Of all of the myths under the sun the moon and the stars the most real of commodities most storied and steeped in Mythology is Oil.
Oil is a fossil fuel, oil is a vital and limited resource, and oil is the bringer of prosperity Oil is the bringer of wars.
Like money, I venture that oil is something we literally take for granted, that we view as taken as read.
In an age seemingly so long ago, the first half of the 20th and second half of the 19th century it was coal that provided automotive power and Heat and
Gas that provided light. Before that, it was draught animals and wood and peat.
Confronted with questions about where Oil comes from geographically, where is it drilled, where is it processed ( refined), and who is in charge or has the
power at each stage of the life cycle of a Barrel of oil.
OPEC annual Statistical Bulletin Updated March 2 2023. V 1.5.3
Unravelling Catastrophe. Seeds of Hope or Seeds of destruction.
~~
Peak Oil beliefs persist they are not quite as loudly proclaimed these days and the arguments put by other Believers in the creed of “DeGrowth make arguments related to the energy cost of Energy invested.
#250: The Surplus Energy Economy, part 5
Posted on March 1, 2023
WHAT HAPPENS NEXT?
Introduction
Right from the outset, it was likely that the multi-article synopsis of The Surplus Energy Economy would extend to a fifth installment on the subject of ‘what happens next?’
What most of us probably want to know is whether the economy is destined for gradual decline or sudden collapse. The indications on this issue are contradictory. On the one hand, the economy itself is subject to trends which, whilst adverse, are essentially gradual. On the other, the financial system has been managed (meaning mis-managed) in ways which seem to eliminate any possibility of managed decline.
My own belief is that under-investment in Exploration and dis-investment in ongoing viable production serve to artificially limit the supply of oil. There is always a medium-term maximum production level
and the control of this production was well documented by Hotelling and subsequent writers such as Adelman and Blair.As I actually don’t like blogging and as this blog is really just a notebook for my own background information I am now just going to add a bunch of links, none of which have persudaed me that Peak oil is upon us .
Indeed my conclusion remains that “something is rotten in the state of Denmark”.
~~
~
~
Giant oil and gas fields
The world’s 932 giant oil and gas fields are considered those with 500 million barrels (79,000,000 m3) of ultimately recoverable oil or gas equivalent.[1] Geoscientists believe these giants account for 40 percent of the world’s petroleum reserves. They are clustered in 27 regions of the world, with the largest clusters in the Persian Gulf and Western Siberian basin.[2] The past three decades reflect declines in discoveries of giant fields.[3] The years 2000–11 reflect an upturn in discoveries and appears on track to be the third best decade for discovery of giant oil and gas fields in the 150-year history of modern oil and gas exploration.[4]
Recent work in tracking giant oil and gas fields follows the earlier efforts of the late exploration geologist Michel T. Halbouty, who tracked trends in giant discoveries from the 1960s to 2004.
Petroleum reservoir
A structure map, looking downward, generated by contour map software for an 8,500-ft-deep gas and oil reservoir in the Erath field, Erath, Louisiana. The left-to-right gap near the top indicates a fault line between the blue and green contour lines and the purple, red, and yellow lines. The thin red circular line in the middle indicates the top of the oil reservoir. Because gas rises above oil, this latter line marks the gas-and-oil contact zone.
A petroleum reservoir or oil and gas reservoir is a subsurface accumulation of hydrocarbons contained in porous or fractured rock formations.
Such reservoirs form when kerogen (ancient plant matter) is created in surrounding rock by the presence of high heat and pressure in the Earth’s crust. Petroleum reservoirs are broadly classified as conventional and unconventional reservoirs. In conventional reservoirs, the naturally occurring hydrocarbons, such as crude oil or natural gas, are trapped by overlying rock formations with lower permeability, while in unconventional reservoirs, the rocks have high porosity and low permeability, which keeps the hydrocarbons trapped in place, therefore not requiring a cap rock. Reservoirs are found using hydrocarbon exploration methods.
Persian Gulf
| Persian Gulf | |
|---|---|
Persian Gulf from space
|
|
| Location | Western Asia |
| Coordinates | 26°N 52°ECoordinates: 26°N 52°E |
| Type | Gulf |
| Primary inflows | Gulf of Oman |
| Basin countries | Iran, Iraq, Kuwait, Saudi Arabia, Qatar, Bahrain, United Arab Emirates and Oman (exclave of Musandam) |
| Max. length | 989 km (615 mi) |
| Surface area | 251,000 km2 (97,000 sq mi) |
| Average depth | 50 m (160 ft) |
| Max. depth | 90 m (300 ft) |
Persian Gulf at Night from ISS, 2020.
The Persian Gulf (Persian: خلیج فارس, romanized: xalij-e fârs, lit. ‘Gulf of Fars‘, pronounced [xæliːdʒe fɒːɾs]), sometimes called the Arabian Gulf (Arabic: اَلْخَلِيْجُ ٱلْعَرَبِيُّ, romanized: Al-Khalīj al-ˁArabī), is a mediterranean sea in Western Asia. The body of water is an extension of the Arabian Sea located between Iran and the Arabian Peninsula.[1] It is connected to the Gulf of Oman in the east by the Strait of Hormuz. The Shatt al-Arab river delta forms the northwest shoreline.
