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Everything posted by ian_whitchurch

  1. In reply to: healyn on Monday 07/01/08 12:45pm Healyn, 'The Sandia team envisions a day when CR5s are installed in large numbers at coal-fired power plants. Each of them could reclaim 45 pounds of carbon dioxide from the air daily and produce enough carbon monoxide to make 2.5 gallons of fuel. Coupling the CR5 with CO2 reclamation and sequestration technology, which several scientists already are pursuing, could make liquid hydrocarbons a renewable fuel, Stechel said. "It's certainly technology that can be developed," she said. "It's not that it's challenging, it's that the ideas aren't economically viable yet." ' So lemme get this straight. We heat up a 88 square meter solar furnace, at unknown amounts of capex, with a presumably ultrarefined cobalt ring (at $45/pound for wholesale, presumably not ultrarefined cobalt) ... drum roll ... six liters of fuel (presumably a day). At seven barrels to a ton thats ... a twentieth of a barrel per day, right ? I'm putting this one with Oil Shale, under 'Less Economic Than Patchouli-Flavoured Vegetable Oil Running The Hippie's VW'
  2. The problem with EROEI arguments is that some forms of energy are a lot more convenient than others. For example, I can pour 10 liters of oil into a bucket, seal it with a plastic lid, and then send it around the world by truck twice, with no further special handling required. On the other hand, natural gas is less convenient, and electric energy from whatever source less convenient still. The market recognises this by having some forms of energy as cheaper than others. This is deliberately ignored by EROEI proponents. Me, I say we are in a capitalist society, and at the end of the day it's about the dollars, not the joules.
  3. In reply to: apache123 on Friday 19/10/07 08:55am My problem isnt with BP's numbers per se - although I do think that various parties have overestimated their reserves. My problem is with the idea that with 2 of the world's 3 great fields in decline, and the North Sea in general in decline, and with the Continental US in decline, that we can keep ramping production up by a million barrels per day, each and every year, over and above what is necessary to compensate for decline at Cantarell, Burgan and so on. It doesnt matter what reserves you have if they come out of the ground slowly if at all. And Canadian tar sands are the poster child for this problem.
  4. QUOTE (davo22 @ Monday 01/10/07 04:15pm) Nahh, it was originally written to this bloke called Zarkov, over on Brad deLong's site. It's the standard rant I use whenever anyone tries to use abiotic oil as a reason for Why Everything Will Be Alright. Ian Whitchurch
  5. In reply to: davo22 on Saturday 29/09/07 06:27am The intellectual snake oil of Abiotic Oil is being sold again. Well, here is a rant I prepared earlier. Zarkov wrote, regarding abiotic oil, "its advocates claim thousands of publications have appeared in peer-reviewed journals, and that it forms the basis of petroleum exploration in Russia." The first half of this statement may well be correct ; the second half of the statement (like the theory of abiotic oil) is absolute and complete horseshit. The Russian industry, and the Soviets before them, work the same as everyone else does - find source, find reservoir, find seal, see if it filled. And when we say 'source' we generally mean high organic matter rocks, generally black marine shales, because they kick ass as source rocks. If you dont believe me, read some of Alexi Kontorovich's stuff - he used to be the head of the Petroleum Division of the Siberian Branch of the Soviet Acadamy of Science, and after that worked for a little company called Yukos, at least until the tax police working for the Little Father, Vladimir, turned up with machineguns. Oh, and if Alexi's a little old-school for you, a recent scholarly cite for you. JPG, v23, April 2003, p225 ... Lopatin et al "UNCONVENTIONAL OIL ACCUMULATIONS IN THE UPPER JURASSIC BAZHENOV BLACK SHALE FORMATION, WEST SIBERIAN BASIN: A SELF-SOURCED RESERVOIR SYSTEM". Here's the web link http://www.blackwell-synergy.com/doi/abs/1....2003.tb00027.x First para "The Upper Jurassic Bazhenov Formation in the central West Siberian Basin is a classic marine black shale unit containing abundant Type II kerogen with high oil-generation potential. These shales source around 90% of the oil in the West Siberian Basin." Lookie that. Marine black shale, said by Russian petroleum geologists to source 90% of the West Siberian basin ... I'll throw down the gauntlet on this as I do always - find me an abiotic oil field. We have a couple of hundred thousand