Hit reddit (EVEN IF IT STILL SAYS SUBMIT), hit digg, hit your favorite link farm! (de.icio.us, metafilter, stumbleupon, slashdot, etc.)

Phil asked me to post this:

The Khursaniyah link above does not work because the Saudi Aramco website uses Session IDs. For details on Khursaniyah and other projects, choose 'Media Center' then 'News' and then 'Megaprojects':

http://www.saudiaramco.com

In the last few days, there has been good discussion about Saudi's performance in 2006. If I hadn't already written my article, I might have toned down the language I used. Robert is of course correct that Haradh III started-up early in the year - it was officially opened on the 22nd March. They acknowledge a ramp-up period but I would still have expected to see impact on total production earlier than July. However, it would only have taken one or two significant process or equipment faults to push significant production back a few months. Without quality information we just don't know what actually happened.

I'm a big fan of Robert's posts here, his reliance on solid data and that he forces us to consider alternative explanations for what we observe. Without such critical analysis, the strength of the discussion would be much lower. I also agree that organisations making official submissions about peak oil need to present the risk of an early peak but also the uncertainty that peak 'might' be several years away.

However, I don't think TOD falls in that category. We do not control the official position of the public peak oil figures and the well funded anti-peak oil folks will always be able to use media to support their view, regardless of what we say. The Oil Drum doesn't need to convince everybody to adopt exactly the same position. Instead, TOD does a great job of informing people with quality articles and through discussion amongst people with diverse points of view.

I come here to read the best technical, quantitative and qualitative analysis available anywhere. I come here to keep up-to-date on how Westexas, Khebab, Robert, Stuart and everybody else are reading the latest numbers. Having absorbed all the information and different points of view, I'm then in the best possible position to prepare what I present to audiences at home. So far that has included investment fund managers, the local branch of the Society of Petroleum Engineers, principal research officers for the Senate Inquiry into Australia's future oil supply and several community events. I couldn't do it without The Oil Drum!

I'll join the discussion when I wake up in Melbourne, which will be about 4pm EST...

Phil,

Good work.

Given how old Ghawar is, I assume that you agree that the field is almost certainly in decline. Assuming that this is the case, every field that is or was producing one mbpd or more is now in decline.

As you know, one can define Peak Oil as the point at which smaller fields coming on line can't offset the declines from the older, larger fields. I think that we hit that point in 2005.

I expect to see continued production declines in Saudi Arabia, perhaps with some temporary bumps upward in production as some new production comes on line.

I think that David Shields is right that Cantarell will probably decline at about 500,000 bpd per year, which will have a catastrophic effect on Mexico's production.

I think that the other big risk for declining production is Russia.

And of course, IMO, oil exports will fall much faster than overall production declines.

imo, total liquids should be corrected down to account for ethanol's reduced btu's... the slight upward tilt would become a slight downward one, with last year's total reduced around 300k/d.

Looking at the jul/aug surge, and as noted, everybody and their dog in and out of opec was producing every barrel possible as prices surged ever higher. Well, some would except SA, thinking/hoping they were holding back in the face of record prices...

SA needs new projects to hold the decline to 8%, otherwise would be 12%. (SA is not completely opaque, having put out the 12% figure as the top of a range themselves, and further acknowledging production is already down to 8.5Mb/d.) So, with no new projects until end 07 earliest, hard to see sa not declining 1Mb/d this year, and mexico looks to go down another 500k/d, together soaking up every barrel of the hoped for 600k/d net new capacity. imo there just might be enough new projects in 07 to maintain the 05/6/7 plateau, but 2008 is another story...

A few comments:

1) Norway's Petroleum Directorate is forecasting 8% decline year over year (-200 kbbl/d), yet you only assume 4% (100 kbbl/d). Any particular reason why?