The Persian Gulf has many fishing grounds, extensive reefs (mostly rocky, but also coral), and abundant pearl oysters, however its ecology has been damaged by industrialization and oil spills.
The Persian Gulf is in the Persian Gulf Basin, which is of Cenozoic origin and related to the subduction of the Arabian Plate under the Zagros Mountains.[2] The current flooding of the basin started 15,000 years ago due to rising sea levels of the Holocene glacial retreat.[3]
West Siberian petroleum basin
Western Siberian plain on a satellite map of North Asia.
The West Siberian petroleum basin (also known as the West Siberian hydrocarbon province or Western Siberian oil basin) is the largest hydrocarbon (petroleum and natural gas) basin in the world covering an area of about 2.2 million km², and is also the largest oil and gas producing region in Russia.[1]
Geographically it corresponds to the West Siberian plain. From continental West Siberia, it extends into the Kara Sea as the East-Prinovozemelsky field.
Beneath lie remnants of the Siberian traps, thought to be responsible for the Great Dying 250 million years ago.[2][3]
History[edit]
Southern part of West Siberia cross section
Northern part of West Siberia cross section
Southeastern part of West Siberia cross section
Gas was discovered in 1953 in Upper Jurassic sandstones and limestones, within the Berezov Field. Then in 1960, oil was discovered in the Upper Jurassic 400 km south, in the Trekhozer Field. A Neocomian oil discovery followed in 1961, in the Middle Ob Region, followed by several giant and large fields, including the Samotlor Field. Gas was discovered in Cenomanian sandstones in 1962 within the Taz Field. This was followed by several giant and large dry gas fields in the Aptian-Cenomanian Pokur Formation, including the Medvezhye Field and Urengoy Field, which commenced production in 1972 and 1978 respectively. Lower-Middle Jurassic discoveries were made in the Tyumen Formation in the 1970s, within the Krasnolenin Arch, including the Talin Field in 1976. The giant Rusanovskoye Field and Leningrad Field were discovered in the south Kara Sea in 1989-90.[4]
Since the early 2010s Russia’s state-owned energy company Gazprom has been developing Yamal project in the Yamal Peninsula area. As of 2020, Yamal produces over 20% of Russia’s gas, which is expected to increase to 40% by 2030. The shortest pipeline routes from Yamal to the northern EU countries are the Yamal–Europe pipeline through Poland and Nord Stream 1 to Germany.[5] The proposed gas route from Western Siberia to China is known as Power of Siberia 2 pipeline.[6]
Oil megaprojects
Oil megaprojects are large oil field projects.
Summary of megaprojects[edit]
Definition of megaproject: 20,000 barrels per day (3,200 m3/d) of new liquid fuel capacity.[citation needed]
Megaprojects predicted for individual years[edit]
| Overview | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 |
Application to oil supply forecasting[edit]
Number of oil fields discovered per decades grouped by average flow rates (left) and corresponding oil volumes (right) in giga-barrels (Gb). Data taken from the annexe B of Twilight in the Desert by Matthew Simmons.[1]
A series of project tabulations and analyses by Chris Skrebowski, editor of Petroleum Review, have presented a more pessimistic picture of future oil supply. In a 2004 report,[2] based on an analysis of new projects over 100,000 barrels per day (16,000 m3/d), he argued that although ample supply might be available in the near-term, after 2007 “the volumes of new production for this period are well below likely requirements.” By 2006,[3] although “the outlook for future supply appears somewhat brighter than even six months ago”, nonetheless, if “all the factors reducing new capacity come into play, markets will remain tight and prices high. Only if new capacity flows into the system rather more rapidly than of late, will there be any chance of rebuilding spare capacity and softening prices.”
The smallest fields, even in aggregate, do not contribute a large fraction of the total. For example, a relatively small number of giant and super-giant oilfields are providing almost half of the world production.[1]
Decline rates[edit]
The most important variable is the average decline rate for Fields in Production (FIP) which is difficult to assess.[4][5][6]
~~
Oil shale reserves
Oil shale reserves refers to oil shale resources that are economically recoverable under current economic conditions and technological abilities. Oil shale deposits range from small presently economically unrecoverable to large potentially recoverable resources. Defining oil shale reserves is difficult, as the chemical composition of different oil shales, as well as their kerogen content and extraction technologies, vary significantly. The economic feasibility of oil shale extraction is highly dependent on the price of conventional oil; if the price of crude oil per barrel is less than the production price per barrel of oil shale, it is uneconomic.
