3100 Gb World C+C shock model presented earlier), it remains my best guess, actual URR has roughly a 50/50 chance of being higher or lower than the 3100 Gb estimate, which it is, we do not know.

As to garbage in garbage out, that is correct, where you are incorrect is that I use very good data and base my models on that rather than the well profiles posted in investor presentations which have little basis in reality.  For example my model for the Permian basin uses well profiles developed by fitting a hyperbolic to actual data with 15% exponential terminal annual decline rate after 9 years. The r squared for model vs data from 2010 to August 2019 is about 0.999. So good data in, good model out is more descriptive in that case.

Edited October 30, 2019 by D Coyne