World Oil Link to syllabus Link to WDI R&W pp. 46-57 Adelman, Ross, Krane, Downs
Dec 23, 2015
World Oil
Link to syllabus
Link to WDI
R&W pp. 46-57
Adelman, Ross, Krane, Downs
U.S. Oil Production, Consumption, Imports
Source: U.S. DoE
World Productionof Oil
Sources of U.S. Oil, 1973-99: (DOE)
Oil Production and Exports, 20053.1 World Petroleum Supply and Disposition, 2005(Thousand Barrels per Day)
Crude Crude Oil Oil Oil Oil
Region/CountryProductionExports ProductionExportsCanada 3,092 1,360 Iraq 1,889 1,432United States8,322 32 Kuwait 2,672 1,642Mexico 3,784 2,022 Qatar 1,111 933Venezuela 2,867 1,571 Saudi Arabia11,096 7,690Norway 2,978 2,339 United Arab Emirates2,845 2,315United Kingdom1,861 987 Algeria 2,091 1,430Kazakhstan 1,337 1,147 Angola 1,261 1,220Russia 9,511 5,222 Libya 1,721 1,351Iran 4,239 2,574 Nigeria 2,631 2,428
World Total84,579 44,321
Source: US DoE
Changes in Net Exports of Oil 1997-2004 (1,000 b/d)
Petroleum Net Exporters Net Importers
Increase Russia 3,077 Brazil 573
Saudi A. 717 Japan 473Iraq 861
Algeria 458
Mexico 285
Qatar 271
Decrease Indonesia -707 USA -2,925U.K. -676 China -2,592
Venezuela -466 India -707
Source: Calculated using BP data.
Change in Net Exports of Natural Gas, 1997-2004 converted to oil equivalent, in thousand barrels/day
Net Exporters Net Importers
Increase Norway 740
Qatar 454
Trinidad 433
Canada 243
Decrease Mexico -221 S. Korea -323
Source: Calculated from BP Statistical Review, 2005
Shale oil and shale gas resources are globally abundant
June 10, 2013
World Reserves
Proved oil reserves at end 2003
Source: BP. Data is obviously out of date.
Canadian Oil SandsAnd the Country with the Second Greatest Proved Oil Reserves Worldwide Is . . . Six months ago, “Iraq” was the correct completion of the above phrase. Its 112.5 billion barrels of proved oil reserves was second only to Saudi Arabia’s imposing 259.3 billion barrels. However, in the December 23, 2002, issue of the Oil & Gas Journal, proved oil reserves in Canada catapulted from an estimated 4.9 billion barrels in 2002 to an amazing 180 billion barrels in 2003. How was this possible? A methodology change by the Oil & Gas Journal now includes western Canada’s oil sands in its definition of proved oil reserves. Heretofore, oil sands were considered “nonconventional” and were not counted as proved oil reserves; however, dramatic reductions in development and production costs have brought oil sands into the realm of economic viability. With today’s technologies and oil prices, it is entirely appropriate to consider western Canada’s vast oil potential as being commensurate with “conventional” crude oils.a
Source: US DoE http://www.eia.doe.gov/oiaf/ieo/oiltext_box.html
PRICES
Real and nominal prices
Lots of the U.S. price goes to taxes; about half goes to production
Cost of production in MENA is quite low
Dramatic differences in output/well
Fig. 3.3 p. 52 (R&W). Crude Oil Real Prices, 2004 US$
Embargo
Fall ofShah
Iran-IraqWar
New Supplies,World Recession
Iraq-Kuwait
Asian Crisis
Nominal and Real Oil Prices, 1860-2010
Source: BP: Statistical Review of World Energy, 2011
U.S. Breakdown of the price of gasoline at the pump
Price of Gasoline/World Price 2000-08
Iran 0.18 Canada 0.85 Germany 1.63Saudi Arabia 0.28 Mexico 0.85 France 1.63Egypt 0.37 India 1.05 Italy 1.67
Algeria 0.37 Brazil 1.19 Korea, 1.70United Arab Emirates 0.40 Spain 1.29
United Kingdom 1.78
United States 0.66 Poland 1.37 Netherlands 1.79
Russia 0.69 Japan 1.52 Norway 1.89Jordan 0.77 Sweden 1.61
Source: WDI. The world price averaged about US$ 0.90/liter
Costs of Production, (US$/barrel) 1960
Middle East 0.15United States 1.63Venezuela 0.24Canada 2.53Far East 0.62
“Unit costs of maintaining and expanding crude petroleum production in Middle East and other areas.”