As source rocks for most conventional oil reservoirs, oil shale deposits are found in all world oil provinces, although most of them are too deep to be exploited economically.[1] There are more than 600 known oil shale deposits around the world.[2][3] Although resources of oil shale occur in many countries, only 33 countries possess known deposits of possible economic value.[2][4][5]
Many deposits need more exploration to determine their potential as reserves. Well-explored deposits, which could ultimately be classified as reserves, include the Green River deposits in the western United States, the Tertiary deposits in Queensland, Australia, deposits in Sweden and Estonia, the El-Lajjun deposit in Jordan, and deposits in France, Germany, Brazil, China, and Russia. It is expected that these deposits would yield at least 40 liters (0.25 bbl) of shale oil per metric ton of shale, using the Fischer Assay.[6][7]
A 2016 conservative estimate set the total world resources of oil shale equivalent to yield of 6.05 trillion barrels (962 billion cubic metres) of shale oil, with the largest resource deposits in the United States accounting for more than 80% of the world total resource.[2] For comparison, at the same time the world’s proven oil reserves are estimated to be 1.6976 trillion barrels (269.90 billion cubic metres).[8]
| Deposit | Country | Period | In-place shale oil resources (million barrels) | In-place oil shale resources (million metric tons) |
|---|---|---|---|---|
| Green River Formation | United States | Paleogene | 1,466,000 | 213,000 |
| Phosphoria Formation | United States | Permian | 250,000 | 35,775 |
| Eastern Devonian | United States | Devonian | 189,000 | 27,000 |
| Heath Formation | United States | Early Carboniferous | 180,000 | 25,578 |
| Olenyok Basin | Russia | Cambrian | 167,715 | 24,000 |
| Congo | Democratic Republic of Congo | ? | 100,000 | 14,310 |
| Irati Formation | Brazil | Permian | 80,000 | 11,448 |
| Sicily | Italy | ? | 63,000 | 9,015 |
| Tarfaya | Morocco | Cretaceous | 42,145 | 6,448 |
| Volga Basin | Russia | ? | 31,447 | 4,500 |
| Leningrad deposit, Baltic Oil Shale Basin | Russia | Ordovician | 25,157 | 3,600 |
| Vychegodsk Basin | Russia | Jurassic | 19,580 | 2,800 |
| Wadi Maghar | Jordan | Cretaceous | 14,009 | 2,149 |
| Graptolitic argillite | Estonia | Ordovician | 12,386 | 1,900 |
| Timahdit | Morocco | Cretaceous | 11,236 | 1,719 |
| Collingwood Shale | Canada | Ordovician | 12,300 | 1,717 |
| Italy | Italy | Triassic | 10,000 | 1,431 |
The table below reports reserves by estimated amount of shale oil. Shale oil refers to synthetic oil obtained by heating organic material (kerogen) contained in oil shale to a temperature which will separate it into oil, combustible gas, and the residual carbon that remains in the spent shale. All figures are presented in barrels and metric tons.
| Region | In-place shale oil resources (million barrels) | In-place oil shale resources (million metric tons) | Production in 2008 (thousand metric tons (oil)) |
|---|---|---|---|
| Africa | 159,243 | 23,317 | – |
| Democratic Republic of the Congo | 100,000 | 14,310 | – |
| Morocco | 53,381 | 8,167 | – |
| Asia | 613,145 | 83,836 | 375 |
| China | 354,430 | 47,600 | 375 |
| Pakistan | 91,000 | 12,236 | – |
| Russia | 167,715 | 24,000 | – |
| Europe | 368,156 | 52,845 | 355 |
| Russia | 247,883 | 35,470 | – |
| Italy | 73,000 | 10,446 | – |
| Estonia | 16,286 | 2,494 | 355 |
| Middle East | 38,172 | 5,792 | – |
| Jordan | 34,172 | 5,242 | – |
| North America | 3,722,066 | 539,123 | – |
| United States | 3,706,228 | 536,931 | – |
| Canada | 15,241 | 2,192 | – |
| Oceania | 31,748 | 4,534 | – |
| Australia | 31,729 | 4,531 | – |
| South America | 82,421 | 11,794 | 157 |
| Brazil | 82,000 | 11,734 | 159 |
| World total | 4,786,131 | 689,227 | 930 |
Countries by tight oil reserves
 |
This article needs to be updated. (September 2018)
|
Technically recoverable tight oil resources according to the EIA[1]
| Rank | Country/Region | Shale Oil proven reserves billion barrels |
|
|---|---|---|---|
| Total | World | 425 | |
| 1 |  Bahrain[2][3][4] |
80 | |
| 2 |  United States |
78 | |
| 3 |  Russia |
75 | |
| 4 |  China |
32 | |
| 5 |  Argentina |
27 | |
| 6 |  Libya |
26 | |
| 7 |  United Arab Emirates |
22 | |
| 8 |  Australia |
18 | |
| 9 |  Chad |
16 | |
| 10 |  Venezuela |
13 |
Break-even price of crude oil[edit]
Real and Nominal Oil Prices, 1980-2008
The various attempts to develop oil shale deposits have succeeded only when the cost of shale-oil production in a given region comes in below the price of crude oil or its other substitutes (break-even price). The United States Department of Energy estimates that the ex-situ processing would be economic at sustained average world oil prices above US$$54 per barrel and in-situ processing would be economic at prices above $35 per barrel. These estimates assume a return rate of 15%.[6] The International Energy Agency estimates, based on the various pilot projects, that investment and operating costs would be similar to those of Canadian oil sands, that means would be economic at prices above $60 per barrel at current costs. This figure does not account carbon pricing, which will add additional cost.[4] According to the New Policies Scenario introduced in its World Energy Outlook 2010, a price of $50 per tonne of emitted CO2, expected by 2035, will add additional $7.50 per barrel cost of shale oil.[4]
