World Oil R&W pp. 46-57 Adelman, Ross, Krane, Downs Link to syllabus Link to WDI World Production of Oil U.S. Oil Production, Consumption, Imports Sources of U.S. Oil, 1973-99: (DOE) Oil Production and Exports, 2005 3.1 World Petroleum Supply and Disposition, 2005 (Thousand Barrels per Day) Crude Crude Oil Oil Oil Oil Region/Country Production Exports Production Exports Canada 3,092 1,360 Iraq 1,889 1,432 United States8,322 32 Kuwait 2,672 1,642 Mexico 3,784 2,022 Qatar 1,111 933 Venezuela 2,867 1,571 Saudi Arabia 11,096 7,690 Norway 2,978 2,339 United Arab2,845 Emirates 2,315 United Kingdom 1,861 987 Algeria 2,091 1,430 Kazakhstan 1,337 1,147 Angola 1,261 1,220 Russia 9,511 5,222 Libya 1,721 1,351 Iran 4,239 2,574 Nigeria 2,631 2,428 World Total 84,579 44,321 Changes in Net Exports of Oil 1997-2004 (1,000 b/d) Petroleum Increase Decrease Net Exporters Russia Net Importers 3,077 Brazil 573 Saudi A. Iraq Algeria Mexico Qatar 717 861 458 285 271 Japan 473 Indonesia U.K. -707 -676 USA China -2,925 -2,592 Venezuela -466 India Source: Calculated using BP data. -707 Change in Net Exports of Natural Gas, 1997-2004 converted to oil equivalent, in thousand barrels/day Net Exporters Increase Decrease Norway 740 Qatar 454 Trinidad 433 Canada 243 Mexico -221 Net Importers S. Korea Source: Calculated from BP Statistical Review, 2005 -323 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 Data is obviously out of date.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 Sands And 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$ Iran-Iraq War Fall of Shah Embargo 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 Saudi Arabia Egypt Algeria United Arab Emirates 0.18 0.28 0.37 0.37 Canada Mexico India Brazil 0.85 0.85 1.05 1.19 0.40 Spain 1.29 Germany France Italy Korea, United Kingdom 1.63 1.63 1.67 1.70 United States 0.66 Poland 1.37 Netherlands 1.79 Russia Jordan 0.69 0.77 Japan Sweden 1.52 1.61 Norway 1.78 1.89 Source: WDI. The world price averaged about US$ 0.90/liter Costs of Production, (US$/barrel) 1960 “Unit costs of maintaining and expanding crude petroleum production in Middle East and other areas.” Middle East 0.15 United States 1.63 Venezuela 0.24 Canada 2.53 Far East 0.62 Posted prices in the Middle East were about $1.80; in US it was $3.28 Source: Issawi (1963) Economics of Middle Eastern Oil (p. 54) citing Chase Manhattan B Exploration and Development Costs Source: OECD/IEA: WEIO Time period is early 2000s Output/Well (barrels/day). 2003 Output/day # WellsQ/well Canada Mexico USA Brazil Venez. U.K. Russia Algeria Libya 1,652 55.9 30 3,789 3.1 1,209 5,777 520.3 11 1,496 8.9 169 2,230 11.6 193 2,065 1.0 2,001 8,426 119.0 71 1,560 1.4 1,114 1,420 1.5 925 Output/day # WellsQ/well Nigeria Iran Kuwait Oman Qatar Saudi A. Abu Dhabi China Indonesia 2,180 3,780 1,870 821 892 8,480 1,925 3,130 1,150 2.7 1.4 1.0 2.6 0.6 1.8 1.3 82.4 8.3 Source: World Oil Sept 2004. Output and #wells in thousands. 823 2,671 1,968 322 1,581 4,764 1,481 38 139 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) Joined OPEC Algeria Angola Ecuador Iran Iraq Kuwait Libya Nigeria Qatar Saudi A U.A.E. Venezuela Population Production (millions) (mn brl/day) 1969 2007 2007 1960 1960 1960 1962 1971 1961 1960 1967 1960 Total Former Members Gabon Indonesia 37.4 18.1 15.2 78.9 31.1 2.6 5.6 170.1 2.0 26.5 5.3 28.0 2.13 1.94 0.49 4.17 3.20 2.49 2.21 2.21 1.21 8.80 2.80 2.47 33.27 Left OPEC 1994 2009 OPEC Members (formed 1960) OPEC Secretary General Abdalla Salem El-Badri Libyan, born 1940. Bus Ad. Degree from Florida Southern U. First professional job was with Esso (Exxon/Mobil) c.v. OPEC Countries: Crude Oil Production (1,000 b/d) OPEC Countries: Crude Oil Saudi Arabia 12,000 8,000 Iran 4,000 0 1970 1980 Iraq 1990 2000 2010 Iran Iraq Kuwait Libya Nigeria Saudi Arabia U.A.E. Venezuela 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 other OPEC 