Wikileaks Wish for Oil Data

This is a guest post by Mason Inman, known on The Oil Drum as Failing Gracefully. Mason writes, "I'm writing an article for a magazine about calls for greater transparency in oil data, and I thought it would be interesting to get the viewpoints of Oil Drum readers." Mason is a freelance journalist, currently based in Karachi, Pakistan.

If you could get any data about OPEC oil, what data would you most like to get? I started wondering about this question when I was reading the new thriller Garden of Betrayal by Lee Vance, a retired former partner at Goldman Sachs who was head of their energy trading for a number of years.

In the book (don't worry—I won't spoil the plot), an energy analyst named Mark Wallace working at a financial firm called Cobra gets a mysterious phone call from a woman asking him to meet at a cafe. When he arrives at the meeting place, the caller turns out to be incredibly sexy—and even better, she has an iPod full of secret data:

"What am I going to find on this?" [the narrator says].

"Reprocessed seismic, daily and life-to-date production figures by well, bottom-hole and wellhead pressures from drill date to present, saltwater injection volumes, current and historical produced mixture percentages, well rotation schedules, onsite GOSP capabilities, and some other stuff."

"For Ghawar?" I asked, stunned.

"For every oil field in Saudi Arabia."

(It's hard to escape the idea that Vance wished, during his career at Goldman Sachs, that something like this would happen to him.)

The narrator plugs the field-by-field data into a depletion model, and his computer grinds away for hours, and then spits out an answer should be familiar to many Oil Drum readers: Saudi oil production will likely take a nosedive starting very soon.

But should he trust the numbers? Who was the sexy woman who leaked the information? And what will happen when the world passes peak oil? The narrator spends the rest of the book trying to get the answers to these questions (and more).

"I found myself wondering what the world would look like in fifty years," the narrator says, early in the book. "It's not just global warming—everyone in the energy business knows there isn't anywhere near enough oil and gas in the world to meet long-term demand under any realistic economic scenario. It's a strangely obvious issue that doesn't get much play."

It made me wonder: What would be the most useful data would be to get a hold of, if we wanted to get a better idea of what is happening with Saudi oil. Daniel Ellsberg of Pentagon Papers fame published a "Wikileaks wish list" in the Washington Post a couple of months ago. The Washington Post "asked Ellsberg for his wish list of documents to be leaked, declassified or otherwise made public, documents that could fundamentally alter public understanding of key national security issues and foreign policy debates."

So in the same vein, I'd like to hear Oil Drum readers' "Wikileaks wish lists"—for OPEC, or for any kind of oil-related data that would shed light into today's dim recesses. I'm writing a magazine article on arguments for greater transparency in the oil industry, particularly for OPEC countries, so I'm very interested in getting Oil Drum readers' input.

(Disclaimer: Making oil-related data public is a serious crime in many countries, so I'm not actually advocating anyone to break a law and leak something that might get them in trouble. I'd much rather see more information on oil become public through government and industry decisions that it's better for everyone if things are more transparent.)

One of the speakers at the recent ASPO-USA convention made the point that if we ask countries for their forecasts (for example, by field), the information may be as distorted as everything else we get from OPEC countries.

So we need to be careful that what we ask for is likely to be helpful.

One of the big issues is at what price, a type of advanced recovery option for a field is economic. It seems like for a particular field, there are various price thresholds--above say $150 barrel, it may be possible to use advanced EOR and get an almost unlimited amount out (slowly). It may be possible to get a lesser amount out if the price is $90 barrel, and other techniques are used. And a third amount may be possible if the price is $40 barrel, and only the simplest techniques are used.

Gail, exactly what type of EOR are you talking about? I know of nothing that can get an "almost" unlimited amount of oil out.

I hear all this talk about EOR but no one ever explains what they are really talking about. Do you mean C02 injection? Lots of talk about that but I have seen nothing explaining exactly where the C02 will come from or how it will be delivered or how much it will cost. If I had to guess I would guess that the amount of extra oil now being recovered because of C02 injection would be near zero.

Then what other EOR methods are there that will get an "almost" unlimited oil from the reservoir?

Ron P.

Good point.

"However, hidden in the cost portion of CO2 project expenditure is the total up-front expense of securing, supply and delivery of CO2. This total cost must therefore also be absorbed until incremental production occurs"

from here

Sounds good but as usual the devil is in the details :-)

Gail - I have to agree with Ron about containing optimism over EOR gains. But they don't have to be ignored either. Before the economic value of any EOR is estimated you have to have an accurate reservoir model of the field. Even then you have to take the results with a grain of sand. As far as analyzing the future decline profile under current conditions nothing matches the accuracy of production histories of the field wells IMHO. The geologists and reservoir engineers can map any field in as much detail as they like, but they are still left with the need for major assumptions concerning sweep efficiency, porosity/water saturation distribution, etc. Plotting the distribution of water cut changes across a field is one of the most telling analysis. Likewise reservoir pressure changes can be very telling. Such curves change very slowly and are typically quit uniform. The effect of water flooding and horizontal redevelopment readily show up in such analysis. The EOR models can offer estimates which the reality of the situation can trash in a heart. Once saw a very logical water flood model for a field in south Texas. The injection of over 500,000 bbls of water yielded an increase in production of 600 bbls of oil. Not 600 bopd...600 bbls total. Needless to say Mother nature didn't care what the model predicted.

As long as we accept the limitation of EOR models I think they can be added to the estimate. But before anyone can offer any value to EOR you have to have the base case tied down very well. And it's this base that we desperately need from the KSA. The raw data would include tens of thousands of data sets. But the analysis would be rather fundamental and take only a several dozen man-years to work up IMHO. But I also believe pigs will be flying in the KSA before such data is ever made available. This is why I give little credibility to any EOR claims made: if we can't project the future production curve of the existing system how can we project any enhancement of the same.

DOE says CO2-EOR 'scrubs' about 15% of additional oil following waterflood. So if the US URR is 200 Gb then CO2-EOR is only 30Gb hardly a silver bullet as we cram 7 Gb/yr into our energy pie hole.

EOR is well-established technology. It is expensive and complex and DOES need to be subsidized as does all future production.
This wouldn't be such an issue if you got an additional cost covering >$10 per barrel for burying some power plant's CO2.
Average people will have to pay for the new system just as they are paying for the banksters.
There is no way the US can energy-conserve its way off fossil fuels(85% of US energy).
The way things are going CO2 EOR isn't going to happen without a carbon tax. More energy intensive steam floods won't happen if gas prices skyrocket. It's a failure of energy markets where prices trump planning.
Alernatively we could nationalize the US energy system(call it US Hydrocarbon Corp.) where DOE would invest in EOR but the free-market system is perfectly capable of leaving the oil in the ground undeveloped.

The oil industry is really CRIMINALLY responsible for leading the US public and politicians down the primrose path and warning them off Peak Oil.
Big Oil consultant CERA said the US had 76 Gb of US EOR oil and 500 Gb of oil shale as 84% of future US oil resources.
If industry refuses to develop them then those aren't resources and people need to look for energy elsewhere than oil.

Thanks for perspective on water EOR.
How practical is CO2 EOR vs cost of CO2/oil?

I found this at DOE.

The presence of an oil bearing transition zone beneath the traditionally defined base (oil-water contact) of an oil reservoir is well established. What is now clear, and as recently documented in a series of DOE Office of Fossil Energy reports, is that, under certain geologic and hydrodynamic conditions, an additional residual oil zone (ROZ) exists below this transition zone, and this resource could add another 100 billion barrels of oil resource in place in the United States, and an estimated 20 billion barrels could be recoverable with state-of-the-art CO2-EOR technologies.

(I said 30 Gb above).
50% of US EOR oil production of 0.5 mbpd is CO2 injection.
US domestic oil production is 5.5 mbpd. Obviously it is already cost effective, pratical where it exists now but we will need to subsidize it to make it really popular.

I personally have no problem subsidizing some kinds of oil production

I personally would prefer to see an import tax on oil. That will make the EOR and other domestic production techniques more viable, and also has the major benefit of making imports less viable, so the oil co's will spend their exploration $ here in preference to elsewhere.

It will also benefit, equally and without "choosing", all alternative fuels - ethanol, methanol, alage, CNG, electricity, etc.

And, of course, by making the price of oil fuels higher, it will decrease wasteful consumption.

So we would have our own version of "import land", where we decrease imports faster than we decrease consumption, because local production, and local use of alternatives is rising.