According to a survey conducted by the RAND Corporation, the cost of producing a barrel of oil at a surface retorting complex in the United States (comprising a mine, retorting plant, upgrading plant, supporting utilities, and spent shale reclamation), would range between $70–95 ($440–600/m3, adjusted to 2005 values). This estimate considers varying levels of kerogen quality and extraction efficiency. In order for the operation to be profitable, the price of crude oil would need to remain above these levels. The analysis also discusses the expectation that processing costs would drop after the complex was established. The hypothetical unit would see a cost reduction of 35–70% after its first 500 million barrels (79×106 m3) were produced. Assuming an increase in output of 25 thousand barrels per day (4.0×103 m3/d) during each year after the start of commercial production, the costs would then be expected to decline to $35–48 per barrel ($220–300/m3) within 12 years. After achieving the milestone of 1 billion barrels (160×106 m3), its costs would decline further to $30–40 per barrel ($190–250/m3).[1][7]
In 2005, Royal Dutch Shell announced that its in situ extraction technology could become competitive at prices over $30 per barrel ($190/m3).[8] However, Shell reported in 2007 that the cost of creating an underground freeze wall to contain groundwater contamination had significantly escalated.[9] Anyway, as the commercial scale production by Shell is not foreseen until 2025, the real price needed to make production economic remains unclear.[4]
At full-scale production, the production costs for one barrel of light crude oil of the Australia’s Stuart plant were projected to be in the range of $11.3 to $12.4 per barrel, including capital costs and operation costs over a projected 30-year lifetime. However, the project has been suspended due to environmental concerns.[1][10]
The project of a new Alberta Taciuk Processor which was planned by VKG Oil, was estimated to achieve break-even financial feasibility operating at 30% capacity, assuming a crude oil price of $21 per barrel or higher. At 50% utilization, the project was expected to be economic at a price of $18 per barrel, while at full capacity, it could be economic at a price of $13 per barrel.[11] However, instead of Alberta Taciuk Processor VKG proceeded with a Petroter retort which production price level is not disclosed.[12] Production costs in China have been reported to be as low as less than $25 per barrel, although there is no recent confirmation of this figure.[4]
Energy return on investment
In energy economics and ecological energetics, energy return on investment (EROI), also sometimes called energy returned on energy invested (ERoEI), is the ratio of the amount of usable energy (the exergy) delivered from a particular energy resource to the amount of exergy used to obtain that energy resource.[1]
Arithmetically the EROI can be defined as:
- ����=Energy DeliveredEnergy Required to Deliver that Energy.[2]
When the EROI of a source of energy is less than or equal to one, that energy source becomes a net “energy sink”, and can no longer be used as a source of energy. A related measure, called energy stored on energy invested (ESOEI), is used to analyse storage systems.[3][4]
To be considered viable as a prominent fuel or energy source a fuel or energy must have an EROI ratio of at least 3:1.[5][2]
Many years ago during a late night blogging session on The Oil Drum, and following a post by Nate Hagens, I came up with a way of plotting ERoEI that for many provided an instantaneous understanding of its importance. The graph has become known as the net energy cliff, following nomenclature of Nate and others.” Euan Mearns
Kerogen cycle[edit]
The diagram on the right shows the organic carbon cycle with the flow of kerogen (black solid lines) and the flow of biospheric carbon (green solid lines) showing both the fixation of atmospheric CO2 by terrestrial and marine primary productivity. The combined flux of reworked kerogen and biospheric carbon into ocean sediments constitutes total organic carbon burial entering the endogenous kerogen pool.[38][39]
Extra-terrestrial[edit]
Carbonaceous chondrite meteorites contain kerogen-like components.[40] Such material is thought to have formed the terrestrial planets. Kerogen materials have been detected also in interstellar clouds and dust around stars.[41]
The Curiosity rover has detected organic deposits similar to kerogen in mudstone samples in Gale Crater on Mars using a revised drilling technique. The presence of benzene and propane also indicates the possible presence of kerogen-like materials, from which hydrocarbons are derived.[42][43][44][45][46][47][48][49][50]
This places the EROI for oil shale considerably below the EROI for conventional crude oil. This
conclusion holds for both the crude product and refined fuel stages of processing. Even in its
depleted state—smaller and deeper fields, depleted natural drive mechanisms, etc.—conventional
crude oil generates a significantly larger energy surplus than oil shale. This is not a surprising
result considering the nature of the natural resource exploited in each process. The kerogen in
oil shale is solid organic material that has not been subject to the temperature, pressure, and other
geologic conditions required to convert it to liquid form. In effect, humans must supply the
additional energy required to “upgrade” the oil shale resource to the functional equivalent of
conventional crude oil. This extra effort carries a large energy penalty, producing a much lower
EROI for oil shale.
There remains considerable uncertainty surrounding the technological characterization, resource
characterization, and choice of the system boundary for oil shale operations. Even the most
thorough analyses (Brandt, 2008, 2009) exclude some energy costs. These two observations lead
to the conclusion that oil shale cannot yet be “certified” as a clear net energy producer. Put
another way, we cannot yet say with certainty that the EROI for oil shale is unequivocally
greater than 1.
