Oil production continues on plateau, set to decline in 2009

Monday, July 23, 2007

From the executive summary of a detailed article posted on The Oil Drum:

1. World total liquids supply production (Fig 1) remains on a peak plateau since 2006 and is forecast to fall off this peak plateau in 2009. As long as demand continues increasing then prices will also continue increasing.

2. Forecast world crude oil and lease condensate (C&C) production retains its 2005 peak (Fig 2). The forecast to 2100 shows declining C&C production, using a bottom up forecast to 2012 (Fig 3). The forecast to 2012 shows a 1%/yr decline rate to 2009, followed by a 4%/yr decline rate to 2012.

3. World oil discovery rates peaked in 1965 (Fig 4) and production has exceeded discovery for every year since the mid 1980s. Discoverable reserves in giant fields also peaked during the mid 1960s (Fig 5). The time lag between world peak discovery in 1965 and world peak production in 2005 of 40 years is similar to the time lag of 42 years for the USA Lower 48 (Fig 6).

4. World C&C year on year production changes to March 2007 and April 2007 (Figs 7,8) show significant declines for Mexico, North Sea and Saudi Arabia; significant increases for Russia, Azerbaijan and Angola. As Russia is likely to be on a production plateau and Saudi Arabia has probably passed peak production, the world C&C production will continue to decline slowly.

5. Key producer Saudi Arabia recently released an updated project schedule which does not show originally scheduled expansions of Shaybah phase 2, 0.25 mbd and Al Khafji Neutral Zone, 0.30 mbd. Consequently, it is now almost a certainty that Saudi Arabia passed peak C&C production of 9.6 mbd in 2005 (Figs 9,10).

6. World natural gas plant liquids is forecast to increase due to new OPEC projects (Fig 11). World ethanol and XTL production is forecast to double by 2012 (Fig 12). World processing gains are forecast to decline slowly to 2012 (Fig 13).