At that point, who cares what Saudi etc is doing or saying, or not saying, if we are becoming less reliant on them, not more.

maj- I have a few problems with the DOE's proclamation. The first is anecdotal: I've seen CO2 floods tried on several water flooded reservoirs and all were non-commercial efforts. Secondly the vast majority of oil fields in the US have no viable access to CO2. So it doesn't really matter how much residual oil is left in US fields if CO2 can't be shipped to the majority of them. Thirdly, most fields that have access to CO2 and can gain profitably from the effort have had CO2 injected into them for decades. And that recoverable oil in the transition zone? No problem: don't even need to do CO2...just keeping pumping that oil and the hundreds of billions bbls of water that will come out with the oil. Granted the cost of disposing that water will be greater than the value of the oil produced but, hey, this is the govt so profitability isn't a factor.

If the govt wants to subsidize EOR and produce oil at a cost greater than its market value then they should have at it. Better yet, lets borrow the money from the Chinese to do it. Then they can use our interest payments to buy up more of the oil resources around the world. FYI: the last time I checked the numbers the interest payment China recieves from the US pays for all of China's oil imports and then some.

If you "melt" very heavy oil deposits, you can get a lot of oil out, but very slowly, and quite expensively. You obviously need something to burn to generate the heat, and you need to do something with the oil after you melt it (upgrade it?), so that it is not so viscous and can be shipped more easily.

There is a lot of this stuff around, not just in Canada and Venezuela, but in the US and the Middle East. So other people looking at this say we have no problem. But we do, if it is slow, expensive, and requires inputs that may not be available. There are folks working on techniques for getting such materials out--burning part of it in place, to generate heat, for example. I have seen other methods as well.

Unless we can show that this stuff is not really available in practice, it makes it hard to make a case that future oil supplies are limited.

By "melt" do you mean huff and puff? That's a technique that's been around forever, having been extensively used in California since the 1950s, for example. Also around Lake Maracaibo, and I see from that article that it was actually accidentally discovered by Shell in Venezuela when a steamflood operation broke down and the well subsequently produced more than expected.

Gail, your logics is okay, but:
1st: It is far from sure if the world economy (i.e. its oil consumers) - as fragile as it is currently - can bear an oil price of per barrel any time soon.
2nd: "Almost unlimited amount" sound as if you got an acute infection of cornucopianism ;-) In fact EOR is no mirracle tool that will boost production as soon as the $150 threshhold is reached - it is already being applied, but as we know it doesn't help enough to turn the downward trend. For example Platts has described that EOR is being applied increasingly on the US mainland, but didn't manage to turn the downward trend.
3rd: Of course this will be a different story at an oil price of $1500, as this would facilitate to get and synthesize fuel from Saturn's moon Titan. But we shouldn't expect this to happen in the real world, which we have to cope with now.


I am in complete agreement with you on the small probability that the world economy can bear a high oil price. I think the issue is the same, both now when the economy seems fragile, and later, because the issue is that the EROI of some of these processes is so low that it results in a very high price that is only possible in theory, not in practice.

As I mentioned above, one of the approaches I am thinking of is "melting" very heavy oil deposits, by steam flood or another approach. This is being done in Kern River, California, with very good (but slow) recovery. According to one slide provided by Chevron, recovery rates were as follows:

It is very similar to the approaches being used on the bitumen in Canada, which also have very high recovery rates. If it could be used in Venezuela and other places with very heavy oil deposits (including Texas), it could theoretically produce high recoveries. The catches are (1) the front end costs would be high, (2) something would need to be burned to generate the heat (making the EROI low), and (3) extraction would be very slow, unless an absolutely huge amount of this were done.

I understand that melting can theoretically even be done where oil is only moderately heavy, and some extraction has already been done by conventional means. But the high costs and other issues keep it from being done now.

Among the most telling numbers would be the true costs of oil production in the oil fields of OPEC countries - and its trends during the last few years. Because this can tell us how far OPEC is able to lower the oil price during the next economical downturn (which many expect ahead). If the true costs are close to the current oil price then things are getting really tough.
This is important as even the IEA now says that the only countries that still are able to increase oil production are OPEC members, so no one else could help to bring prices down.

In fact I don't believe the claims from e.g. Saudi Arabia still has production costs as low as US$ 2. Considering the remote locations and the huge efforts for the new production facilities I think that costs have become much higher than before.

A few months ago I read a remark from an insider in Iraq saying that oil production costs have risen five-fold during the last few years (this might explain this country's difficulties to rise production). Unfortunately he didn't tell any more numbers.

I don't think that any estimates of future costs would help, as these could be biased, too. So only current or historical cost balances would help. But of course these data are probably confidential and certainly extremely hard to get.

Dont the financial flows tell you the same thing. I.e if the variable cost of production (as opposed to the true marginal cost of new production) in a given country is equal to the market price, other than weird distortions etc..., the oil sector (countries) should not be receiving cash form the rest of the economy/world (other than in the form of capital flows perchance which should be subtractable).

And with regards to this question you already have your answer, when oil prices go up the profit surplus accruing to the major export states is still very large and it grows by and large proportionately. I think the more relevant question is heuristic.

Why is the variable cost of production so low but the marginal cost of production so high? Isnt that an admission of serious geophysical constraints?

By the way, the conventional economist answer to this question is "bottlenecks yes, geophysical bottlenecks no". I think the great insight Peak Oil has is "bottlenecks yes, because of geophysical bottlenecks".

But I assure you, if world crude demand fell to 65 million barrels the price could fall a long, long way.

Disclaimer: Making oil-related data public is a serious crime in many countries, so...

That statement alone tells you a lot more than most people realize. Why is the data so secret. One reason, among several reasons I am sure, is so that the countries own people will not know how much oil is left. Some in Kuwait, when the International Petroleum Monthly released their findings that Kuwait had less than half their claimed reserves, demanded that production be dropped to one percent of reserves.

But wishing will get us nowhere. All we can do is watch the data. And OPEC's Monthly Oil Market Report came out yesterday and I plot the data carefully. Most OPEC countries are producing flat out and most of those are in decline. And of the other three countries that may have a little spare capacity, Saudi Arabia, Kuwait and the UAE all seem to be struggling to keep production at current levels. Abu Dhabi just announced that they have managed to get the Mubadale field output up by 50,000 bpd, year over year. Looks like they are trying to produce every barrel possible.

Ron P.

I had a look at Google labs Saudi GDP per capita and they are not crying poverty, so I guess that their margins are good.

I would just like to see the actual monthy production numbers (present and historical) for the top individual fields for a start. Could you send that to me in an Excel file? I would love to make a plot.

I'm sure WHT and all the number crunchers will laugh at my silly little example, but I once bet a casual friend who ran a diner where I ate lunch every day at the time that I could accurately estimate his lunch hour gross simply by watching the cashier for a few minutes a day for a week.

I got close enough that his jaw dropped by simply watching the totals flashed by the old fashioned cash register for five minutes at a time and multiplying by an estimate of hour many minutes the register was actually being used per lunch hour.Got a free lunch out of it.

My point is that there simply must be hundreds if not thousands of people privy to the data needed-if not in total, at least in respect to a large enough samples to make very meaningful estimates.

A number of these people must be contracted hands on or professional workers from other countries, and a number of them must be disaffected locals with an axe to grind.

I find it almost inconcievable that given the importance of this data that LOTS OF PEOPLE , such as say the CIA or some of thier professional fellows, haven't managed to get hold of ENOUGH of it to know the score.

Remember that when the game is spying, success is defined not only by getting the data but also keeping the getting of it a secret.The mark of a truly good con man never realizes he has been skinned;a really good con man can skin the same mark two or thre times over a period of years as his skin grows back.

I should think that it would not be very hard, in principle , for somebody who knows the oil business intimitely, to derive very good data simply from studying the sales figures of the sort of specialized machinery used in managing declining oil fields;most of this stuff has to be moving in international trade, and most of it is manufactured in countries outside OPEC.

I guess my point is that we probably don't even need any data not already in our hands to make excellent predictions;more data would obviously be helpful in fine tuning mitigation strategies, and doubtless very useful to oil traders.

But as to whether such data would be taken seriously by the general public, I have my doubts.

It looks as if the tpt used to be figured out the situation and went for the military option;given the cards in thier hands at the time, this was to be expected.

The powers that are now are desperately hoping that the military option has worked well enough to scale it back at least temporarily and bring home some troops.But it most certainly has not been abandoned, and it won't be.

Not until it can't be managed physically in terms of men and marterials at least.

As Hiesenberg said recently in response to my making this same comment a few days back , it will work until it doesn't work anymore.

To which I must reply,"exactly".

But it may buy us another decade or so of something vaguely resembling our "nonnegotiable lifestyle";and that decade might make some difference in terms of ramping up renewables and adjusting our expectations.

"a really good con man can skin the same mark two or three times over a period of years as his skin grows back."

Yeah Mac. This fits well with this article linked to by eric blair, in today's Drumbeat:

From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression — and they're about to do it again.