An important caveat is in order here: the EROI of 1-2 reported by Brandt includes self energy
use, i.e., energy released by the oil shale conversion process that is used to power that operation.
For example, most of the retorting energy in the ATP process is provided by the combustion of
char and produced gas, significantly reducing energy needs from the point of view of the
operator.
~~
~~~
The oil and gas sector plays an important role in the economy by drilling, extracting, and processing oil and gas. Because operating expenses vary widely with the size of oil and gas companies, average operating expenses tend to be meaningless. Financial professionals typically assess the average operating expenses by looking at the average operating expense margin, which is expressed as a percentage of operating expenses in the sector’s total revenues.
KEY TAKEAWAYS
- The oil and gas industry is vital to the economy, but operating expenses vary widely.
- To assess the industries, analysts use the average operating expenses to achieve an average operating margin.
- Production companies tend to have the highest margins, while well service and equipment companies have the lowest margins.
Oil and Gas Sector
The oil and gas sector consists of fully integrated companies that handle most aspects of oil and gas drilling and marketing. Then there are companies that specialize in areas, such as exploring and production, and oil well services and equipment.
Key integrated oil and gas companies include the oil majors and big-name companies, such as Chevron and ExxonMobil. There are many exploration and production companies, which tend to focus on finding and drilling for oil. Notable names here include Occidental, Apache Corporation, Devon Energy, Dominion Energy, and EOG Resources.1 2 3 4 5
Oil well equipment and service companies provide support services to exploration and production companies. They generally do not produce oil. Notable companies in this space include Baker Hughes and Halliburton.67
Of all the industries within the oil and gas sector, oil and gas exploration and production has the largest number of firms. The integrated gas and oil industry has the lowest number of companies.
Operating Margin
The operating expenses margin differs widely in the oil and gas sector. Oil and gas production companies have some of the highest margins among all companies in the sector, with an operating margin of 14.97% as of the fourth quarter of 2019.8 Oil and gas well services and equipment boast the lowest operating expenses margin of 12.3%.
Modification of the unit technical cost equation for the accurate determination of the cost of producing a barrel of oil in relation to the Contractor’s revenue
Abstract
The unit technical cost (UTC) is the profitability indicator used in the oil and gas industry to determine the cost of producing a barrel of oil. The method used to calculate the UTC has certain limitation as it does not capture the entire cost burden borne by the contractor in respect to the revenue they generate from investments in the exploration and production of hydrocarbon. This is as a result of the front-end loaded nature of oil and gas Nations fiscal system. This research therefore modified the equation used to calculate the UTC and termed it as the modified UTC (MUTC).
Modification of the UTC equation captured the entire technical cost
burden borne by the contractor in relation to the CT’s revenue
generated. The CT’s NCF when the oil price was the same amount
with the MUTC for Scenario 1 ($18.78 per barrel), Scenario 2
($22.09 per barrel) and Scenario 3 ($23.66 per barrel) was zero. The
modification of the UTC enables the determination of the breakeven
oil price for the investment. The MUTC was more accurate than the
UTC for the determination of the profitability of E&P investment
since most fiscal systems are embedded with royalty and bonuses
that must be deducted from the gross revenue before tax
calculations
Equinor Closes In On $1 Billion Deal To Buy Suncor’s UK Oil Assets
Norwegian oil and gas major Equinor is nearing a deal to buy the UK North Sea assets of Canada’s Suncor Energy for around $1 billion, Reuters reported on Wednesday, citing sources with knowledge of the matter.
Suncor Energy has a 40% stake in the Rosebank field, operated by Equinor, off the Shetland Islands. Equinor and partners are expected to make a final investment decision on the field’s development this year amid increased tax rates for operators in the UK North Sea and strong opposition from environmentalists to the development of Rosebank and other major oil and gas fields in the North Sea such as Cambo.
Suncor, Canada’s third-largest energy company, also holds 29.9% in the huge Buzzard field in the UK North Sea. Buzzard is the biggest supplier to Forties, one of the crude grades in the Brent crude benchmark.
Buzzard oil field
| Buzzard Oil Field | |
|---|---|
.jpg)
An oil platform departing Hartlepool for the Buzzard field in 2010
|
|
| Country | United Kingdom |
| Region | North Sea |
| Offshore/onshore | offshore |
| Operator | CNOOC – 43%, |
| Partners | Suncor Energy – 30%, BG Group – 22%, Edinburgh Oil & Gas – 5% |
| Field history | |
| Discovery | 2001 |
| Start of production | 2007 |
| Peak year | 2009 |
| Production | |
| Current production of oil | 85,500 barrels per day (~4.26×106 t/a) |
| Year of current production of oil | 2020 |
| Estimated oil in place | 1,500 million barrels (~2.0×108 t) |
The Buzzard Oil Field is an oil field located in the North Sea Blocks 19/10, 19/5a, 20/6 and 20/1s.[1] It was discovered in 2001 by PanCanadian, and developed initially by PanCanadian’s successor EnCana and then by Nexen. The oil field was initially operated and owned by Nexen which is now a subsidiary of China’s CNOOC.