oil fields, not all of em found with the benefit of science. Surely, if the abiotic oil proponents are something more than the gullible led by the weak minded, one good size field will have an acute lack of source. Sure, we havent found the source in some of them, because oil, is, like, a liquid and can move from place to place. But even these oils have biomarkers all through them - biomarkers that wont exist if it's abiotic. And if you actually drill the source shales, you find microfossils. Which is just as well, because micropaleontology is how you generally date the age of the oil, which is important if you want hints to where to start looking for the rest of it. Look, I'm in the industry. Abiotic oil would be great, really - if all we had to find was seal and reservoir, life would be so much easier. But you always have to have source. Always. And if you dont believe me, get together with the rest of your Abiotic Oil mates, get together some money and go find youselves some Abiotic Oil. Until you do this, prepare to get regularily humiliated by me every time you raise the topic, because Abiotic Oil is a pernicious fallacy that will distract us from what we need to do - finding a dozen silver BBs to fix the problem that the $5 oil is gone, the $20 oil is running out and the $60, $80 and $100 oil aint lookin to me like it can sustain the 100 mmbd that it's likely we'll want. Ian Whitchurch
  6. In reply to: theflasherman on Monday 20/08/07 09:49pm TOD is absoluely pwning the traditional media on this one. www.theoildrum.com
  7. In reply to: annaliese on Monday 20/08/07 08:01pm Glad to see the markets are so confident in Cantarell's ability to sustain a cat 2 strike ... because, based on 1955 Janet, thats exactly what we're looking at. http://weather.unisys.com/hurricane/atlantic/1955/index.html
  8. In reply to: annaliese on Saturday 18/08/07 01:26pm Cantarell is on the west side of the Yucatan peninsula. Some of the models are predicting a path quite close to it ... the good news is to get there it has to lose power going of the Yucatan Peninsula.
  9. In reply to: ADMIN1 on Monday 09/10/06 10:12am Book Review George Orwel "Black Gold" (John Wiley 2006) This is a book aimed at investors. I think it misses. Basically, it's a book in two parts. The first part is a discussion of the history of oil, peak oil and middle eastern oil. I could cavil at a couple of errors in this (for example, on page 3, he talks about oil prospects "in the Russian side of the frigid Black Sea" - he probably means the White Sea, up near the Artic Circle), but generally it's a pretty good survey. We're not talking Daniel Yergin's "The Prize" here, but it's a pretty good summary. My problems come in the second part, where he discusses investment options. He doesnt talk about what sort of reserves companies own - proved, probable, possible, P10, P50, P90. He doesnt talk about different grades of oil, and why some are more important or less important than others. He doesnt talk about the life cycle of projects. He doesnt talk about the differences between monetising oil and monetising gas. This stuff is more or less the same, no matter whether we are talking BP, Oilsearch, or Rawson Resources. In the case of Big Oil, there are more zeroes - but development of a Kovytka for a BP or a Sakhalin for Shell is pretty darn similar to Kimu for Mosaic, or Turtle/Barnett for Drillsearch. It's also important, as reserves upgrades and downgrades directly impact a company's stock price - and dont think it's just the small end of the market that can get busted playing games with reserves ... Shell got caught in 2004 claiming reserves were "proved" when they were less certain, resulting in a 25% downgrade in their proved reserves. Actually, the lack of any detailed discussion of the 2004 Shell downgrades is another minus for the book. Surprisingly for an American book, he doesnt talk at all about direct ownership of oil and gas leases or royalties. Also surprisingly, he doesnt talk about directly owning oil through futures contracts. There is room in the market for a book aimed directly at people interested in investing in oil and gas. But Orwell's "Black Gold" isnt it. Ian Whitchurch
  10. In reply to: apache123 on Thursday 07/09/06 09:20am Apache, I was going to write a long post on Jack and what it means, but the Energybulletin dot points covered it nicely. At the moment, Jack is a probable Big Cat ... but what worries me is the six thousand bopd on test. Worrior-1 did 3000, and it was a $1.5m well, as opposed to the $100m plus capex that Jack represents. Yeah, it upgrades the trend. But it aint anywhere close to being Proven reserves. Ian Whitchurch
  11. ian_whitchurch