Hi Ghung,

I cannot overemphasize how important it is that everybody take time to read this link.

Unfortunately the con man of the modern historical era aka an investment banker is now morphed into a potentially immortal Frankenstienian monster(to do the real McCoy a real disservice, for a guy built out of scraps and spares he was pretty decent morally) so thoroughly dug into our society that the only apt comparision I can think of is a slowly growing tumor that is going to eventually weaken its host to the point it will succumb to some stressful event;said tumor already being so big that even the thought of attempting to remove it scares the entire "medical"establishment silly.

Agree completely OFM.

You can't explain it in 30 seconds, so politicians ignore it.

The most telling (and true) line in the Rolling Stone article.

BTW. Any opinions here regarding that article's analysis of why oil went to $147.00 / bbl? (Goldman etc. secretly being allowed to play in the commodities markets)? Pretty hard to claim that the reporters got everything else right, which they did, except that bit.

Hi Lengould,

I am wondering myself about ust how big a role speculation played in the speed and severity of the run up in oil prices.

I am now giving more wieght to speculation as part of the answer, but I still believe that fundamentals were mostly responsible.

When the supply of a must have good or service suddenly comes up short, prices can shoot up that fast in the real world.

It happens in agricultural markets , usually to a lesser degree, quite frequently.Crashes are just as common;we can hardly give away our apples this year.

The IEA, in the World Energy Outlook 2009, has this to say about speculation and the spike in oil prices (on page 65): "The extent to which speculative financial flows into and out of futures markets contributed to the swings in prices remains a topic of animated discussion, but it is reasonable to conclude that those flows may well have played a part in amplifying the impact of shifting fundamentals on prices, both upwards and downwards. Yet recent analyses have been unable to prove a direct price-making role for non-commercial operators on futures exchanges (IEA, 2009a)."

(By "fundamentals," the IEA doesn't mean peak oil, since they don't think that is here yet. I believe their reading of events is that spare capacity got tight, and no one could boost capacity fast enough.)

If the Rolling Stone article is right, then Goldman Sachs looks for opportunities for they can take advantage of—they are often late to the game, it says. But they have the reputation and connections that allows them to take advantage of these opportunities, to tweak the rules somewhat—and most importantly, to avoid getting prosecuted for it.

I don't think they created the bubble, but they may have made it grow bigger, and faster, than it would have otherwise. Same with the housing situation. They didn't completely create the lax regulation of banking, which had been getting gradually worse and worse for at least 20 years. But when the time was right, they jumped on it.

My point is that there simply must be hundreds if not thousands of people privy to the data needed-if not in total, at least in respect to a large enough samples to make very meaningful estimates....A number of these people must be contracted hands on or professional workers from other countries.....I find it almost inconcievable that given the importance of this data that LOTS OF PEOPLE , such as say the CIA or some of thier professional fellows, haven't managed to get hold of ENOUGH of it to know the score....Remember that when the game is spying, success is defined not only by getting the data but also keeping the getting of it a would not be very hard.....for somebody who knows the oil business intimitely, to derive very good data simply from studying the sales figures of the sort of specialized machinery used in managing declining oil fields;most of this stuff has to be moving in international trade, and most of it is manufactured in countries outside OPEC.

I think you are totally right. From what I've heard of ARAMCO, for example, most the actual work is done by expats. If Matt Simmons could figure out as much as he did just from pulling together scattered SPE papers, a concerted effort by the CIA should be able to get essentially the whole story.

However, the CIA isn't likely to share that data with us. I sense a business opportunity for the private sector. How about a joint venture between Rockman Inc & Blackwater devoted to NOC oilpatch spying? ;-)

The CIA might leak the information to some people, if it serves their purposes. But would they leak the actual data, or a tweaked version of the data?

For a scenario like this, check out the book I mentioned in the main post, Garden of Betrayal.

If you want to see a good mini-series on this premise, check out Burn Up. It pretty much deals exclusively with peak oil going mainstream and climate change.

Most likely some part of the US intelligence apparatus, and the intelligence bodies of other major countries, have reasonable good estimates of oil reserves based on analysis of public information supplemented by information intercepts and human intelligence. Of course the "error bars" on these estimates may be pretty wide, since the accuracy of exploration and estimation may vary, the estimates of "economic" recovery may vary depending on technological and financial assumptions, and the data may be the product of disinformaiton campaigns.

The highest political levels probably know what the estimates are. They are probably quite concerned, but various factions have differing views as to what actions to take. The straightforward promotion of "energy independence" doesn't have political traction with the electorate. Scaring the electorate by somewhat overblown propaganda regarding anthropogenic global warmin hasn't worked very well, even when the finance crowd is enticed with the prospect of making a bundle from "cap and trade".

TPTB are still working out how to proceed.

I don't see anything wrong with this approach. I am certainly not a number cruncher in the traditional sense. All I use are indirect methods. Obviously all the petroleum engineers and professional geologists (at least here on TOD) scoff at my approach, but it is more than likely that they feel some sort of embarrassment that a real "forensic" exercise as OFM describes could ever work. After all, they have been educated in the heuristics of the geology and never had a chance to learn anything outside that narrow window. Yesterday, one of the studs actually responded with this classic rationalization: "I think we have established that in the context of their work they have much more important things to do with their time."

Well, all I have is time and I think you can go far with the data we already have.

I guess my point is that we probably don't even need any data not already in our hands to make excellent predictions;more data would obviously be helpful in fine tuning mitigation strategies, and doubtless very useful to oil traders.

Exactly. I said essentially the same thing further down the thread, so have to agree completely with OFM on this. I always cry about getting better data, but end up using what I can get my hands on.

WHT, you've posted many graphs showing good agreement between known data and your models.

But I am still not convinced that your models have any predictive power.

So here's a challenge: How much oil is there in the Falklands? Another North Sea? Or far more modest.

Score to date: One flowing well @ 2000 bopd (Rockhopper), two dry (Desire; Falklands Oil & Gas).

"There are two areas being explored at the moment – the North and South Basins. Rockhopper [and Desire] made its discovery in the North, where the water is shallow at 100m-600m and the drilling conditions relatively benign. The South Basin, where fellow explorers Falkland Oil & Gas and Borders & Southern (LSE: BOR) are active, is another matter. The water is up to 1,200m deep and the drilling conditions far trickier."

A 1995 agreement between the UK and Argentina had set the terms for exploitation of offshore resources including oil reserves[65] as geological surveys had shown there might be up to 60 billion barrels (9.5 billion cubic metres) of oil under the sea bed surrounding the islands.[66] However, in 2007 Argentina unilaterally withdrew from the agreement.[67] In response, Falklands Oil and Gas Limited has signed an agreement with BHP Billiton to investigate the potential exploitation of oil reserves.[68] Climatic conditions of the southern seas mean that exploitation will be a difficult task, though economically viable, and the continuing sovereignty dispute with Argentina is hampering progress.[69] In February 2010, exploratory drilling for oil was begun by Desire Petroleum,[70] but the results from the first test well were disappointing.[71] Two months later, on 6 May 2010, Rockhopper Exploration announced that "it may have struck oil".[72] On Friday 17th September 2010 Rockhopper Exploration released news that a flow test of the Sea-Lion 1 discovery was a commercially viable find.[73]

17 September 2010

Rockhopper Exploration plc (AIM: RKH), the North Falkland Basin oil and gas exploration company, is pleased to report the successful test of well 14/10-2: “Sea Lion 1.”

Sea Lion 1 was drilled in a water depth of 451m during April and May 2010 and suspended for future testing, having encountered a gross oil column of 217m with net pay of 53m. Initial MDT samples were confirmed as medium grade crude oil of 26 .4 – 29.2 API gravity.

Sea Lion 1 was re-entered during September 2010 and was flowed for 18 hours. The well tested at sustained rates in excess of 2,000 barrels per day with a maximum rate of 2,304 barrels per day. The flow test results are in line with Rockhopper’s pre-test expectations and were significantly limited by downhole and surface equipment. The well produced no water, no H2S and negligible CO2. Downhole pressures were recorded and their analysis will inform the Company’s development scoping plans. A number of downhole and surface samples were collected and will be further analysed in the UK.

The test was carried out with limited equipment owing to the length of the logistics chain and timelines involved in securing such equipment. Rockhopper anticipates that the additional equipment that would be incorporated into any future test, when combined with a more optimal well location, would result in a significantly higher flow rate.

...We believe that Sea Lion is the largest fan sandstone body in the North Falkland Basin and, given this successful flow test, that the Sea Lion discovery will be commercially viable.”

16 October 2010

Desire's shares plunged 36pc to 70.6p as management admitted it had found sandstone but no oil in its Rachel prospect.