The field[edit]
The total proven reserves of the Buzzard oil field are 240 million cubic metres (1.5 billion barrels), and production will be centered on 28,670 cubic metres (180,300 bbl) per day.[2]
The Buzzard reservoir has a low gas/oil ratio and requires pressure maintenance through water injection. Buzzard’s oil consists of medium sour crude: 32.6° API, 1.4% sulphur.[3]
Performance Profiles of Major Energy Producers 2009
Release Date: February 25, 2011 | Next Release Date: December 2011
Lifting Costs
Lifting costs (also called production costs) are the costs to operate and maintain wells and related equipment and
facilities per barrel of oil equivalent (boe) of oil and gas produced by those facilities after the hydrocarbons have
been found, acquired, and developed for production.15 Direct lifting costs are total production spending minus
production taxes (and also minus royalties in foreign regions) divided by oil and natural gas production in boe.
Total lifting costs are the sum of direct lifting costs and production taxes.
Reversing an almost decade-long upward trend, worldwide total lifting costs for the FRS companies fell $2.66 per
boe, to $10.04 per boe, in 2009 (Table 10). Total lifting costs also fell in each of the FRS regions, except Canada,
where they rose $2.49 dollars, probably reflecting the inclusion of oil sands there in 2009.16 The FRS regions with
the largest decline in total lifting costs, the U.S. Onshore, the U.S. Offshore, the Middle East, and the Other
Eastern Hemisphere, sustained declines of $4.55, $3.83, $2.91, and $2.61 dollars, respectively.
Production taxes were the major contributor to the decline in total lifting costs. Worldwide they declined $2.30
per boe in 2009, which is 86 percent of the decline in total lifting costs (Table 9). Production taxes typically rise
and fall with changes in the prices of oil and natural gas, both of which fell in 2009. All FRS regions except
15 Because oil and gas are often produced together, it is not usually feasible to separate their costs, so lifting cost calculations
are based on oil and natural gas production combined.
Performance Profiles of Major Energy Producers 2009 19
16 Oil sands often have high lifting because of the considerable amount of processing that must be done to them before the
leave the production area.
Lifecycle Energy Accounting of Three Small Offshore
Oil Fields
David Grassian * and Daniel Olsen
Program in Systems Engineering, Walter Scott Jr. College of Engineering, Colorado State University, Fort Collins,
CO 80523-1302, USA
* Correspondence: Dave.Grassian@colostate.edu
Received: 7 June 2019; Accepted: 15 July 2019; Published: 17 July 2019
Abstract: Small oil fields are expected to play an increasingly prominent role in the delivery of global
crude oil production. As such, the Energy Return on Investment (EROI) parameter for three small
offshore fields are investigated following a well-documented methodology, which is comprised of
a “bottom-up” estimate for lifting and drilling energy and a “top-down” estimate for construction
energy. EROI is the useable energy output divided by the applied energy input, and in this research,
subscripts for “lifting”, “drilling”, and “construction” are used to differentiate the types of input
energies accounted for in the EROI ratio. The EROILifting time series data for all three fields exhibits a
decreasing trend with values that range from more than 300 during early life to less than 50 during
latter years. The EROILifting parameter appears to follow an exponentially decreasing trend, rather
than a linear trend, which is aligned with an exponential decline of production. EROILifting is also
found to be inversely proportional to the lifting costs, as calculated in USD/barrel of crude oil. Lifting
costs are found to range from 0.5 dollars per barrel to 4.5 dollars per barrel. The impact of utilizing
produced gas is clearly beneficial and can lead to a reduction of lifting costs by as much as 50% when
dual fuel generators are employed, and more than 90% when gas driven generators are utilized.
Drilling energy is found to decrease as the field ages, due to a reduction in drilling intensity after the
initial production wells are drilled. The drilling energy as a percentage of the yearly energy applied
is found to range from 3% to 8%. As such, the EROILifting+Drilling value for all three fields approaches
EROILifting as the field life progresses and the drilling intensity decreases. The construction energy is
found to range from 25% to 63% of the total applied energy over the life of the field.
Keywords: oil and gas; energy accounting; EROI; energy intensity; lifting energy; drilling energy;
construction energy; lifting cost
Assessing Global Long-Term EROI of Gas: A Net-Energy
Perspective on the Energy Transition
Louis Delannoy 1,2,* , Pierre-Yves Longaretti 1,3, David. J. Murphy 4 and Emmanuel Prados 1
Citation: Delannoy, L.; Longaretti,
P.Y.; Murphy, D.J.; Prados, E.
Assessing Global Long-Term EROI of
Gas: A Net-Energy Perspective on the
Energy Transition. Energies 2021, 14,
5112. https://doi.org/10.3390/
en14165112
Academic Editor: Susan Krumdieck
Received: 30 July 2021
Accepted: 16 August 2021
Published: 19 August 2021
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4.0/).
1 University Grenoble Alpes, CNRS, Inria, LJK, STEEP, 38000 Grenoble, France;
pierre-yves.longaretti@inria.fr (P.-Y.L.); emmanuel.prados@inria.fr (E.P.)
