Oil megaprojects

From Wikipedia, the free encyclopedia

Jump to: navigation, search


Oil megaprojects are large oil field projects to bring a significant amount of new oil production capacity to market. Tabulations of oil megaprojects are used to forecast whether future global oil supply will meet demand for oil, or whether the world will reach Peak Oil. As such, oil megaproject analysis is controversial. This approach to oil forecasting is also known as the "bottom-up" approach, in that it relies on building a detailed model of where and when new oil production capacity will come online.

In a series of studies reported in the media, the energy consultancy Cambridge Energy Research Associates (CERA) argued, beginning in May 2005, that oil production capacity would increase by as much as 16 million barrels per day (2,500,000 m³/d) between 2004 and 2010 - almost a 20% increase.[1] They suggested this might lead to an excess of supply over demand by as much as 7,500,000 barrels per day (1,192,000 m³/d), which could lower oil prices, perhaps below $40 per barrel.[2] In a July 2005 Op-Ed in the Washington Post, CERA President Daniel Yergin asserted that, based on the "large, unprecedented buildup of oil supply in the next few years", that "the growing production capacity will take the air out of the fear of imminent shortage."[3] Again in mid 2006, CERA concluded based on an analysis of 360 projects that global oil production capacity might increase to 110 million barrels per day (17,000,000 m³/d) by 2015.[4]

In contrast, a series of project tabulations and analyses by Chris Skrebowski, editor of Petroleum Review, have presented a more pessimistic picture of future oil supply. In a 2004 report,[5] based on an analysis of new projects over 100 thousand barrels/day (kbd), he argued that although ample supply might be available in the near-term, after 2007 "the volumes of new production for this period are well below likely requirements." By 2006,[6] although "the outlook for future supply appears somewhat brighter than even six months ago", nonetheless, if "all the factors reducing new capacity come into play, markets will remain tight and prices high. Only if new capacity flows into the system rather more rapidly than of late, will there be any chance of rebuilding spare capacity and softening prices."

Several issues, explained at greater length in this article, account for the differences. First, to the extent lists of projects are incomplete, erroneous conclusions may be drawn. Second, real world considerations such as project delays may cause inaccurate inferences from projects. Finally, in addition to tabulating new capacity, researchers and analysts must also model the decline of existing capacity, and differing assumptions about such decline will lead to differing conclusions. In addition to an overview of these issues, this article includes a detailed tabulation of projects (maintained by the Wikipedia Oil Megaprojects task force) which readers may use to draw their own conclusions about future oil supply.

Contents

[edit] Application to oil supply forecasting

The principle of Megaproject-based forecasting is simple: the analyst sums up the capacity of all the new projects coming on in a given year, and uses this total to assess whether oil supply will be adequate. However, a number of factors complicate this simple picture. First, and most importantly, the existing production capacity will change for various reasons even before the addition of the new capacity. The most significant reason for this is declines - the tendency of oil wells to gradually produce less oil over time as the field suffers from Oil depletion and water (typically) intrudes into the field. However, other factors are important too: some oil production capacity may be spare (deliberately unused), and variations in the amount of spare capacity can cause production to change without any new capacity being added to the market. Furthermore, accidents, natural disasters, wars, and revolutions can affect production of oil.

Additionally, projections of new capacity in the future are subject to uncertainty. Large oil production projects are complex and massive engineering projects often carried out in difficult places - in very deep water, in remote parts of the world, in very cold or very hot areas, or in areas subject to political or bureaucratic barriers to business activity. As such, they frequently get delayed or even cancelled. Even when projects are not cancelled, it is still typical that a new project does not reach full capacity on the first day after it comes on stream. Typically, a project reaches first oil when it first delivers any production to the market, then ramps up over a period of months or years until it reaches plateau at the capacity of the facilities to process oil. It stays on plateau for years to decades, and then begins a period of decline, before eventually being closed down permanently when it is no longer economic to produce the tiny available oil supply. Megaprojects are generally tabulated by when they reach first oil, but it is important to bear in mind that because of ramp-up, full production will not be reached for some time.