Desire has three more wells to drill using £23m raised from investors in September. It has now decided drill sideways at the Rachel prospect for another 20 days, pledging not to give up yet.

However, analysts from Oriel and Evolution were sceptical. "These targets look higher risk given the sands are likely to be worse quality and thinner in the deeper part of the basin," said Nick Copeman of Oriel.

"All these prospects look high risk following the failure of Rachel and our recommendation is under review."

Seymour Pierce, the oil explorer's house broker, was more upbeat, saying Desire's "portfolio of prospects is extensive and does offer potentially huge upside".

13 July 2010

Hopes that the oil explorer had discovered a major new field drove shares in Falkland Oil & Gas to a high of 244p last month. They closed down 106.5 on Monday at 101.5p.

The setback is the latest in a series that has dogged exploration around the Falkland Islands. Forecasts that the area around the islands could hold up to three billions barrels of oil have – to date – appeared to be wildly optimistic.

The warning from Falkland Oil & Gas came as the latest Aim-listed vehicle looking to exploit the Falkland oil rush announced plans to float. Argos Resources is understood to be looking to raise £70m. A spokesman for the company refused to answer questions.

Unlike rivals – including Rockhopper Exploration and Desire Petroleum – Falkland Oil & Gas was drilling to the south of the Falkland Islands.

Falkland Oil and Gas, the biggest shareholder in the unsuccessful Toroa well with a 49pc stake, attempted to put a positive gloss on the well results.

Tim Bushell, chief executive, believes they have "helped to reduce some of the key risks of the plays in the deep water areas of our licence".

They have significantly better predictive power than any other technique available.

The Falkland data would go into the global data and you go from there.

C'mon Web,don't wimp out! What is YOUR prediction for the Falklands? What is it before you put it "into the global data"?

I asked the same question about his reserve growth "solution". Turns out, not being required to know something about a topic prior to predicting it really interferes with...predicting it. Funny how statistics work that way...I wonder if I walked into a boardroom and announced the greatest predictive method of all time its reasonable someone might actually request I use it to predict something!

I think I want to be a statistician, as an engineer I've always been expected to actually provide results....worse yet...they better be reasonably close to right. This entire concept of just making stuff up and pretending it works strikes me as an absolutely wonderful way to never accomplish anything, while claiming you've accomplished everything! Gotta give them credit for dreaming up a sweet racket, even if they don't tend to get paid well.

You do not understand stochastic formulations.

I will leave it at that.

They have significantly better predictive power than any other technique available.

Still waiting for the demonstration of predictive power, as applied to the Falklands.

The Falkland data would go into the global data and you go from there..

OK, if it goes "into the global data", just pull it out from the global data and give us the number.

It's small. There you go.

Give me a number. Quantify.

Keep after him Alaska, the Emperor (statistician) has no clothes and this is exactly why. I KNOW EVERYTHING!!!! which works right up to the point where someone actually asks for an answer....and then silence....

No problem, keep after me.

So you can't do it?

Falkland Islands? Why should I? Just to prove something to you?

Because you can't.

Bring on the heuristic experts with actual answers!

A List Of Fallacious Arguments

Appeal To Anonymous Authority?
Appeal to Force?
Argument By Pigheadedness (Doggedness)? Repetition?
Argument by Rhetorical Question?
Argument By Selective Observation?
Argument by Small Numbers?

Burden of Proof
Common Sense
Moving The Goalposts

You should.

Read up on Bayes Theorem and how much small amounts of new information will affect the aggregate.

The question wasn't about the aggregate. And you said you had answers, so of course nobody assumed you were talking about hiding your answer in an aggregation to know....actually answering it?

And I can run Bayesian relative probabilities as well, butts thens I jus b 1 dumb enguneer and we all knows nun of us's can doo dats!

I should think that it would not be very hard, in principle , for somebody who knows the oil business intimitely, to derive very good data simply from studying the sales figures of the sort of specialized machinery used in managing declining oil fields;most of this stuff has to be moving in international trade, and most of it is manufactured in countries outside OPEC.

The sales figures and related information you ask about could come from many indirect sources (which are, of course not public information): international bank drafts, national Oil Company budget documents, Insurance records, resale ads and auctions, even workman's comp claims or lawsuits.

The problem is in getting enough of this type of information, vetting it's accuracy, and having known data sets to compare them against. And analysts who can figure out what they really mean.

So we need to eliminate the middleman.

Seems to me that the Major oil companies would gain competitive advantage by knowing this stuff, and would have a whole department of ex-CIA and MI-whatever spooks working on it full time, with lots of bribe money, competent analysts, and access to internal benchmarking data.

I want to see Esso, BP, or Shell's corporate espionage Department's most recent executive summary for the CEO of:
A. Country by country reserve estimates
B. Country by country immediate pumping capability
C. Country by country Aggregate depletion rates

Lower down the chain (for high level managers):
A. Field by Field life expectancy and current and projected ROI worldwide. (helpful for estimating the value of leases and the price of their development.)

I'm sure others with greater expertise could think of better fantasy documents that would help Master of the Universe type CEO's make decisions.


For reasons of combating drug money laundering and the War on Terror, all transactions over $10,000 are reported to Treasury.

In the past, all international transactions made over the SWIFT network were copied to servers in the US. Whether they were made available to Treasury or the CIA has never been confirmed.

I got close enough that his jaw dropped by simply watching the totals flashed by the old fashioned cash register for five minutes at a time and multiplying by an estimate of hour many minutes the register was actually being used per lunch hour.Got a free lunch out of it

For this process uniform probability distribution function maximizes entropy... and here you are. Sounds good, eh'

I find it almost inconcievable that given the importance of this data that LOTS OF PEOPLE , such as say the CIA or some of thier professional fellows, haven't managed to get hold of ENOUGH of it to know the score

I think that what your are describing actually happens at TOD. Nobody here breaks any rules or laws, but people come with their pieces of data/knowledge/understanding share it and in total we get a picture as good as anybody else.

I would like to be a fly on the wall somewhere in Saudi Arabia before they announced "leaving oil in the ground for future generations".

I think CC's got the hang of it -- how to reason with limited information.

Here is one that is probably different than a lot of the others . . .

I want the production costs in kilowatt-hour/dollar of all the various Lithium-Ion battery chemistries, their material costs, their labor costs, realistic projections for cost declines, the current contracts between battery makers & auto-makers, etc.

The Li-Ion battery costs are a closely guarded secret that is key for the electrification of transport. So many of pessimistic studies of EV economics are based upon an (outdated) value of $1000/KWH or higher. That value is way out of date and thus all those studies which continue to be cited are wrong and downright misleading people to false conclusions. I can buy prismatic Chinese LiFePO4 batteries (such as ThunderSky) for $350/KWH on the open market but well-tested automotive Li-Ions with battery management systems will cost more. But how much more? In a recent discussion at the Commonwealth Club, some EV manufacturers said that costs had dropped nearly in half from the $1000/KWH level and would drop further.

I think there will be a major historical shift as the price of oil goes up and the price of Li-Ions go down when the total ownership cost (including lifetime fuel costs) of driving an EV drops below the total ownership cost of driving a gas car. I believe that day is much closer than most people realize. In fact, like the peak oil date, that date may have already passed but we just don't know it yet.

This gasoline to EV cross-over date is even harder to determine than the peak oil date because it is dependent on things that happen after the date . . . things like the price of oil. For example, if a major oil crunch were to happen in 2012 or so driving gasoline to $10/gallon then an EV purchased today would have a lower lifetime operating cost than a gas car purchased today since that gas car will then need to be fed with that $10/gallon (and rising?) price of gasoline.

I've done some SWAGs that compare a Toyota Corolla to the Tesla Model S (somewhat comparable, recognizing that the S is not on the market) and the main takeaway is that operating costs exert relatively little influence on the equation compared to up front cost to purchase. Even if you assume $10/gallon gas and relatively little increase in the price of electricity (say it stays at 10 cents/kWh), your delta on operating costs is such that first cost can be no more than 10-15% higher. Plenty of devils in the details, obviously, but operating costs contribute distressingly little to the equation if you are hoping for a wholesale switchover.

But the toyota corolla and telsa are not equivalent type cars. I would compare a BMW type model to Telsa.

Telsa has no maintenance records either.

So that math is hard to do. It is like hovering over a crystal ball.

But why would an electric drive have more maintenance than a ICE, which has more parts that wear due to high heat and friction. No water pump or radiator, spark plugs, distributor, head, cylinders, etc etc in an electric drive.

There is the battery issue and the cost is the main concern for the battery.

Why not compare the Leaf to the toyota instead (although again you need maintenance records to do it right)?