2 Petroleum Analysis Centre, Staball Hill, Ballydehob, West Cork, Ireland
3 University Grenoble Alpes, CNRS, INSU, IPAG, CS 40700, 38052 Grenoble, France
4 Department of Environmental Studies, St. Lawrence University, 205 Memorial Hall, 2 Romoda Dr.,
Canton, NY 13617, USA; dmurphy@stlawu.edu
* Correspondence: delannoy.louis@outlook.com
Abstract: Natural gas is expected to play an important role in the coming low-carbon energy
transition. However, conventional gas resources are gradually being replaced by unconventional
ones and a question remains: to what extent is net-energy production impacted by the use of lowerquality energy sources? This aspect of the energy transition was only partially explored in previous
discussions. To fill this gap, this paper incorporates standard energy-return-on-investment (EROI)
estimates and dynamic functions into the GlobalShift bottom-up model at a global level. We find
that the energy necessary to produce gas (including direct and indirect energy and material costs)
corresponds to 6.7% of the gross energy produced at present, and is growing at an exponential rate:
by 2050, it will reach 23.7%. Our results highlight the necessity of viewing the energy transition
through the net-energy prism and call for a greater number of EROI studies.
Keywords: gas; net-energy; EROI; energy transition
Preliminary Calculation of the EROI for the Production of Gas in Russia
Calculations show that the EROI of the gas production in Russia is declining (Table 11).
Table 11. EROI for gas production.
It should be kept in mind that the calculations for Gazprom and NOVATEK include energy costs
for the production and transportation of gas. Without transportation at the start of the pipeline, we
calculated the EROI for traditional gas at about 116. For shale gas, the EROI of course must be lower,
because more drilling activity is needed, as well as fracturing. As we might have expected, the EROI
for the gas production is high; however, we need more accurate calculations with additional data.
It should be noted that the EROI for gas production is higher than the average EROI for
hydrocarbon production in Russia. This means that the EROI for oil production must be below the
average level. At the same time, the EROI for the gas production is declining, and this means that the
gas production is negatively affecting the dynamics of the EROI for hydrocarbon production in Russia.
Accurate calculation and deep analysis of EROIextr and EROIdev requires more data, specifically:
(1) Energy cost for extraction;
(2) Energy cost for additional drilling and construction;
(3) Material costs;
(4) Energy cost for transportation.
Companies have these data, and it can be published in reports.
~~
n December 13th, 2021.
RANJAN AND ROG DISCUSS CARBON INDULGENCES IN THE CHURCH OF CLIMATE/COVID CATASTROPHISM
HD TORRENT WHO-ATE-ALL-THE-PIES. BILDEBERG THE MOVIE , THE NEW HYDROCARBON/OIL STANDARD
https://vimeo.com/ondemand/bilderbergthemovie/259660263
Based on Daniel´s Estulin Best Seller, Bilderberg, The Movie is the original documentary film about the origins, development and expansion of one of the most elitist and secret organizations in today’s world: The Bilderberg Group.
Once a year, the most powerful people on the planet, meet behind closed doors. The Group is comprised of European Prime Ministers, American presidents, and the wealthiest CEOs of the world, all coming together to discuss the economic and political future of humanity.
BILDERBERG DOKUMENTARNI FILM
https://www.youtube.com/watch?v=39PjrFtD8TQ
Can be watched here with Subtitles of your choice.
https://wikispooks.com/wiki/Daniel_Estulin
Daniel Estulin is a Lithuanian researcher on Deep Politics in general and the Bilderberg Group in particular. He was the host of Desde la sombra on the Spanish RT program,[1][2] and invited to the European Parliament in 2010 by a member Lega Nord to discuss on his findings about the Bilderberg Group.
December 17th, 2021.
DO THE CANTANGO, BACKWARDATION TO MONOPOLY. POWER WORK TIME BLOOD. SIXTEEN TONS SELLING YOUR SOUL TO
COL L FLETCHER PROUTY. THE DIRTY TRUTH ABOUT OIL.
The price of oil is arguably the most important in the world economy. How did we become so dependent – and are we ever likely to wean ourselves off it?
https://www.bbc.co.uk/sounds/play/w3csz2wt
BIOGENIC V. ABIOGENIC OIL: WILL WORLDWIDE PRODUCTION PEAK? – STANFORD S. PENNER, PHD (2006)
7 JUL 2015 HUMANITY VS INSANITY – #44 : GREEK TRAGEDY PT1 – WITH WILLIAM ENGDAHL
14 JUL 2015 HUMANITY VS INSANITY – #45 : THE GREEK TRAGEDY PT2 – WITH F. WILLIAM ENGDAHL
RECORDED IN EARLY AUTUMN 2007 PEAK OIL : MYTH OR REALITY
THE ORIGINS OF OIL FALSELY DEFINED IN 1892 BY ROCKEFELLER
LINDSEY WILLIAMS THE NON ENERGY CRISIS
Giant oil field decline rates and their
influence on world oil production
Mikael Höök*
, Robert Hirsch+
, Kjell Aleklett*
Contact e-mail: Mikael.Hook@fysast.uu.se
* Uppsala University, Global Energy Systems, Department of physics and astronomy,
Box 535, SE-751 21, Uppsala, Sweden
http://www.fysast.uu.se/GES
+ Management Information Services, Inc. (MISI), 723 Fords Landing Way, Alexandria,
VA, 22314, U.S.A.