Source: Issawi (1963) Economics of Middle Eastern Oil (p. 54) citing Chase Manhattan Bank
Posted prices in the Middle East were about $1.80; in US it was $3.28
Exploration and Development Costs
Source: OECD/IEA: WEIO Time period is early 2000s
Output/Well (barrels/day). 2003
Output/day# WellsQ/well Output/day# WellsQ/well
Canada 1,652 55.9 30 Nigeria 2,180 2.7 823Mexico 3,789 3.1 1,209 Iran 3,780 1.4 2,671USA 5,777 520.3 11 Kuwait 1,870 1.0 1,968Brazil 1,496 8.9 169 Oman 821 2.6 322Venez. 2,230 11.6 193 Qatar 892 0.6 1,581U.K. 2,065 1.0 2,001 Saudi A. 8,480 1.8 4,764Russia 8,426 119.0 71 Abu Dhabi 1,925 1.3 1,481Algeria 1,560 1.4 1,114 China 3,130 82.4 38Libya 1,420 1.5 925 Indonesia 1,150 8.3 139
Source: World Oil Sept 2004. Output and #wells in thousands.
Surplus Capacity - OPEC
OPEC Spare Production Capacity, 2011, 2003
Source: Energy Economist.com
Opec Capacity Utilization Rates
Source: Shihad-Eldin (2004) Oil Output and Investment Prospects
U.S. Strategic Petroleum Reserve (in days)
Source: U.S. D.o.E.
Joined Population ProductionOPEC (millions) (mn brl/day)
Algeria 1969 37.4 2.13Angola 2007 18.1 1.94Ecuador 2007 15.2 0.49Iran 1960 78.9 4.17Iraq 1960 31.1 3.20Kuwait 1960 2.6 2.49Libya 1962 5.6 2.21Nigeria 1971 170.1 2.21Qatar 1961 2.0 1.21Saudi A 1960 26.5 8.80U.A.E. 1967 5.3 2.80Venezuela 1960 28.0 2.47
Total 33.27
Former Members Left OPECGabon 1994Indonesia 2009
OPEC Members
(formed 1960)
OPEC
Secretary General Abdalla Salem El-BadriLibyan, born 1940. Bus Ad. Degree from Florida Southern U.First professional job was with Esso (Exxon/Mobil)
c.v.
OPEC Countries: Crude OilOPEC Countries: Crude Oil Production
(1,000 b/d)
0
4,000
8,000
12,000
1970 1980 1990 2000 2010
Iran
Iraq
Kuwait
Libya
Nigeria
Saudi Arabia
U.A.E.
Venezuela
Iran
Iraq
Saudi Arabia
Saudi oil minister rules out output hike
Friday, April 11, 2008 Compiled by Daily Star staff Saudi Oil Minister Ali Naimi said on Thursday that there were not enough buyers of oil to justify an increase in oil production, despite high prices, and he added that fossil fuels should supply the bulk of global energy needs for at least the next 50 years. Naimi also slammed biofuels, saying they did not protect the environment or help supply security, but added that solar power had to be considered one of the best clean-energy sources. Speaking outside an international oil conference in Paris as the price of oil hovers at near-record levels, he said there were not enough buyers of oil in the market to absorb extra output.Asking where the buyers were, he said that if more buyers emerged, then "we" would sell. But there were no such buyers, he argued.
Refiner Acquisition Cost, 1996-2002
It used to be said that OPEC has a target price range.mt prefers a description that Saudis are price setters, and otherOPEC countries accept that price, without significant production Changes..