I find way too many faults in your back-of-the-envelope calculation. But the main one is the one already noted by the previous poster . . . you can't compare the Tesla Model S which is targeted to be a high-end luxury car to a Toyota Corolla which is a typical economy car. If you want to run some more reasonable calculations, compared the Nissan Leaf which will be on the market shortly with a price of ~$33K before tax-credit and ~$25K after tax-credit with the Toyota Corolla. You'll find the results to be much different.

EVs cost around 1/5th the fuel prices of gas cars today . . . and that ratio will improve for EVs as gas prices continue to grow.

We had some spirited discussion on this over the last few days in the thread about the 1L per 100km challenge, and some numbers to compare the Leaf to a Corolla.

The upshot - assuming both cars a re financed on the same terms (7% interest) is that the Corolla wins, but not by that much.

If you are prepared to spend more money on a car to get luxuries that you like (leather seats, etc) then you will likely pay more for an EV, if you like the idea of an EV.

EV's will only be substantially cheaper when gasoline is substantially more expensive than it is today - say $4-5/gal. As long as it is under $4, it comes down to do you want an EV for the sake of it. Over $4, for a city commuter, it is definitely cheaper.
If you are prepared to have either a smaller car, or smaller driving range, then it gets cheaper again.

Given that the first passenger EV's aren't even on the road yet, I don;t think we can say that we have crossed over the point where they are cheaper - they are presently heavily subsidised, do not pay road tax on their fuel, and are getting "free" charging stations installed.
So the deck is quite stacked in their favour at present, but the subsidies and tax exemptions are unlikely to remain if EV's sell in any real volume.

Yeah . . . that is exactly what I'm talking about. But considering that we had $4/gallon gasoline two years ago, I would not call that 'substantially' more expensive. Things are pretty close to break even right now . . . just a little higher gas prices and a little lower battery costs and it is break-even.

But if they are close to break even, why go and make the change? If this was your business, you would be inclined to stay with the status quo until their is a real ROI, not just a break even. I work in water efficiency and see this all the time. IF the payback is not less than 5yrs on the change, forget it.

A transport business will take a longer view, but for them, electrics are no use either because of their limited range. That is why transport businessess are going hybrid, and we are seeing hydraulic hybrid systems for heavy trucks starting to appear.

I truly think it needs a "price shock" to spur action, and also for people to believe that prices will stay high, not come down again a year later.
$4 is what I think it needs, but I'm happy to be proven wrong for lower number.

Most people won't. This is just the start of a new industry. Maybe 20K electric cars will be sold in the USA next year along with some 9 million gas cars & hybrids. The people that change now do it for other reasons . . . eco-reasons, national security, a hedge against oil prices, interest in the technology, etc. Like all new technology, the first versions are for the early adopters not the mainstream.

$4/gallon will push a few more people but not very many, IMHO. It will take higher prices. But they will come.

But this is a marathon, not a sprint.

But the real trick is that no one really knows the ROI. If a serious peak oil panic were to occur as some of the doomsters here believe, a Nissan Leaf bought this year could end up being a seriously wise choice over a similar gas car. I doubt that is true. But I am certain that it is only a matter of time & increasing oil prices before EVs become very mainstream.

Spec, i am in agreement with you here. It seemed the primary reaction to $4gas last time was to get angry at the government, I hope the next time it creates some more productive reactions.

Much as a gas tax will never get accepted in the US, i think there is a lot of benefit to be had from it, if done correctly.
I think the import tax works even better, but in any case, my idea would be to set the tax, and keep adjusting it as necessary, so that the retail price is $5/gal. If oil goes over $150/bbl, the retail price would be over $5without any tax, so the tax could be zero at that point.

Effectively then, there is a floor price of $5 (and applied to all other oil fuels too). Not only does this provide the price signal, it gives certainty, so you can do your ROI calculations, without worrying about a price drop. Same applies to the non oil alternative fuel makers - a much better investment environment.

I think that would make the biggest possible difference to efficiency plans. At $5, the railroads would likely convert to CNG, and maybe even electrify. For city drivers, EV's look good. For distance drivers, diesels look good. For drivers of PU's and SUV's, anything else looks good.
And for people contemplating transit, or relocation closer to work, they can do their sums. Finally, for cities contemplating building transit, they will have much more support for doing so, and part of the oil tax to use for the purpose.

To me, the fixed price oil tax (or import duty) is the ultimate case of the bad tasting medicine to relieve the cold. Without it, we will keep on sniffling and hope that we just get better.

Fair points, but I was asking myself a slightly different question: how far down in price would an EV have to fall to be competitive with a mass-market car, given the fuel cost savings from using electricity. The Model S is just a proxy for an EV with similar functionality to a mass market car(I did not take the Leaf into account, that would make sense). In any event, my answer was: the purchase price would have to fall disappointingly close to parity.

As to the question you were driving at, I think you will find that if gasoline goes to $10/gallon, the price of batteries will climb as well, and price parity will still be hard to achieve. If it is not true of the batteries themselves, it certainly will be the case with many of the advanced materials that go into an EV.

I don't think batteries will drop in price to be competitive with gasoline as priced now. I'd love to be proved wrong, but I don't see that happening.

And I agree there is the 'receding horizon' problem wherein the price of oil is hidden within everything such the price of everything rises when oil rises. However, it is only a small fraction of everything. Even gasoline does not follow a 1-to-1 ratio with the price of oil. There are other costs in the gasoline such as the transportation, the refining cost, the retail cut, the taxes, etc. So, yes, the receding horizon problem will raise the price of batteries but it won't stop them from eventually making EVs the better economical choice eventually.

(The other 'advanced materials' are largely also in gas cars too. The magnet material would be the other one I guess.)

There may be no organization more concerned at this moment about the cost of automotive Li batteries than GM. A couple of comments from, the first a quote from Nick Reilly, the President of GM Asia-Pacific, talking about the Volt:

“People won’t buy a full car. They will buy a car and rent or lease the battery and the cost of leasing the battery will be the same as, or less than, the cost they’re paying today for petrol. So the motoring costs of an electric vehicle don’t necessarily have to be much higher than the cost of today’s vehicles,” he said.

We have been told many times that cutting-edge lithium-ion battery technology is expensive, mostly so for a first generation system. How much will the pack really cost? Articles looking at the Volt’s pricing suggest the pack could be between $5000 and $10,000. Current low end laptop grade lithium ion batteries are sold at bulk for $250/kWh, and high end medical/scientific grade ones go to $1100/kWH. Since the Volt’s pack is 16kWH, then price could be anywhere from $4000 to $17,600. The median of that range is $11,000, which sources tell me would be a “game-ender” for the Volt. So I think the range will be between $5000 and $8000 from the supplier, for a median cost of $6500-$7500 or roughly $450/kWH.

That's not a definitive number, but it's a lot closer to today's cost than the $1k/kWh that was floating around a year ago. Still, there's little doubt but that the more competitive battery chemistries will prosper.

And I'd add to the discussion that a car like the Volt won't compete in the marketplace entirely on the basis of cost. Recognizing that market penetration is starting from essentially zero, most early buyers will be willing to pay more for the intangibles surrounding near-zero running emissions of CO2.

I hope it is around $450/KWH. I think it will get there but right now I'm guessing it is around $550 to $600/KWH.

And I fully agree that early adopters are not buying for cost reasons . . . they are buying for eco-reasons, national security, interest in technology, trade deficit, hate of the oil spill, etc.

But there is only a relatively small number of those types of buyers. For the Leaf, Volt, and EVs in general to grow beyond an initial market, they'll have to do it on the basis of cost. And the only way that will happen is with higher gasoline prices and lower battery prices. And lower other EV component prices (chargers, motors, controllers, etc.) but most of the cost is in the battery

So ... you want opinions as to what data an investigative-type person should try to seek out in his/her effort to get their hands on hard evidence of the global oil situation being scary and heading into terminal decline? Here's my answer: ASK THE HARBOR MASTERS.

Forgive me as I ramble a bit with some back-story:

Two years ago, in the Summer of 2008, when oil was well over $125.00 a barrel, and when Congress was talking about tapping into the Strategic Petroleum Reserve (a special stockpile of crude oil reserved ONLY for national emergencies), President Bush went to the King of Arabia and begged him to have Saudi Arabia increase its daily oil output. The King scoffed at such a request. Here is my paraphrase (from memory) of what he said to President Bush: "There is no supply problem. There are already dozens of super-tankers waiting impatiently in each of your nation's many sea ports, all of them full of oil and waiting for days at a time to off-load their shipments. It is not a problem with supply, instead it is a problem with your refineries not refining the oil fast enough. If they would work faster you would have all the oil you need."

So ... is this true? Are the many petroleum sea ports and gas sea ports of the USA (such as New Jersey and Mobil and Shreveport, etc, which are all chock-a-block full of oil refineries) completely backed up with dozens of super-tankers all waiting to offload? What have the HARBOR MASTERS of such sea ports got to say about such backed-up traffic in their harbors? Are the Harbor Masters allowed to talk about it, or are they under the thumb of Big Oil to keep quiet about it all?