Any oil supply forecast based on megaproject capacity must, explicitly or implicitly, model these factors in order to translate capacity into production.

Number of oil fields discovered per decades grouped by average flow rates (left) and corresponding oil volumes (right) in giga-barrels (Gb). Data taken from the annexe B of "Twilight in the Desert" by Matthew Simmons[7].

The idea of tabulating the largest projects (Megaprojects) was historically justified because the observed oilfield size distribution is well described by a Parabolic fractal distribution,[8] [9] and thus the smallest fields, even in aggregate, do not contribute a large fraction of the total. For example, a relatively small number of giant and super-giant oilfields are providing almost half of the world production.[7] Therefore, it is generally convenient to gather information only on a few large projects and then model the depletion from the rest of the resource base composed of small oilfields. As time has gone on, however, Megaproject lists have tended to include smaller and smaller projects.

[edit] Decline rates

Main article: Oil depletion

The most important variable is the average decline rate for Fields in Production (FIP) which is difficult to assess.[10][11][12]

[edit] Introduction to the project tabulations

This article is accompanied by a series of tabulations of oil supply first coming on stream in each year from 2003 to 2020. These have been compiled by an exhaustive search of oil company annual reports and press releases. It is important to understand the methodology used in creating these tables, or in the summary graphs and tables presented in the present article. These include:

Significant is defined here as capable of producing at least 40,000 barrels of oil per day. This list of megaprojects completes this list of oil fields from the past and present. Maintaining an updated list of future oil projects is key to the forecasting of future oil supply, and assessing the date and seriousness of peak oil.

The detailed tables for each year can be accessed through these links, and are summarized below.

Overview 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

[edit] Existing databases

[13][14][15][16][17][18][19]

[edit] Oil megaproject summary

[edit] New Supply Addition per Country from Oil Megaprojects

Volumes shown are in thousand barrels per day. The summary table below is produced by a Perl script parsing each annual tables. This script is not run everyday so some discrepancies may appear (last update: 19-NOV-2008).


Country 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Total 3172 2747 3776 3845 3100 5117 4345 3660 3735 3259 2545 1820 1255 1095 162 180 50
OPEC
Total OPEC 957 1770 1175 1815 930 2465 2465 1745 2374 1440 1395 920 440
Algeria 70 80 50 100 50 190 40
Angola 90 250 325 425 430 240 130 335 395 525 140
Indonesia 40 200 20 50 70 25 125 80
Ecuador 52 30
Iran 95 85 190 150 200 570 115 95 255 210 530 240
Iraq 150 60 200 150 200
Kuwait 65 300 60 60 50 50 190
Libya 115 150 10 30 50
Nigeria 195 225 390 345 205 240 459 250 150
Qatar 70 45 130 180 80 505 280 170 135
Saudi Arabia 300 690 300 890 1150 670 365 300 330 250
UAE 90 290 20 210 75 200
Venezuela 180 70 75 200
Non-OPEC
Total Non-OPEC 2215 977 2601 2030 2170 2652 1880 1915 1361 1819 1150 900 815 1095 162 180 50
Australia 40 200 85 100 115 90 35 45 60 100
Azerbaijan 325 750 260 200
Brazil 70 250 300 340 640 375 200 460 280 200 380 300 100
Cameroon 20
Canada 255 90 45 260 100 215 125 300 185 350 210 245 162 180 50
Chad 225 60
China 62 100 165 200 20 200 80
Congo 90 30
East Timor 25
Egypt 40
Eq. Guinea 110 60
Gabon 20 10 20
Ghana 150 20
India 40 175 25
Italy 50
Ivory Coast 65
Kazakhstan 150 250 285 160 300 380 850
Malaysia 105 120 45 100 40
Mauritania 75
Mexico 730 310 173 51 74
New Zealand 40 25
Norway 389 176 45 120 150 100 190 85 125
Oman 40 155
Papua New Guinea 40
Peru 50
Philippines 15 15
Russia 380 250 80 155 570 310 415 360 15
South Africa 30 80
Sudan 250 285
Syria 30
Thailand 40 10 12
Trinidad 60
UK 40 30 60 305 25 50 75
USA 279 282 210 95 255 349 335 180 110 120 150 200
Vietnam 70 63 160 20
Yemen 25 30 30