Non-OPEC Production
Soviet Oil Production
Russian Oil Production, 1994-
Oil Corridor
Gulf Oil
Source: Longrigg (1967) Oil in the Middle East p. 493
Mediterranean Gas Finds
Source: Antreasyan Journal of Palestine Studies Spring, 2013
Egyptian ClaimPalestinian Claim
IsraeliClaim
Lebanon’sClaim
Disputed betweenLebanon & Israel
SyrianClaim
Europe & Russia: Petroleum EconomistGreen is Oil,Red is Gas
New Energy Pipelines for Europe
Source: Der Spiegel online, March 14, 2010
Oil & Gas: MENA & North Africa. Petroleum Economist
Green is Oil,Red is Gas
Africa Oil. Source: World Oil 2002
North Sea Oil
Source: World Oil2002
Oil and Gas in South-East Asia
Source: World Oil 1984
Mexican Oil
Source: World Oil, 1984
Colombia and Venezuela Oil
Source: World Oil, 2002
Brazil: Off-shore oil. Campos Basin
Source:World Oil
One mile to theocean floor,then anothermile or two.
Off-shore Petroleum Drilling, Brazil
Source: Gail Tverberg (2008) Peak Oil Science Curriculum
Demand
Consumption: Barrels/day/1000 populationCanada 64 Russia 17Mexico 19 Iran 20USA 70 Israel 41Brazil 13 Kuwait 117Belgium 58 Saudi Arabia 64France 34 U.A.E. 123Italy 34 Egypt 9Germany 36 Australia 46Netherlands 51 China 3Sweden 41 India 2Switzerland 38 Indonesia 5Turkey 10 Japan 46United Kingdom31 Korea, S. 49
Source: US DoE consumption; population from IFS
Highest levels in Gulf countries, (not US and western Europe)
Oil Import Dependence for Some OECD Countries for the Year 2003
Country/RegionOil Consumption Net Oil ImportsNet Oil Imports as a(Million Barrels per Day)(Million Barrels per Day)% of Oil Consumption
Net Oil ImportersUnited States 20.034 11.238 56.1%France 2.060 1.865 90.5%Germany 2.677 2.544 95.0%Italy 1.874 1.671 89.2%Spain 1.544 1.506 97.5%Sweden 0.346 0.384 111.0%Switzerland 0.259 0.255 98.5%Turkey 0.653 0.607 93.0%Japan 5.578 5.501 98.6%South Korea 2.168 2.256 104.1%OECD total 41.113 31.508 76.6%OECD Europe 15.502 8.651 55.8%
United States: Petroleum Supply Annual 2003Others: International Energy Agency, Monthly Data Service, February 10, 2005
Energy Consumption in the US 1776-2012
World Energy Intensity, by Region (DOE)
(US?) Energy Consumption per Person (DoE)
U.S. Energy Consumption per $
U.S. D.o.E.
US Automobile Mileage, miles/gallon
Source: Statistical Abstract of the United States, 2012 Table 2.8
1950
1954
1958
1962
1966
1970
1974
1978
1982
1986
1990
1994
1998
2002
2006
0
5
10
15
20
25
mpg
Multinationals
International Oil Companies (IOCs)
vs.
National Oil Companies
TNOC and OPEC Host State Shares of Crude Oil Production
The decade of the 1970s saw major changes
Source: Lax (1988) States and Companies: Political Risks in the International Oil Industry
Oil & Gas Industry Structure
Source: Smith (2003) “Investment from an IOC perspective” OPEC Review Sept. 2003
Oil majors in MENA – pre-1975
Source: Bamberg (2000) British Petroleum and Global Oil 1950-1975
Major Oil Companies’ Shares of World Reserves, 1971
Source: Bamberg (2000) British Petroleum and Global Oil 1950-1975
Other 37% Then was 63%
IOCs nowhave ~20%of worldreserves
Share of Foreign Companies in the Oil and Gas Production of major Producing
Countries
Source: UNCTAD World Investment Report, 2007
Twenty largest Oil Companies, 2007
Source: Smith (2009) World Oil: Market or Mayhem? JEP
Non-OECD International Oil
Companies, 1995, 2005
1995
2005
Source: UNCTAD World Investment Report, 2007
Oil and Gas Production of IOCs outside their home country
World Production of Oil and Gas, by Types of Companies
Production by OECD TNCs is mostly in other countries. Emerging market TNCs are catching up, especially NOCs like Petrobras and CCOOM.