And ... when each super-tanker finally DOES off-load its shipment, what is the purity level of each shipment? In other words: how much of each shipment (anywhere from half a million barrels to 2 million barrels per ship, depending on that ship's size) is actual oil, and how much is dirt and sludge and other crap? (When you start getting "down to the dregs" of a dying oil field, the oil is VERY heavy and full of dirt and sludge and other undesirable stuff). This is an important question because a very high dirt/mud content makes off-loading difficult. The dirt and mud can gunk up the equipment and slow down the process. It can also wreak havoc upon the innards of the refinery itself, causing the refinery to shut down more frequently in order to do repairs and clean out the equipment. This can sometimes mean that one entire berth will get shut down for a shift or two because the pump at that one berth (the pump that sucks the oil out of a tanker's cargo hold) is in need of repair and/or cleaning, and there might not be another pump available to take its place while it is in down-time. So a Harbor Master will be aware of the frequency of broken pumps which would cause any given berth to get backed up.

And ... how much is "heavy crude" which means, how much of it has a very high wax content? (When an oil field starts getting very old, all the "light crude" is gone because light crude floats on the top, and only the "heavy crude" remains because you are scraping bottom at that point. And the measurement of "heavy crude" is a measurement of how much wax content the crude possesses. As far as anyone here who might ask "What is wax?" the answer is that "heavy crude" is called heavy when it is infused with excessive amounts of a naturally occurring wax of a pearly white color, which must be extracted from the oil in the refinery. After the wax gets removed, the most common usage of such wax is to sell it to the public as a product known as "petroleum jelly." Yes--Vaseline!) This is an important question because -- like mud and dirt and sludge-- an excessive presence of wax in a shipment of crude can gunk up the off-loading pumps and slow down the off-loading process. It can also (just like mud and sludge) gunk up the innards of the refinery itself, causing more frequent instances of down-time. Also, if you have two utterly identical super-tankers sitting side-by-side in a harbor, and if they are both loaded to capacity with crude, AND YET, if they each have TWO DIFFERENT GRADES of crude --one with a cargo hold full of "light crude" and the other with a cargo hold full of "heavy crude"-- the one with the "heavy crude" will be sitting much lower in the water than the one with the "light crude." And it is visually evident to the seamen and the Harbor Master when a tanker is sitting that low in the water. Also, it will have taken much more engine power for the tanker laden down with "heavy crude" to have chugged its way across the ocean than the one with the "light crude." And when they each finally off load, the pumps needed to suck the "heavy crude" out of the one cargo hold will have to work far harder than the pumps sucking out the "light crude."

And ... how much of each shipment has been "cut" by water as a result of the process known as "water injection?" (I am assuming you know what water injection is all about. For the uninitiated, water injection is a trick used to try and coax an older well into more easily releasing the yuckier and heavier oil, because oil floats on top of water, so pumping massive amounts of oil down into the ground forces the more stubborn heavy stuff to rise up.) So, getting back to the whole issue of "water cut," each instance of offloading --in which a pump in the oil port sucks the crude out of the cargo hold of a super tanker-- will ALWAYS include a special machine attached to the pump called a "water cut meter." The water cut meter measures how much of the liquid flowing through the pumps is just useless water. That way the oil interest who purchased that particular shipment of crude knows how much of those 2 million gallons really is crude and not just water, and you better believe that they won't pay for a single drop more than what the water cut meter reports. And yet, it still took all those hours to off-load all that crude, regardless of how much of it proved to be water, and it also took all that energy to get the pumps to extract it all. (Matt Simmons claimed a few years back that the American water cut meters that have been off-loading Saudi crude since about 2006 have been logging in water cut percentages of well over 30%. That's a disturbing number since it takes a huge amount of energy just to haul each tanker load across the ocean from Arabia, and when it arrives it's not that much of a payload these days. So when a shipment that is THAT watered down get sent through a refinery, the net amount of oil gleaned is pitifully small.)

One more thing, I compiled the following list of "oil vocabulary words" a few years back. I confess it's a very amateurish list of vocabulary words, but if you can get past its layman's look and feel it might prove helpful. (I am a writer myself, so you're welcome to my meager research)

Good luck.

In a related vein, I once realized that our economy was in big trouble due to the trade deficit while windsurfing. I windsurfed under the golden gate bridge and noticed that the wakes of the ships coming in were much larger (and more fun for launching off) than the ships going out. Coming in they were loaded with goods from China. Going out . . . they were largely empty or loaded with scrap cardboard. :-)

I made an error while I was typing, sorry.

I accidentally wrote: "so pumping massive amounts of OIL down into the ground forces the more stubborn heavy stuff to rise up..."

But it should've been: "so pumping massive amounts of WATER down into the ground forces the more stubborn heavy stuff to rise up..."

Ostensibly your questions should be contained in the EIA's Company Level Imports data, including API gravity and sulfur content. I've thought about checking a month's worth of data here against what the EIA says we're importing, feel free to do the deed if you're interested.

Jon C in a post below mentions Henry Groppe, he claims his firm tracks real production via port traffic, seeing vast discrepancies with some nations, up to 2 mb/d as I recall. We've never gotten anything really solid out of Henry other than these tantalizing suggestions; around 5 years ago he did have some .pdfs on his firm's work, forget where they're hosted now.

Along the lines of your suggestion of cozying up to the local harbor master at a bar, in his new book Ken Deffeyes suggests that if you really want to get some production numbers do the obvious thing, which of course is to bribe the tax collectors at various ports...nice bit of of Ken's wry wit, which for me compensated the fact that the book doesn't really cover any new ground and rambles about like a drunken steer.

"DantesPeak" at used to include bits from Oil Movements bulletins in his posts, they're a tracking firm like Petrologistics - or was it Petroconsultants? The guys with the ring of spies seeing how low in the water tankers were. Dante is MIA for a while though and is pretty POed anymore in re: content.

PS: Someone with access to these proprietary data sources could, in theory, submit their contents to WikiLeaks - I suppose; or is that contrary to their charter? Do they have a charter? I'd find this out myself but of course their site is down for maintenance right now.

Wikileaks is a classic anti-war organization. It's not really interested in exposes other than those that make the US military look bad.

This is not true. Yes, they have been in the headlines for various US military documents that they received and published. However, they have leaked documents on thousands of other things. Don't judge the entire operation because leaks on one particular issue.

Speculawyer is right. Wikileaks leaks lots of kinds of documents, not only those that make the US military look bad.

There's a great TED talk with the Wikileaks head, Julian Assange. He talks, for example, about leaking documents on internal Kenyan politics that helped sway their presidential election.

With the exception of North Korea, I doubt very seriously if there is a port in the world where it would cost Groppe more than a thousand dollars a month to buy as much inside data as he wants from people working in the longshore/shipping/taxcollecting/policing industries, especially in relation to oil.

A single cop who patrols the waterfront area would be enough;an underemployed or unemployed housewife capable could get hold of and deliver such data with her eyeballs, a bicycle, and an email account if she lives near the shipping channel.

There aren't that many ports that can handle tankers.

There aren't THAT MANY tankers in the world, and even though I have never been close enough to one to get a good look without binoculars,I expect I could find out everything I might want to know about it in an hour or two on the net, starting with the numbers and name painted on it's side..Add that to readily available data about ship movements.Groppe's claim seems eminently reasonable to me.

Figuring out how much oil or ng is flowing thru a pipeline would be considerably harder, but I have an instrument that I can point at a hot machine that tells me its temperatiure within 1 percent-very handy for trouble shooting and it cost only a little over a hundred bucks.

I am willing to speculate that an engineer with analogous but more sophisticated instruments and access to data obtained by flyovers or spy satellites or a little human intelligence from the ground could determine how much oil or gas on average is flowing thru the line.

I have worked around a tank farm (for a few days doing maintainence ) where trucks are loaded for local delivery;every truck was/is loaded to capacity nearly every trip.

(I never miss an opportunity to talk to janitors, truck drivers, or engineers, or hardly anybody else for that matter.)

A single main driveway leads into and out of the one where I worked;a little girl could easily count the trucks coming OR going.

If you have one randomly selected day's traffic count every couple of weeks for the last year, you could determine what went down that driveway to within a percentage point easy as pie last year.

Innocent, I think you've made a few incorrect statements. I used to work in the oilfield equipment and service business, not transportation (tankers) but here's what I noticed.

1. You wrote: "When you start getting "down to the dregs" of a dying oil field, the oil is VERY heavy and full of dirt and sludge and other undesirable stuff". You're right about the crud that accumulates in the bottom of a tanker or a stock tank.