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 Syrian Claim Lebanon’s Claim Disputed betwe Lebanon & Isra Israeli Claim Egyptian Claim Palestinian Claim Source: Antreasyan Journal of Palestine Studies Spring, 2013 Green is Oil, Red is Gas Europe & Russia: Petroleum Economist 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 Oil 2002 Oil and Gas in South-East Asia 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 the ocean floor, then another mile or two. Off-shore Petroleum Drilling, Brazil Source: Gail Tverberg (2008) Peak Oil Science Curriculum Demand Consumption: Barrels/day/1000 population Canada 64 Mexico 19 USA 70 Brazil 13 Belgium 58 France 34 Italy 34 Germany 36 Netherlands 51 Sweden 41 Switzerland 38 Turkey 10 United Kingdom31 Russia 17 Iran 20 Israel 41 Kuwait 117 Saudi Arabia 64 U.A.E. 123 Egypt 9 Australia 46 China 3 India 2 Indonesia 5 Japan 46 Korea, S. 49 Highest levels in Gulf countries, (not US and western Europe) Oil Import Dependence for Some OECD Countries for the Year Country/Region Oil Consumption Net Oil ImportsNet Oil Imports as a (Million Barrels per(Million Day) Barrels per Day) % of Oil Consumption Net Oil Importers United States France Germany Italy Spain Sweden Switzerland Turkey Japan South Korea OECD total OECD Europe 20.034 2.060 2.677 1.874 1.544 0.346 0.259 0.653 5.578 2.168 41.113 15.502 11.238 1.865 2.544 1.671 1.506 0.384 0.255 0.607 5.501 2.256 31.508 8.651 56.1% 90.5% 95.0% 89.2% 97.5% 111.0% 98.5% 93.0% 98.6% 104.1% 76.6% 55.8% United States: Petroleum Supply Annual 2003 Others: 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 25 20 15 mpg 10 5 0 1950 1960 1970 1980 1990 2000 Source: Statistical Abstract of the United States, 2012 Table 2.8 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 Oil majors in MENA – pre-1975 Source: Bamberg (2000) British Petroleum and Global Oil 1950-1975 Major Oil Companies’ Shares of World Reserves, 1971 Other 37% Then was 63% IOCs now have ~20% of world reserves Source: Bamberg (2000) British Petroleum and Global Oil 1950-1975 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 1995 Non-OECD International Oil Companies, 1995, 2005 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 marke 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 Comparison of USGS Scenarios in 1994, 2000 USGS Historical 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. Plateau Decline 1000 1.00 900 0.90 800 0.80 700 0.70 Daily Production 600 0.60 Cum Production/Cum Rese rv es 500 0.50 2002 1998 1994 1990 0.00 1986 0 1982 0.10 1978 100 1974 0.20 1970 200 1966 0.30 1962 300 1958 0.40 1954 400 1950 Daily Production (mbopd) Growth Cum Production/Cum Reserves Egypt – A Typical Life Cycle for an Oil Producing Country 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 North Sea Production Profiles Prudhoe In the background is the important fact that no new giant oilfields have been found for decades. Russia Source: Simmons, Twilight in the Desert 2005. 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 Mexico Brunei Malaysia China India Denmark Canada Yemen Pakistan Congo Oman Norway Australia Colombia UK Argentina Gabon New_Zeal Syria PNG Egypt Other_Eur Cameroon Dem Rep Peru Tunisia USA Countries in the plateau phase Countries in the decline phase Duration of Plateau 2004 2002 2000 1998 1996 1994 1992 1990 1988 1986 Onset of Decline 1984 1982 1980 1978 1976 1974 1972 1970 1968 1966 1964 1962 1960 Onset of 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 U.S. Oil Well Productivity 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 1,566 2,680 3,638 4,561 4,332 231 653 720 665 207 Venezuela 0 0 0 0 0 Iraq 0 0 0 0 0 Indonesia 0 0 0 0 0 1,797 3,332 4,358 5,226 4,539 Reliable Nigeria Total 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 Units are Quadrillion BTU Source: US DoE Shale oil and shale gas resources are globally abundant