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Oil Supply/ Peak oil not till 2025


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Hi Guys,


Ian my own table which led me to flee from the peak oil camp is out of date.


Best one of new projects coming on line .... just the big ones ...





About coal to liquid and oil shale ect ect.


Very much the same process as tar sands but the energy loss increases from burning 20% to extract tar sands to 25% for Oil shale to 30% for coal to liquid.


Not about to suggest these happen overnight .... but since they have crossed the Tar sands already and basically thorn Kyoto out the window with Canada's development of them ... for me its only a matter of time.


Next is Venuzala's tar sands

Then US oil shale

China already has small coal to liquid plants and plans to expand them ....


Please dont get me wrong ... Oil will remain tight and the oversupply will be less than 6 % of demand as time goes on which will keep it bid.


However ignoring the supply side and easing supply side is what the market does in times of boom.


As for the other metals ... the capacity increases coming are scary. Everyone has been brainwashed because oil is in short supply ... and will be for ever more .... so too will be the case for everything when in reality for the likes of copper even allowing for a 50% increase know commercial grade deposits at US$1.00 total over 50 years of projected demand. Uranium the same ... Nickel and Zinc same ....


Will not stop them rallying the price even more whilst its in short supply vs the demand curve .... but with 30% more supply coming in 4 years good luck. Same story for most others.


I did note a company tht has been trying to get funding for many many years a gold company .... has finally got it. How many new gold miners is Australia alone going to breed from this spike ? I started counting and got lost at 25 ....

Even the gold bugs ... with 25 projects producing 100k ounces a year ... hmm its only a 30% increase in production.


Maybe I am totally wrong on everything ....


But don't you find it idiotic the peak oil theory was just that prior to 2004 ... now everyone has become brainwashed about it happeneing in metals from copper to zinc to gold and so on.


Not so long ago it was the Iron ore boom ... and scarce was what one was led to believe ... funny thing .... 5% of the planet is made up of none other than Iron ore.


All bets are off if Iran invaded but I rate that at less than 0.1% chance.


Agree with the gent about coal ... eventually we will go down that road ... its a matter of a shortage of energy overall .... but coal is by no means in short supply and its reserves top the 100 year mark before we ven look at brown coal which is near the same.


As for analyists ... who do they work for ? Not suggesting some conspiracy theory but they work for investment banks or brokers .... the more you trade the more they earn.

One thing analyists rarely do correctly is call the future direction of things.

If it isn't happening ... its not counted .... in the case of tar sands if you believ the oil price over US$70- will not increase efforts in that direction fine.


If one was to believe the US will not look very hard at the oil shale side in the next year or so .... given the threat Iran poses ... well it might be instrumental to note it was the US who in 2004 added oil reserves to Canada which were in fact larger than the total of IRaq or Iran .... they decided to include the Tar sands as oil reserves for their official numbers.

Also it must be noted last year they added Venuzaula's tar sands to it .....


I shall watch with interest the numbers they produce for 2006 .... in regards to inclusions of oil shale.


Bottom line still like or love oilers .... but they are the top end with spot price up here and frankly will need a nuclear bomb to get them much higher ... hence I shall wait for the eventual correction back to sanity ... but basically trading oil stocks off the spot price and suspect we drift eventually back into the US$55-65 range.


Long live Kyoto :}






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Hi Ian


No problems. I can't find the information readily.


The point of the original table is that 10 of the top 20 fields are already in decline. Some of the "unknown" ones listed may be. The 20th oil field produced 1 million bopd. Therefore new ones coming on line producing 250 - 400,000 bopd don't go that far. Sure several small to medium size deposits may equate to one of the large ones, but you need an awful large number of small to medium fields to replace 10 of the top 20 fields.


Even the experts don't agree on when peak oil is likely to occur, so it is probably an intellecual argument only as to whether we have crossed that boundary or otherwise. If we are not there, we are close.

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In reply to: tradem on Tuesday 02/05/06 06:56pm



Samotlor doesnt do anything close to 1mmbd these days. I'd be surprised if they still did 560 000 bopd.