[edit] References

  1. ^ "LIQUIDS CAPACITY SET TO CONTINUE EXPANSION TO 2010 AND BEYOND". 
  2. ^ "Capitalism's Amazing Resilience, Rich Karlgaard, Forbes, 11/1/04". 
  3. ^ "It's Not the End Of the Oil Age, Washington Post, 7/31/05". 
  4. ^ "Expansion Set to Continue: Global Liquids Capacity to 2015". 
  5. ^ "Oil field mega projects 2004". 
  6. ^ "Prices holding steady, despite massive planned capacity additions". 
  7. ^ a b Simmons, Matthew (2005). Twilight in the Desert. Wiley. pp. 448. ISBN 978-0-471-73876-3. http://www.twilightinthedesert.com/. 
  8. ^ Laherrère J.H. 1996 “Parabolic fractal” distributions in Nature, Comptes Rendus de l’Acad�mie des Sciences, S�rie II a: Sciences de la Terre et des Plan�tes, publi� t.322, S�rie IIa n�7, p.535 � 541, 4 Avril 1996
  9. ^ Laherrère J.H. 2000: [http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V9Y-40CJYNW-5&_user=10&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_version=1&_urlVersion=0&_userid=10&md5=7d1a5cd0045c0fa89461c0d56573398b "Distribution of field sizes in a Petroleum System: lognormal, parabolic fractal or stretched exponential?"] Marine and Petroleum Geology 17/4, April, p539-546
  10. ^ Lawrence Eagles (2006). "Medium Term Oil Market Report". OECD/International Transport Forum Roundtable.
  11. ^ John Gerdes (2007). "Modest Non-OPEC Supply Growth Underpins $60+ Oil Price". SunTrust Robinson Humphrey.
  12. ^ PETER M. JACKSON (2007). "Finding the Critical Numbers: What Are the Real Decline Rates for Global Oil Production?". CERA.
  13. ^ Skrebowski, Chris (2007-02). "New capacity fails to boost 2006 production" (PDF). Petroleum Review. http://www.odac-info.org/bulletin/documents/MegaProjects_Feb2007.pdf. 
  14. ^ Skrebowski, Chris (2006-04). "Prices holding steady, despite massive planned capacity additions" (PDF). Petroleum Review. http://www.odac-info.org/assessments/documents/Megaprojects_2006Apr.pdf. 
  15. ^ "Industry Projects". Offshore Technology. viewed December 5, 2007. http://www.offshore-technology.com/projects/. 
  16. ^ "Field Development Projects". RIGZONE. viewed December 5, 2007. http://www.rigzone.com/data/projects/project_list.asp. 
  17. ^ Gerdes, John (September 25, 2006). "Energy Insight" (PDF). SunTrust Robinson Humphrey (Gerdes Group). http://gerdes-group.com/energy-insight/WillOilPricesStabilizeat60-65dollarsperBarrel.pdf. 
  18. ^ Gerdes, John (February 6, 2007). "Energy Insight" (PDF). SunTrust Robinson Humphrey (Gerdes Group). http://gerdes-group.com/energy-insight/Non-OPECSupply20070206.pdf. 
  19. ^ "Oil Supply Analysis 2006-2007" (PDF). ASPO Netherlands Newsletter #5. October 2006. http://www.peakoil.nl/wp-content/uploads/2006/10/asponl_newsletter_5_2006.pdf. 

[edit] See also

[edit] External links

Personal tools