Source: UNCTAD, World Investment Report 2007
Technology
Examples of High Tech in Petroleum Exploration
Deep Water Production: North Sea
Aramco3 New Technology
Brazil Oil: Oil Rig Disaster, early 2001
Brazilian Oil Find, 3 miles down (NYT Jan, 2008)
A Minimum of History
Pennsylvania oil
Source: Danielsen (1982) The Evolution of OPEC page 76
Deconstruction, and re-construction, of Standard Oil
Source:
Exhaustible Resource?
World Oil Discoveries and Production, 1915-1995
Source: Mitchell et al. (2001) The New Economy of Oil page 52
USGS Historical
Comparison of USGS Scenarios in 1994, 2000
Adelman World Production and Reserves
He argues that reserves are growing faster than production.
OPEC supply curves
Source: Adelman (1995) The genie out of the bottle page 26
Hubbert Curve
One half of the lifetime of production in this reservoir.
Egypt – A Typical Life Cycle for an Oil Producing Country
0
100
200
300
400
500
600
700
800
900
1000
19
50
19
54
19
58
19
62
19
66
19
70
19
74
19
78
19
82
19
86
19
90
19
94
19
98
20
02
Da
ily
Pro
du
cti
on
(m
bo
pd
)
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
Cu
m P
rod
uc
tio
n/C
um
Re
ser
ve
s
D aily Produ ction
C um Pro duction/Cum Rese rv es
Once large discoveries are no longer made and production rates increase, depletion levels (percentage of oil discovered that has been produced) accelerate – this depletion history has been mapped for every major oil and most minor producing countries
Growth Plateau Decline
Source: Rogers
Production Profiles
In the background isthe important fact that no new giantoilfields have been found for decades.
Source: Simmons,Twilight in the Desert2005.
North Sea
Prudhoe
Russia
North Seas Oilfield Decline Rates
Source: IEA (2003) World Energy Investment Outlook pp. 142, 143
Non-OPEC Countries That Are Either in Decline or Currently in a Plateau
The above bars show the onset and duration of documented production peaks or plateaus – tracking country life cycle shows an acceleration of the number of countries passing from peak to decline
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
USA Tunisia
PeruDem Rep
CameroonOther_Eur
EgyptPNG
SyriaNew_Zeal
GabonArgentina
UKColombiaAustralia
NorwayOmanCongo
PakistanYemen
CanadaDenmark
IndiaChina
MalaysiaBrunei
Mexico
Countries in the decline phase
Countries in the plateau phase
Onset of Plateau
Duration of Plateau
Onset of Decline
Source: Rogers ()
U.S. Oil Well Productivity
Source: U.S. D.o.E.
Caspian Sea Pipelines
Gulf Oil – Source: World Oil August 2002
OPEC Oil Production & Surplus Capacity (early 2005)
Source: US DoE
Middle East Energy and Freshwater
Middle East Oil & Pipelines (1960s)
Source: Longrigg (1967) Oil in the Middle East pp. 490-91
Pipelines (1960s)
Source: Longrigg (1967)Oil in the Middle East p. 492
OPEC’s Excess Capacity, 2002-2005
Map of Russia
Former USSR -- World Oil, August 2002
OPEC Spare Crude Capacity (1,000 b/d)
('000 b/d) 2005 2006 2007 2008 2010
Saudi Arabia 1,473 2,032 2,673 3,456 3,218
Angola NA NA 0 47 343
Kuwait 0 128 222 300 294
Qatar 2 28 17 55 136
Libya 30 17 34 72 40
Algeria 21 10 3 3 103
UAE 21 267 252 339 42
Iran 15 143 316 148 40
Reliable 1,566 2,680 3,638 4,561 4,332
Nigeria 231 653 720 665 207
Venezuela 0 0 0 0 0
Iraq 0 0 0 0 0
Indonesia 0 0 0 0 0
Total 1,797 3,332 4,358 5,226 4,539
Source: Oil Market Intelligence
OPEC Surplus Capacity (1,000 b/d)
Sources: Energy Intelligence Group
World Excess Capacity
Source: US DoE, EIA
Average Miles/Gallon. U.S.
US Energy Consumption, 1650-2000
Source: US DoE
Units are Quadrillion BTU
Shale oil and shale gas resources are globally abundant