But I don't think that's true for an oilfield. In my (limited) experience, a field pretty much has the same consistency of oil throughout its lifetime. The oil extracted during the first few years of production is not going to be remarkedly different from what is extracted 30 years later, except for water content (more on that below). Also, there's not really any "dirt" in produced oil. There is sand and silt (which don't have the same meaning to oilfield people as they do to the general public). But when the downhole completion is done correctly, the amount of silt and sand that is actually produced to the surface is (a) small and (b) somewhat constant over time, or even reduced; the loose or "unconsolidated" sand flows out first.

2. You wrote "When an oil field starts getting very old, all the "light crude" is gone because light crude floats on the top, and only the "heavy crude" remains because you are scraping bottom at that point. And the measurement of "heavy crude" is a measurement of how much wax content the crude possesses."

I don't think that's right either. In some fields there is a separation, with a gas cap or a higher gas-oil-ratio (GOR) at the top of the reservoir, and with more water at the bottom. But I have never heard of any significant different difference in oil gravity within the same formations.

Second, the wax content is independent of "gravity". Heavy oil means just that: a gallon of heavy oil weighs more than a gallon of light oil. The denser components may or may not include wax (paraffin). Venezuela's heavy oil fields generally have very little wax, while some fields with lighter oil have lots of wax.

3. You ask: "how much of each shipment has been "cut" by water as a result of the process known as "water injection?" That's not an issue at all.

The contracts between buyers and sellers always specify the maximum allowable water content. It's been a long time since I have seen figures, but 1 or 2% sounds about right in some parts of the world. It's true, the "water cut" often rises in older fields, mainly because the "purer" oil (less water has been drawn off the top of the formation, but it can also be due to water injection. However, it doesn't matter, it just makes things more expensive for the producer. The oil is treated in the field to reduce the water content to a permissible level before it's put into a tanker or a long distance pipeline. If there's twice as much water, then the operator needs to install twice as much water treatment capacity. And nobody is going to intentionally load a tanker or a pipeline with too much water. The oil is checked at the receiving and the buyer doesn't pay for water.

There are some long term problems facing the oil industry, but I think your remarks are off-base.




Thank you for scrutinizing the more critical details of my incomplete layman's research with your own professional expertise. I regret I am unable to go back up and re-edit my original post in light of your input.

I confess that much of my assertions about the oil ports comes second hand from other data and assertions I have only remembered (but never compiled or annotated) from interviews with Matt Simmons and a few other Peak Oil activists, so my scholarship comes up woefully short there.

If you feel there is no scientific and/or factual merit at all to my post, I might ask a moderator to delete my post. Confusion and misinformation is the last thing needed in this critical issue, and I would hate to contribute to that.


--I. Byproduct

Thank you Innocent, you are a wonder.
Gail, this is the type of forensic data input this thread is seeking.
Cheers Juan

The late L. F. Buz Ivanhoe on petroleum data from OPEC and others. See especially the 1996 dedication issue 96-1:

I took a look at that issue of the Hubbert Center Newsletter from 1996, and it points out some important issues, such as that OPEC reserves had a big jump in the 1980s, and then ever since have stayed almost exactly constant.

The newsletter also points out that many rely on BP's Statistical Review of World Energy, and some (such as journalists) may be under the impression that this is information that BP has gathered and vetted on its own. However, BP states that it gets its reserves estimates from Oil & Gas Journal, and OGJ gets their data from the country's official reserve estimates. So these three widely cited sources all trace back to the same original sources—and these don't seem reliable.

The USGS reserve estimates are also too high, the newsletter argues, so they're not a great source either. The IEA has used USGS estimates as part of the input for its production forecasts. But according to a 2007 article by David Strahan, the IEA is going to take another look at USGS reserves. I'm not sure what's happened, and whether the IEA has made any official statement on their view of USGS reserves.

Finally, the newsletter also includes Ivanhoe's prediction of a peak for world oil production in 2010. He may have been pretty close! The newsletter doesn't describe how he arrived at this, and the graph shown there has kind of an odd shape, with a really steep decline after the 2010 peak.

The USGS reserve estimates are also too high, the newsletter argues, so they're not a great source either.

The USGS doesn't do reserves, so of course they aren't a great source for them.

The United States Geological Survey does not survey the critical geological resources of the United States.

That just makes so much sense.

Web, as usual you are spouting off before learning WTF you are talking about. The USGS does "Resource Assessments", which are not quite the same as reserves. Here, do some homework:

National Oil and Gas Assessment

The ones that I personally am most familiar with:

Alaska Petroleum Studies

Including the ever popular ANWR Assessment:

The Oil and Gas Resource Potential of the Arctic
National Wildlife Refuge 1002 Area, Alaska

For someone who aspires to be an internet oil and gas pundit, you seem singularly uninformend, IMHO.

Should I spell it out again?
The United States Geological Survey does not survey the critical geological resources of the United States.

An example of a survey is a census, which is what the US Census does and is a count of the USA population.
You would think that the USGS would try to count the reserves of a critical resource like oil.
But no, apparently they have better things to do with their time. Like having their geologists write stupid articles hypothesizing about the "enigma" of oil reserves.

They can't even handle production data, which evidently they leave the EIA from the DOE to deal with.

And shove it if you think I am using the word reserves wrong. You know what we are talking about. I would suggest that maybe the terminology mumbo-jumbo was invented to keep the citizens in the dark.

And shove it if you think I am using the word reserves wrong.

You aren't using the word wrong, you appear to not even understand what they ARE, completely different things.

Its almost as though you are spouting "I demand we change the air in the tires of my salamander!".

To those who know the difference between a car and a salamander, and that you probably meant one rather than the other, its an incoherent statement. Its even funnier when, after having been corrected, you decide you want to keep saying salamander.

Whatever happened to learning at least SOMETHING on a topic before extrapolating a Unified Field Theory of Everything from it? Shouldn't you at least be aware of the definitions involved?

You guys can't stand it when an outsider comes along and points out your failings in providing the public with some fundamental knowledge. I guess its all so very embarrassing to your chosen profession. So much easier to bluster and hide behind a facade of meaningless definitions.

Look at the topic for this top-level post -- "Wikileaks Wish for Oil Data". Can you imagine having the Saudis take on your position and basically hide behind some technicality? In that case they could rhetorically claim "We gave them assessments yet the infidels don't know the difference between assessments and reserves! How dare they be so blaspheming of Oillah!"

Seriously, all I do is work with probabilities. Many scientists make the strong claim that Probability Theory is the "Logic of Science". The fact that I base my analysis on quantitative estimates of probability and not on layers of obfuscation must drive these guys up the wall.

Seriously, all I do is work with probabilities.

Yeah...but you rant and rave about anything and everything else, even when you don't know Jack about what you are talking about. And when somebody calls you on it you get really pissed.

When you stick to probabilities you somethimes have some interesting/valuable comments. However your Pontification gets tiresome, and adds little to the discussion.

So you just have a problem with my attitude. Too bad.

If you can state where a model that I propose is clearly wrong and that it amounts to more than a triviality, I would certainly appreciate it. So in this case the triviality is in the distinction between assessment and reserves. And that is just a distinction borne out of subjective uncertainty and political/legal arguments.

The whole artifice built around Possible, Probable, and Provable is just so much angels dancing on the head of a pin. Cripes, why don't they add Potential and Predictable categories as well? These are the classic indicators of bureaucrats with too much time on their hands. All they have to do is come up with a most likely outcome and then everyone will realize that the actual outcomes could turn out on either side of this projection, equally likely either optimistic or pessimistic. What is so freaking hard about that?

Let me give you an example: Weather forecasters will give us a prediction of say that the likely high temperature for tomorrow will be 70F. Everyone seems to be comfortable with this. They don't say that it will be provably above 50F, and possibly below 65F. When you talk it through like this in concrete terms that people can relate to, you see how silly the entire artifice is built on.

Extend this to climate change predictions and you have the really silly case that for example NOAA will only work on projections of climate change that are "possible" and somebody else is responsible for the "provable" situation. This is nonsense. Science works best when it is focused on the most likely outcome. The fact that USGS is only works on assessments points to the ridiculousness of these arbitrary politically motivated distinctions. (There is the element of technology growth but that just goes to prove the big holes that we face and the limitations of our knowledge.) What the American public deserves is an objective most-likely outcome and it is apparently just the the thing you are trying to rationalize away.

For someone who aspires to be an internet oil and gas pundit, you seem singularly uninformend, IMHO.

He does it so often, I suspect its on purpose. It doesn't require much reading to determine what the USGS does, or does not.

I know what they do. I was applying a layer of sarcasm. It has often been pointed out that certain people can't detect sarcasm.