BTW, I'm really enjoying this. You rock. You should be working in an office with white-suited waiters and painters by Arthur Boyd on the wall, earning seven-figure salaries with eight-figure bonuses when you get it right. My personal 'who do I trust' list has Matt Simmons, the Peoples Daily and Kahuna on it.


OK, the Skrebowski article is where we start.


Me, I'd like to amend the table by adding "known declines" - we stick a line on the bottom with "Cantarell (200)", another with "Burgan (250)" and so on.


That would rock, as we could balance known production increases with known declines and actually add some facts to the argument.


BTW, my gut is also saying that we'll go back to $55-65 oil, assuming George W doesnt do somethign amazingly f!cking stupid with Iran ...


I'd also argue that the Saudis were able to hold oil prices when they had a cushion of 2 mmbd in their own right, an other cushions of 2 mmbd existed in other places. We dont have them now, which is why it stays north of USD50.


And if you can't make money as an oiler at USD50, you really, really need to find another line of work.


Ian Whitchurch

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In reply to: ian_whitchurch on Tuesday 02/05/06 07:23pm

Hi Ian ...


Blushing mate.


Wish it were that easy.


Markets overdo things .... still looking for some pullback from here .... to get back in the oilers.


Suppose ROC at the top of my list ....

HDR ... but ahead of itself like WPL.


Take care

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In reply to: kahuna1 on Tuesday 02/05/06 08:28pm

Very interesting debate guys, well done.


Ian thanks for the links they are very informative.


Kahuna, I am not sure I understand why you say supply is likely to outstrip demand? The article you posted states


In 2004, effectively all the world's spare capacity was used up in meeting unexpectedly rapid demand growth. It is not at all clear if the world's oil companies can provide an incremental 3mn-plus b/d from all the small, untabulated projects and infill drilling going forward year after year. The world has now reached the point where the volumes lost to depletion are much larger than the levels of likely new demand. This means total increments requred (new demand plus depletion) are running at around 7%/y, while the largest supply increments in 2006 and 2007 are contributing 3.6% and 3.5%.
It would seem most unlikely that small projects and infill drilling could account for the remaining required 3.5%. The inescapable conclusion is that oil prices will have to remain high enough to destroy demand, bringing supply and demand back into balance.


And if you look at the numbers it states that 16.65 mmbopd of new capacity comes on line, yet 22.2 mmbopd will be lost to 2010 due to depletion, meaning demand will be well and truly exceeding supply.


Obviously all these numbers are estimates and need to be taken with a grain of salt (or ten), but I am just curious as to why you believe the supply side will increase by more than this. Maybe I am missing something.


For the record I think we are very close to peak oil - how close, we wont know for some time, since you can only tell these things in hind sight.




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In reply to: kahuna1 on Tuesday 02/05/06 08:28pm

Suppose ROC at the top of my list .... HDR ... but ahead of itself like WPL


What do u think of AWE?

Theyr gonna be experience some hard-core earnings growth from 2006 and 2007

Look how many projects they have coming on-line this year and next year...

And the best part - brokers use long term us$25 for price of oil long term in their forecasts!

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I have no issue with US$55 barrel oil on a current demand / supply basis.


My personal viewpoint is that with the issue with the Iranian nuclear issue, riots in Nigeria, problems in Chad, Bolivia (purportedly) nationalizing its gas fields , insurgents blowing up pipelines in Iraq, hurricane season approaching in the USA, and generally traders bidding up commodities it is more likely that there will be upside pressure on the oil price rather than downside pressure near term. If it does spike to say $100, it is far more likely that oil will then retrace down to a figure of $75 than $55 as the market will accept US$75 as being reasonable as the comparison point is US$100.


It would only take one more issue (say a terrorist attack in Saudi Arabia) to act as a tipping point. I get the sense that the market is looking for an excuse to bid oil higher. Maybe its all sentiment driven and there is no logic behind the move on a demand / supply basis. But thatÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s the market. It works on sentiment.


I would much rather be long oil at the moment and ride any corrections. Just a viewpoint. http://www.sharescene.com/html/emoticons/smile.gif

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