Abstract
The most important contributors to the world’s total oil production are the giant oil fields. Using
a comprehensive database of giant oil field production, the average decline rates of the world’s
giant oil fields are estimated. Separating subclasses was necessary, since there are large
differences between land and offshore fields, as well as between non-OPEC and OPEC fields.
The evolution of decline rates over past decades includes the impact of new technologies and
production techniques and clearly shows that the average decline rate for individual giant fields
is increasing with time. These factors have significant implications for the future, since the most
important world oil production base – giant fields – will decline more rapidly in the future,
according to our findings. Our conclusion is that the world faces an increasing oil supply
challenge, as the decline in existing production is not only high now but will be increasing in the
future.
Key words:
Giant oil fields, decline rates, future oil production, peak oil
Production Lifting Costs Shrinking
The savings result in part from the depreciation of global currencies against the US dollar, as most operating expenses in oil and gas production are realized in local currencies. Brazil leads in savings.
https://jpt.spe.org/production-lifting-costs-shrinking
Lifting costs per barrel of oil equivalent (BOE) could drop significantly as a byproduct of the COVID-19 pandemic and price collapse, with Brazil leading the world in savings, according to a recent analysis by Rystad Energy. Rystad calculates Brazil’s savings at $2.30/bbl compared to its pre-downturn estimate. Mexico’s savings rank second, at $1.80/bbl, and Russia’s third, at $1/bbl. The top three savers are followed by Norway, the UK, Canada, and Australia.
Iran Moves To Expand Supergiant Oilfield Amid Global Crude Crisis
- Iran is one of the only countries on earth with the potential to add significant oil supply to a global oil market that is desperately tight.
- In its latest attempt to leverage its significant oil reserves in order to restart JCPOA negotiations, Iran has announced a huge expansion of its Azadegan field.
- The location of the Azadegan field, which borders Iraq, is also significant as it is impossible for the U.S. to determine the origin of the crude that is extracted from this field.
A principal strategy being used by Iran to pressure the U.S. into dropping the conditions required for a new iteration of the Joint Comprehensive Plan of Action (JCPOA) to be agreed upon is to position itself as a huge reservoir of oil (and gas) that can be used to bring global oil prices down and alleviate the economic hardships that these are causing. Given the inability of OPEC member states, and Russia, to materially increase their production of crude oil, Iran has announced a huge expansion of another of its supergiant oil reservoirs, Azadegan, which is split into two main fields – North and South. Aside from placing added pressure on the U.S. to meaningfully re-engage in the JCPOA re-negotiation process, Iran’s dramatic expansion program across a range of oil fields has another added benefit for Tehran. This is that the fields in which such expansions are taking place are all shared with Iraq – unlike Iran and its sponsor, Russia, not subject to any sanctions – meaning that they can be part of the process of obfuscating provenance and transit routes that have allowed Iran to circumvent sanctions for over 40 years.
https://yearbook.enerdata.net/crude-oil/world-production-statistics.html
~~
Saudi Arabia’s Sabotage of the Economy Will Backfire
With its surprise cut in oil production, write Yale SOM’s Jeffrey Sonnenfeld and Steven Tian and Congressman Ro Khanna LAW ’01, Saudi Arabia has chosen to side with the Russian war machine.
Abdulaziz bin Salman, Saudi Arabia’s Minister of Energy, speaks at a press conference on October 5 after an OPEC+ meeting.
Photo: Vladimir Simicek/AFP via Getty Images
Russia And Iran Look To Strengthen Grip On Global Oil Markets
- Russian and Iranian officials have signaled a new ‘Golden Age’ of cooperation between the countries.
- Tehran and Moscow are “determined to strengthen cooperation in all sectors”.
- With unfettered access now to Russian technology and equipment, Iran should be able to significantly increase the recovery rate at its oilfields.
When a senior government minister of either Iran or Russia says that the two countries are now experiencing a ‘golden age’ in developing relations between them then it’s a pretty safe bet that one or more countries somewhere are going to be in serious trouble pretty soon. Iranian Petroleum Minister, Javad Owji’s, comment was echoed by senior Russian officials, which makes matters much worse for everyone else, as did his additional statement that the authorities of the two countries are “determined to strengthen cooperation in all sectors”.
Cost of Oil Production by Country
Cost of Production per Barrel of Oil:
US 36.20 vs Russia $17.20 and Saudi Arabia $9.90
Current Crude Oil Price $22.76 pic.twitter.com/NUcxpa95W2— 🇪🇺 🇲🇨🇨🇭Dan Popescu 🇫🇷🇮🇹🇷🇴 (@PopescuCo) April 14, 2020
Cost of Production per Barrel of Oil:
US 36.20 vs Russia $17.20 and Saudi Arabia $9.90
Current Crude Oil Price $22.76 pic.twitter.com/NUcxpa95W2— 🇪🇺 🇲🇨🇨🇭Dan Popescu 🇫🇷🇮🇹🇷🇴 (@PopescuCo) April 14, 2020
source: tradingeconomics.com
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