Monday, September 10, 2007

Oil Peak by 2010?

The Norwegian energy provider Statoil has apparently named the time for the peak of oil production in the OECD (Organisation for Economic Cooperation and Development) countries as 2010 - 2015, which leaves the world increasingly reliant on the OPEC group and Russia to provide crude oil from petroleum. However, I thought that the peak for world oil production was also believed to arrive at around this date, although there is much debate over this issue. Statoil are now after a share of the Canadian oil sands and have paid $2.2 billion for the North American Oil Sands Corp., as part of its intention to develop its largest non-Norwegian oil-project. Statoil is based in Oslo and is expected to finalise a merger with Norsk Hydro on October the 1st; it is also among the 12 major oil companies and operates in 35 different countries.

Both the UK and Norway have a share of the North Sea fields of oil and gas, and which are maturing (i.e. running on the down-side of Hubbert's Peak with an inexorable fall in production in the coming years). Most oil-companies are hesitant to voice their views on when this might come but Statoil thinks that anywhere between 2010 and 2015 is the most likely scenario; so it could be within a couple of years or seven years at a maximum, neither limit allowing much time to adapt.

Other than obtaining more oil from the OPEC countries (mostly based in the Middle East), Russia, Venezuela and some production in the far East, the adoption of non-conventional sources of oil is seen as an important means for taking-up this slack in production... hence Statoil's interest in the Canadian tar sands. Using steam-assisted gravity methods, it is thought that the first oil will be produced in 2010, and that production will be ramped-up to 200,000 barrels a day by 2020.

Doubtless there will be more mergers to appear on the international face of oil supply, but I am reminded that depending on just how much oil the Middle East (especially Saudi), Russia and Venezuela can keep pumping out, and how much "alternative" oil can be made, the world faces a transportation crunch in short order, and a massive hiking-up of prices in general, since there is really nothing that does not depend on oil either as a fuel or as a raw chemical feedstock for manufacture, including this keyboard I am typing to you on.

Related Reading.
"Statoil sees OECD peak," Claudia Cattaneo,

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