U.S. crude production rose to the highest level in a quarter century, as
the shale drilling boom in states such as Texas and North Dakota cut the need
for foreign oil. The United States pumped 8.075 million barrels a day in the week ending Dec. 6, the most since October 1988. The turn around would have not been possible with out new technology from horizontal drilling and large multiple fracking of the shale zones.
The U. Production is some 30% higher or around 2 million barrels per day higher than it would have been if fracking of the tight shale beds had not been allowed. The U S EIA just forecast in the future this number, ie oil from tight shale beds to grow to over 4.5 million bbls per day by 2020., that is if fracking of horizontal wells to deplete the shale beds continues.
The Mexican Congress’ approval of a bill to end a 75-year state oil
monopoly is expected to generate billions in additional foreign investment a
year. JP Morgan Chase puts the number at up to $15 billion annually, while
Capistran says the overhaul could bring an additional $20 billion foreign
direct investment as soon as 2015. This could mean the end of the decline in Mexican oil production. See attached Bloomberg Report
Saudi Aramco’s Chief Excuative Officer Klalid Al Falih recently announced new expansion projects at Khurais of 300,000 barrels per day and 250,000 barrels per day at Shaybah. In 2014 Saudi Aramco will complete there 900,000 barrels per day Manifa heavy oil project. For details see the attached Bloomberg report.
According to recent unofficial estimates Saudi rig count is now around 170 rigs growing to ove 200 rigs next year
From various sources including the Financial times this last week I have learned that the Saudi’s responding to various world oil shortage and cutbacks have stepped up their own production to help hold down world oil prices. Part of the production increase has come from the planned Manifa heavy oil increment which is is now partially completed. When it is fully completed it will add 900,000 bbl/day of capacity by 2014 but Saudi Capacity should still be in the 12.0 to 12.5 MM Bbl per bbl day range.
While little has been reported in the international press loss of some 1.4 MM Bbl/d of export capacity from Libya coupled with the 0.9 MMBbl/d loss of export capacity from Iran due to the sanctions has put a lot lof stress on the crude oil supply system even with the increasing U. S. domestic supply from shale oil drilling.
Further increases of Saudi production to offset the Libyan shortfall are doubtful in my opinion because of the different types of crude available.
Of course the Syria situation also adds a whole new unkown into an allready complex situation which is far from resolved.
Over the week WTI Prices have drifted from $107 to $102/Bbl as the Syria bombing threat lessened but the turmoil in the oil markets has not gone away. Brent is running about $5.00/Bbl higher.
Thank goodness for shale oil, with nearly 2 million of new U S, supply Saudi Arabia is still the only country in the world with any surplus oil capacity. Thanks to the new technolgy, ie horizontal drilling and multi stage fracs shale oil at todays prices of $90 plus/ barrel appears to be ecoomonic to develop. Think where we would be if this technology had not come along. The following two articles are a good summary of the Eagle Ford and Bakken developments and this technology on the thiinking even in Russia
The article prepared Dr. David Whitehouse entitled “The Global Warming Standstill” needs to be read and understood by all of those who are planning for America’s Energy future based on global warming caused by rising levels of CO2 in the atomosphere. Seems the recent years temperatures have not followed the increasing model trends and infact for the most of the last decade have been flat to down. Dr. Whitehouse paper(PDF) has a good executive summary, the entire paper 60+ pages can be found at
This time last year I was working hard to get my final changes to the text sent to my publisher PennWell. This last month I have prepared a new talk 35-40 minutes with about 30 charts to explain where our industry has progressed since then. It is not a rehash of the book but many of my conclusions are the same. Saudi Arabia, and the middle east is still the key to our energy future inspite of our successful development of shale reserves in this country.
I am prepared to give this talk and keep it up to date for the next few months. My fee is $300 per presentation plus expenses. Look forward to hearing from you. Charts will be made available to you in eletronic format or I can bring hardcopy booklets at my cost.
Please contact me at firstname.lastname@example.org Lou Powers
This rather detail report was recently published by the SUSRIS organsation that promotes Saud-US relations and I thought my readers would appreciate having a copy for your file.
With internal consumption of crude oil and refined products growing at 7% a year and a long range goal to maintain production levels not to exceed the 10 million bbls/d of crude the long range planners relalize they have a problem. Based on consumption of 3 million bbls/d and a 7 % demand growth in 20 years the Saudi consumption in 20 years computes to be 11.6 million bbls/d of crude oil and natural gas liquids. Something has to give. For years Saudi Arabia has subsidized gasoline. For example in March 2011 when ” The World Energy Dilemma was being prepared the price of gasoline in Saudi Arabia was $0.85/gal versus $3.70 /gal in the USA and $9.00 per gallon in the Norway. Many times doing away with these types of subsidies has caused unrest. It is not a problem that is not recognized in Saudi Arabia as the attached link describes.
Saudi Arabia has launched large investments in solor and is planning to invest billions of dollars in nuclear power down the road to reduce oil consumption to generate electric power. Whether these investments will come on line in time to avoid a problem down the road is a question.
According to Platts recent report the Saudi’s never did cut back to 9 million barrels per day so increaseing to 9.3 million barrels per day is not much of a big deal as the Fuel Fix article link attached suggests.
Shown here is Platts estimates of Saudi Production sincce their cut back in November of last year:
Nov 9.82 Dec 9.45, Jan 9.25, Feb,9.20, 9.20, and April, 9.30 Assuming the Platts numbers are correct one needs to be aware of the headlines and what they really mean. The Platts report was May 14, 2013.