On of the most important things they can do, given the USGS's supposed expertise in geological matters, and they don't do it. Who would have thunk it?

It's like the US Census Bureau not estimating the population of the USA.
It's like the National Weather Service not doing weather forecasts.

If we cannot get field data, or could only get field data that lies, then it would be really nice to have true production data out of the middle east. Henry Groppe claims to have this data via importer statistics, etc.

Maybe his agency would be willing to give up some of his data, say 4 or 5 years back. When it would be helpful to academices to understand what did happen, but less useful for his investor customers.

Just a question regarding oil data: Is Rembrandt still publishing his fantastic Oilwatch monthly or was August 2010 the last edition for the moment? (Either that or I've missed the September edition - but have googled and cannot find it anywhere).


If I am not completely mistaken I put myself up on his mailing list for the Oilwhatch, but have not received any notification for september a september issue.

The price of a bbl of oil? Riddle me this:

When a 200,000bpd refiner buys crude, what is the price/bbl?

How would you know?
Moreso, how could you know? The deal bypasses any paper-oil exchange. It is direct between refiner and producer.

Who says the price is in USD? The negotiations are likely to involve variables of time,blend of currencies, options of all types,political agreements, other intangibles, selected ratios of hard goods/bbl[gold/silver/platinum, foodstuffs, building materials, etc], performance contracts...i.e., unlimited negotiation possibilities.

So all stated/quoted prices/terms are hogwash to all parties except the principal insiders, who have blended interests in global business/governance matters.

And you, fellow outsider, and I are left guessing. That, itself, is valuable knowledge.

Is this true? I want to others' view s.

The only data that is real is the price data. Everything else is suspect.
Its either wrong, or its manipulated.
This is a trillion dollar market
We know that the WTI price benchmark is manipulated by the govt. they shove SPR oil in there to drive down the price
Brent oil is better - and a good tell is when the gap between Brent and WTI widens


So... does this sound like the gold market?

or the 10 year govt interest rate?

or, for that matter, the S&P...?

the only truth is long term commodity price trends.
you know the old saying "you can't fight the Fed" well
oil can fight the Fed - and win

I would like better data as well, but we shouldn't necessarily require it. Saudi oil is a fraction of the total (not insignificant of course) yet there is enough information elsewhere to fit the jigsaw pieces around it.
Its no longer about the geology, its about the statistics.

What do you think are some of the best sources of data publicly available on OPEC countries? Is the information all scattered around, or is there a source that has collected the data, and which you think is especially good?

You have uncertainty in the actual estimates and uncertainty in the veracity of the sources providing those estimates.
According to Bayes, use whatever information you have. I just scrounge around.

The challenging part is to find patterns in the data. This is a blog post I just finished writing up on modeling stock returns:
It could be that the stock market is just all artificial game theory and the movements are all zero-sum. Yet we know that oil is a concrete quantity and so realistic and pragmatic aggregate factors play in to the model.

This is the kind of connection you need to make. You hypothesize on how the aggregate will play out and maybe you can use this notion to fill in the missing pieces.

A year or so ago I was going regularly to the ARAMCO employment web page to see what sort of professionals they were looking for. It was rather enlightening with respect to production difficulties that many posting here suggest. Lots of positions for geologists with experience with "complex carbonate reservoirs", "heavy oil", and "downhole pumps". They had multiple positions for these sorts of folks. It sure did sound to me like significant production problems were being encountered.

That's really interesting! Another set of data I wouldn't have thought of looking at.

....I was going regularly to the ARAMCO employment web page to see what sort of professionals they were looking for. It was rather enlightening with respect to production difficulties that many posting here suggest. Lots of positions for geologists with experience with "complex carbonate reservoirs", "heavy oil", and "downhole pumps". They had multiple positions for these sorts of folks....

OH, OH!!! Wait till WHO hears this. We are in serious deep doo doo now! Next thing you know they will be looking for Petroleum Engineers!

AK: LOL! Huh! Sounds pretty......well... like the oil patch, to me.

A year or so ago I was going regularly to the ARAMCO employment web page to see what sort of professionals they were looking for. It was rather enlightening with respect to production difficulties that many posting here suggest. Lots of positions for geologists with experience with "complex carbonate reservoirs", "heavy oil", and "downhole pumps". They had multiple positions for these sorts of folks. It sure did sound to me like significant production problems were being encountered.

A better question is to turn it around. The nubile spy brings you a complete breakdown of every well, every prospect, every survey, and every development strategy of everywhere in the world. Everything that is known is known to you.

Now what are you going to do?

If it's forecasting we are already past peak, what?
If it's forecasting we are at peak, what?
If it's forecasting we are near peak, what?
If it's forecasting we have a decade till peak, what?
If it's forecasting we have rising supply till past 2030, what?

I don't think that excepting the last case it will make much difference. The correct action in virtually all the cases is the same and most of the issues you are likely to face are about the reaction to the situation, not the situation itself.

Providing you can rule out the continuing sufficient supply case, you have all the information necessary to define the broad shape of your required actions. Precise dates are just tuning on WHEN certain thing happen and how dramatic the shock is likely to be. Providing you have an agile strategy, it's much more about the systemic reaction understanding.

Knowledge of the result of the 3:30 at Newmarket ahead of time is more use.

If it's forecasting we are already past peak, what?
If it's forecasting we are at peak, what?
If it's forecasting we are near peak, what?
If it's forecasting we have a decade till peak, what?
If it's forecasting we have rising supply till past 2030, what?

Well its about letting the people of the world decide what we do about oil not our governments.
If we are actually past peak which is possible given the public data then we have a problem.
As people have pointed out its pretty reasonable to assume that the major governments have better data on the oil supply and future disposition then we do. If we really are past peak then they have taken this decision away from us.
If we are at peak the same applies its our decision not theirs.
Even the 2030 case needs to be determined with clarity twenty years is not a long time given the financial situation what the world could devote to mediate peak oil is pretty small. Thus 20 years becomes uncomfortably tight.

Regardless this is a decision that needs to be made by the people of the world for better or worse. Just like global warming its a global problem and it now public and in front of the people and I can assure you that the people will decide what to do about it. That does not mean they will make the best decision in the most timely manner but it does mean what eventually happens with regards to global warming is a burden born by everyone on this planet.

Oil should be dealt with in the same manner.

Our currencies/global financial system for that matter but that would be stretching it :)

My point is the "global citizen" now has a real responsibility and a real reason for existence. Leaving these problems at the hands of our governments is simply no longer good enough. Indeed only by growing global citizenship can we hope to really tackle the underlying hard problems of population growth and excessive consumption by the wealthy. Eventually of course we will be forced to face these problems. Leaving this the real problem in the hands of governments will almost certainly lead us to war.

The sad thing is global warming seems to stand alone as one major problem that been exposed to the populace.
We have a long long list that needs solving.

I agree—and this is why I'd much rather see oil data made available not through leaks, but by people demanding it.

I also agree with garyp: We don't need to know exactly when the peak might be to come up with a good plan of action.

However, if people disagree a lot on when it might be, then that's an issue. It seems most governments and businesses hold to the last of his four possibilities: "forecasting we have rising supply till past 2030". They don't feel any sense of urgency.

I hope we could get more data to see how strong of a case can be made that supplies will not keep rising past 2030. I don't think that production will keep rising that long, but there are lots of others out there who think that it can. I hope that better data could help settle it, but I'm probably being overly optimistic about how rational people are, and how easily they might change their minds.

Most democratic governments are attempts at "representative democracy", where the electorate chooses some number of legislators to represent them, study the issues and questions of the day, and formulate laws and actions that will better the prospects of the nation.

When the representatives are not chosen for their qualities of intellect, judgment, wisdom, etc., but merely become tools of electoral factions to impose predetermined positions of the factions, then democracy rapidly degenerates into a stew of conflicting, short-term measures to prop up temporary power and prosperity.

Understanding uncertainty

This might be a really good link to grasp the concept of large uncertainty.

You can look at the maps and see all the "smooth" lines and labels.

The older one label by pottery style assume for example that America is defined by our garbage :)

Seriously old cultures are literally defined by their garbage pits. Where is "America" if you dig into the worlds
dumps ?

Perhaps if you can really grasp the true uncertainty in ancient claims esp the size of empires that people draw spanning many modern nations then you can understand oil.

In truth these empires did not have the long magnificent borders we love to draw they where fragmented city states with the rule of low barely moving much beyond the border of the city.

Real Roman controll i.e taxes and and identified owner for every piece or path of ground was not even close to the claimed extents.

Oil ?

What we need is more sites like "Satellite oer the desert". We could have a very good estimate of global oil production with complete and up-to-date satellite imagery. And the longer we can continue compiling and updating the data with new imagery, the more accurate the picture will be.