Monday, October 03, 2005

La Fin du Pétrole

In plain English, that's the end of oil. Jerome a Paris, one of my favorite bloggers, has a post from this last weekend where he provides a summary of an article from the weekend's Le Monde newspaper (in French, and from the Sunday magazine, which isn't online). Definitely give it a read, especially if you're new to the peak oil subject; here are a couple of cherry-picked highlights:

The article notes that non-OPEC production is certain to peak at the latest in 2010, and that we will increasingly depend on OPEC oil, and especially on Saudi oil. The article gives a good summary of Matt Simmons's claims that Saudi reserves are probably inflated and that nobody knows the real numbers as no reliable information has been provided since Aramco was nationalised. It quotes several Saudi executives with very pessimistic forecasts: one, Nawaf Obaid, strategic advisor to the Saudi Ambassador to the US, says that Saudi Arabia would like not to ever produce more than 12 mb/d ("but no other country is ready to invest today to allow Saudi Arabia to slow down its production"); the other, Sadad Al-Husseini, former n°2 of Saudi Aramco, says that the country does not have today the capacity to go to 15 mb/d; it would need years to get there and, if it did, say by 2015,  it would not be able to sustain that level for more than 10 or 15 years before irreversible - and rapid - decline set in. Under Simmons' pressure, the Saudis have now provided some numbers that showed that Ghawar, the biggest field in the world, is now 48% depleted, and its production (and that of the other big Saudi fields) declining by 5-12% per year.
What appears throughout the article is that oil companies, at least, seem well aware of the problem, and have now decided that their interest was to publicise the problem and no longer to deny it. Jon Thomson, the exploration & production head for ExxonMobil spoke at the 2003 APSO conference (when these were fairly discreet affairs) and was already saying then that "to satisfy current demand, we need to find a new North Sea every 18 months... Where are we going to find 10 North Seas?". The graph at the top of this diary was prepared by ExxonMobil, which did a huge work to collect all doscovery data and backdate them properly. And now Chevron is making the ad campaign we mentioned in an earlier diary about peak oil, and Total is running ads in France which say "for you, our energy is limitless". Hints, hints, but they are getting clearer every day, it seems... (Simmons is quoted as saying that prior to the publication of his book this summer, "only 2 people in Washington were worrying about the issue")

3 years ago, these companies refused to acknowledge the problem. Now they'd like it to become more public. Once the non-OPEC peak happens, they will be highly vulnerable against the "real" majors, the national oil companies of the countries which still have reserves, most of which close them off to outside players.


Post a Comment

Links to this post:

Create a Link

<< Home