    In reply to: danr on Sunday 03/09/06 09:16pm Danr wrote, "To say that the oil companies will get 70% is a ridiculous statement (especially with 20% backin option)," *does some quick maths* Assuming 30% company taxes are net of costs (and this field aint goanna be particularly cheap, especially if we're talking some relatively heavy oil and a pipeline to the coast), and assuming that there's a 10% royalty, and assuming that the government doesnt pony up it's 20% but rather gets carried at a third for a quarter ... yeah, I can see the oil company getting to 70%, especially during the X years they are amortising their exploration and development costs. Sure, make some different assumptions and you can show the Company coming out with 40% or less, but I wouldnt call it a ridiculous statement. The transparency issue also applies to potential owners of the oil company by the way, because the cut going to the host government and other local stakeholders clearly affects how much money is left in the tin for shareholders. Ian Whitchurch PS Speaking in general, tax rates and production sharing contract terms are really important. And everywhere you go, they are different.
  12. ian_whitchurch


    In reply to: danr on Sunday 03/09/06 08:18pm Danr, It isnt that simple. Is the company tax net of costs or gross on gross oil revenue ? Is it a Production Sharing Contract or a Wellhead Royalty ? What period is uplift of exploration costs allowed on - is it, say, assessed at 100% of sunk exploration and development costs in the first 3 years, or is it spread over 5 ? Speaking from a transparency point of view, I think you're better off having it all out in the open where people can see it, rather than letting rumour run wild and waking up one morning to find a sudden new government that has cancelled your leases. Ian Whitchurch
  13. In reply to: nizar on Sunday 13/08/06 08:42pm It's from Forbes magazine. And therefore it's full of crap. Seriously, even if there is a major recession, and a resulting fall of several mmbd in demand then I can see (a) production cutbacks by Iran, Venezula and Russia and (b) continued problems in accelerating production due to a lack of equipment and skilled personell. Ian Whitchurch
  14. In reply to: IGO4IT on Sunday 13/08/06 10:24am Lets see if the fighting actually stops ? Ands in any case, this is a localised conflict that has had little effect on oil production or sales. Prudhoe Bay going off line is way more important. Ian Whitchurch
  15. In reply to: apache123 on Friday 11/08/06 09:27am Apache, Thats the $64 question, isnt it - can the Sauids find 400 000 extra bopd of light, sweet crude within 90 days or so ? Ian Whitchurch
  16. ian_whitchurch


    Albion, You may review my history on Innaminka when it was at a buck or more, or for that matter me arguing with Lmorgante over INP in 2005 over at Hotcopper. The market got it wrong then, and I got it right. Likewise, you may want to check the price of Carnarvon over a longer time frame. Yes, Vernon wants out of those tenements - but that doesnt affect INP's stock. Indeed, to go back to the CVN argument, the key event could have been when the tenements were moved to a partner that actually liked them. Ian Whitchurch
  17. ian_whitchurch


    In reply to: albion on Thursday 27/07/06 02:56pm Albion, It's not accurate that Vern Faulconer is dumping shares in INP - they are looking to reduce their holdings in INP's tenements. Ian Whitchurch
  18. QUOTE (TheFerret @ Wednesday 26/07/06 10:38pm) In general, P/E doesnt mean sh!t with oil companies. It's about reserves and/or DCF and/or exploration potential. All of which, in my opinion, value COE at above 50 cents. Ian Whitchurch PS 2400 bopd with no water is what I'd consider a good DST result. Even when you own 25% of it.
  19. In reply to: Greybeard on Wednesday 26/07/06 03:13pm Greybeard, I dont think you are being fair to Simmons - you may want to check around p49-53 or so of his 11 April 2006 presentation to the API, where he gets very technical on several major gas fields. There is also the data point of Gazprom being unable to deliver gas to Europe last winter - http://www.mosnews.com/money/2006/06/06/ga...rnseurope.shtml is a good summary. http://www.gas-matters.com/news2_1.shtml is an example of the fallout. Now, none of us know what really went on - but if Gazprom had spare capacity, then this crisis wouldnt have happened, regardless of what Ukraine did or didnt do and why. I'd argue that while gas is not fungible, LNG is - assuming you have a pipeline connected to an appropriate LNG facility (and as a side note, my gut feeling is at the end of the day those LNG facilities will be built in Mexico). There is also the issue that to turn straded gas into LNG, you need a fair whack of stranded gas flowing at good rates, or existing pipeline going near to such a facility. So even with LNG selling for what it does, I dont think Kimu (to pick an example) is going to get developed in a hurry. It is notable that - despite $2-3 gas in the eastern half of Australia - our only LNG facilities in Australia are on the north-west shelf. I've heard rumours about a LNG facility to be built in Victoria, but I'll believe it when I see an announcement by BHP. In any case, given the lead times involved with LNG and similar, if peak gas is 20 years away, we need to start work now. Especially if cheap oil is not available to replace gas power. Ian Whitchurch
  20. In reply to: apache123 on Tuesday 25/07/06 10:23am Apache, That is the $104 question - can Ghawar maintain it's production ? Ian Whitchurch
  21. In reply to: filament on Monday 24/07/06 11:58am This relates to the debate Kahuna and myself were having earlier in the year about whats coming online and oil supply issues. http://sydneypeakoil.com/downloads/PR_APR06_Megaprojects.pdf Bookmark this, and track it over the years, and see how projects are going. Ian
  22. See, this is what pisses me off about the Tar Sands, Heavy Oil and so on. The Candians are actually producing, and I can see how they can get a couple of mmbl/day - assuming they can get the natural gas, of course. But if you can turn shale into oil for $20, then get together the capital and actually DO it. Show me a pilot plant. Show me production. Make it happen. Hippies actually do drive Kombi vans on used fish n chip oil - good on yers, ok it wont scale that far because we dont produce mmbls of used fish and chip oil, but it's a working model. This technique ? Go raise the cash, show me the capex and opex numbers for a working pilot and that will convince me. Ian Whitchurch
  23. In reply to: apache123 on Tuesday 18/07/06 09:34am Baz, I like his 20 June 2006 speech. Basically, the guy has a stock speech that gets updated. Ian
  24. In reply to: King Baz on Monday 17/07/06 01:24pm Baz, Thats what you want to do. I'm looking at this more from a 'Can Saudi sustain 10 mmbd' than from 'How much oil reserves do the Saudis have ?' point of view. Ian
  25. In reply to: King Baz on Monday 17/07/06 10:11am Baz, Matthew Simmons is also talking about peak gas in his latest couple of presentations. You might want to a look at www.simmonsco-intl.com ... Ian Whitchurch
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