2) I question the assumption of Brazil as the "shining knight" in this analysis. If we look at Brazil's history, here is what we see over the past 2 years:

Production Jan. 1, 2005: 1498 kbbl/d
Additions (volumes per Skrebowsi; confirmed via press release):
2005 Barracuda: +150 kbbl/d
2005 Caratinga: +150 kbbl/d
2006 Alabacora Leste +180 kbbl/d
2006 Golfinho I +100 kbbl/d
2006 Jubarte +60 kbbl/d

Forecast production 12/06: 2138 kbbl/d
Actual production 12/06: 1787 kbbl/d

Implied decline: -351 kbbl/d (12% per year)

History tells us two things with Brazil: (1) Projects will always be delayed, and (2) Declines are enormous. If the 12% decline rate holds, and Brazil's +610 kbbl/d comes in on average at mid-year (yearly gain +300 kbbl/d), the net gain would be around 100 kbbl/d, or about 1880 kbbl/d exit 2007 production.

3) Similar criticism for Angola:
Production Jan. 1, 2005: 1100 kbbl/d
Additions (volumes per Skrebowsi; confirmed via press release):
2005 Kizomba B: +250 kbbl/d
2005 Bambacoo: +100 kbbl/d
2006 Dalia +240 kbbl/d

Forecast production 12/06: 1690 kbbl/d
Actual production 12/06: 1477 kbbl/d

Implied decline: -222 kbbl/d (10% per year)

Again, assuming 10% decline holds I would expect Angola to exit 2007 at about 1580 kbbl/d for the year, again assuming projects come online in the middle of the year.

The history of these deepwater countries suggests they must be treated very differently from onshore countries - the implied levels of decline in the 10-12% range simply will chew up the bulk of new projects....

Interesting NEWS from PEMEX. Source is from my news feed (no url available):

DJ Mexico Pemex Plans 2 New Deep-Water Exploratory Wells In 2006
MEXICO CITY (Dow Jones)--Mexican state oil monopoly Petroleos Mexicanos, or Pemex, plans to drill two new exploratory wells in deep water this year, a company official said. Carlos Morales, head of Pemex's exploration and production division, said in a conference call with analysts that the wells will be drilled in the deep-water area called Coatzacoalcos Profundo. Based on seismic studies, Pemex says there could be 10 billion barrels of crude equivalent in Coatzacoalcos Profundo, out of a potential 29.5 billion barrels of crude equivalent in
all of Mexico's deep-water territories.
Pemex began exploring the Coatzacoalcos Profundo area in 2004, although Morales said Tuesday that the company doesn't expect to be producing oil from deep water before 2014.
Deep water is seen as one of the long-term solutions to replace dwindling output from the giant offshore Cantarell oilfield. Pemex recently expanded a colaboration agreement with Brazilian state oil company Petroleo Brasileiro, or Petrobras (PBR), which has a lot of experience and know-how in deep-water drilling. Mexico's energy laws don't allow Pemex to form joint-ventures to exploit oil and gas reserves with private or foreign companies, however.
Among current projects to substitute Cantarell production is Ku-Maloob-Zaap, where Morales said crude output this month has reached 500,000 barrels a day.
Output at Cantarell fell to 1.79 million barrels a day in 2006 from more than 2 million barrels a day in 2005, and is expected to average 1.53 million barrels a day this year.
Pemex's overall crude production last year was 3.26 million barrels a day, compared with 3.33 million barrels a day in 2005. Output so far this year is 3.18 million barrels a day,
Morales said.
Of Pemex's $14 billion investment budget for this year, $12.3 billion is for exploration and production, including about $1.5 billion for exploration.
-By Anthony Harrup, Dow Jones Newswires; (5255) 5080 3450; anthony.harrup@dowjones.com
(END) Dow Jones Newswires
March 06, 2007 12:52 ET (17:52 GMT)
Copyright (c) 2007 Dow Jones & Company, Inc.

Good alternative number crunching Phil, I too feel there is another way of looking and judging peak oil other than "oil production" numbers. I look at the PW volumes being dealt with. And another article from Aramco's site got most of my attention.

With the project's completion, the plant will have a treatment capacity of 14 million bpd, making QSWP the world's largest seawater treatment plant intended for oil
recovery.

Under megaprojects click on seawater.

regards;
Oilcanboyd

Regarding China, it seems like we have been seeing a number of comments recently to the effect that Chinese oil production likely peaked in 2006, and is expected to decline in 2007. One of these is from Spraxsis on February 19.

http://europe.theoildrum.com/node/2270#comment-161233

There is also one from Ace in the same thread.