1 Denver World Oil Conference Denver World Oil Conference The Peak Oil Context The Peak Oil Context PETRIE PETRIE PARKMAN & Co. PARKMAN & Co. Thomas A. Petrie, CFA Thomas A. Petrie, CFA Chairman & CEO Chairman & CEO Petrie Parkman & Co. Petrie Parkman & Co. November 10, 2005 November 10, 2005
15
Embed
1 Denver World Oil Conference The Peak Oil Context PETRIE PARKMAN & Co. Thomas A. Petrie, CFA Chairman & CEO Petrie Parkman & Co. November 10, 2005.
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
1
Denver World Oil ConferenceDenver World Oil Conference
The Peak Oil ContextThe Peak Oil Context
PETRIEPETRIE PARKMAN & Co.PARKMAN & Co.
Thomas A. Petrie, CFAThomas A. Petrie, CFAChairman & CEOChairman & CEO
Petrie Parkman & Co. Petrie Parkman & Co.
November 10, 2005November 10, 2005
PETRIE PARKMAN & Co.2
World daily production: 84 million barrels/day
World excess capacity: 1-1.5 mmb/d (Refining capacity a determinant of “relevant capacity”)
US daily consumption: 21 mmb/day
Global annual decline rate: 4% - 6% / year?
Net Non-OPEC production likely to peak around 2010
OPEC nations may not reach governmental projections
Reasonable world peak oil date: 2010-2015?
Initial Perspectives and Assertions:Initial Perspectives and Assertions:Initial Perspectives and Assertions:Initial Perspectives and Assertions:
PETRIE PARKMAN & Co.3
84.782.6
80.578.5
76.574.6
84.7
80.5
76.4
72.6
69.0
65.5
84.7
77.9
71.7
66.0
60.7
55.855
60
65
70
75
80
85
2005 2006 2007 2008 2009 2010
8% Decline 5% Decline 2.5% Decline
Current World Production in Serious Decline Current World Production in Serious Decline
(Millions b/d)
-19.2
-28.9
-10.1
Conclusion: Depletion Matters
PETRIE PARKMAN & Co.4
End of Decade “Potential” New Production SourcesEnd of Decade “Potential” New Production Sources
Conclusion: Project Timing will be Critical
(millions b/d)
U.S. (Alaska / Deepwater GOM) 0.5 - 1.0South America 1.0 - 2.0West Africa 2.0 - 3.0Caspian Sea 1.5 - 3.0Russia 1.0 - 2.0Asia 1.5 - 3.0Canada 1.0 - 2.0Middle East 4.5 - 6.0Total 13.0 - 22.0
Conclusion: Ex the Optimistic Case, There Remains Limited Supply to Accommodate Economic GrowthConclusion: Ex the Optimistic Case, There Remains Limited Supply to Accommodate Economic Growth
(millions b/d)
Optimistic Case
2005 Production level 85Natural decline (10)
75
New Projects 2297
Net gain - 2010 12
85(19)66
2288
3
85(10)75
1388
3
Downside Case
85(19)66
1379
(6)
PETRIE PARKMAN & Co.6
0
10
20
30
40
50
1975 1980 1985 1990 1995 2000
MM
b/d
Excess Capacity
Production
Source: International Energy Agency
OPEC Excess Crude Production CapacityOPEC Excess Crude Production Capacity
?
Conclusion: Absent a Global Recession, the Margin for Error is Small
56 63 60 67 70 77 84
Global Demand (MMb/d)
PETRIE PARKMAN & Co.7
Maturing of Non-OPEC ProductionMaturing of Non-OPEC ProductionMaturing of Non-OPEC ProductionMaturing of Non-OPEC Production
In Decline:• United States• United Kingdom• Egypt• Pakistan• Congo• Norway• Australia • Oman• Columbia• Argentina• Gabon• New Zealand• Syria• Peru• Tunisia
At Plateau:• Mexico• Brunei• Malaysia• China• India (?)• Denmark• Yemen • Canada (conventional and non-Arctic only)
Conclusion: Ex Caspian Sea, West Africa, and Unconventional and Arctic North American Sources, Non-OPEC Production Probably is Close to Irreversible
Decline
PETRIE PARKMAN & Co.8
Discoveries precede extraction; a peaking in discoveries precedes a peaking in production
World oil discoveries peaked in 1964
In fields, basins, “provinces,” and the world: we tend to find the biggest oil structures early on
Today, we find 1 barrel for every 3-4 consumed This concept is not disputed Technology hasn’t changed this reality
PETRIE PARKMAN & Co.9
We found the most oil during the 1960s; production follows discoveries; technology hasn’t helped much