Oracle

A reader asked about Murti's oracle status. I give a lot of attention to predictions, mostly negative. But Murti has been correct. His record in the last 3 years is better than that of Pickens. But only if we discount the fact that he was horribly wrong on the low side.

The real Oracle is Simmons. He rarely mentions price. In 2005 he bet Tierney of the New York Times $10,000 that oil would average $200 in 2010.

He has recently said that oil would be $200-$400 (I've also seen it reported as $500) in 6 months to 4 years.

http://www.simmonsco-intl.com/files/Another%20Nail%20in%20the%20Coffin.pdf

Annual Net Oil Exports

Note: I saw a comment on The Oil Drum suggesting that I should have an annual graph. I posted this last October and will update it in June when the EIA releases its latest annual numbers. I'll also make a version matching the Top 20 Chart using raw barrels instead of a percentage.

The purple line extends out a few more years because it had the data I was using for the Top 20 (I was only doing Top 15 at the time)

_________

Here is a preliminary yearly chart of oil exports. These numbers are simply the Total Liquids Production numbers minus the Total Liquids Consumption numbers published each June by the EIA. I believe t12 is the consumption table I used. I'll document that when I update this. I made this earlier this year and I still need to update it for the last year of available data. But the basic shape of things should be clear.

The reason I used the different datasets of countries was the result of adding more and more data to see if anything changed significantly. It doesn't. The reason the different datasets use such weird numbers(18,26,42,49, etc.) was because I wanted to use the same countries in each case, and there are only 49 countries that have consistently exported oil in the last 20 years.






China for instance is number 49 on the list and they haven't exported since 1991. Six other countries have not exported in a few years, hence the next dataset of Top 42. The addition of Kazakhstan to the top 15 gives the current Top 16 which I use for the Monthly Chart. These top 16 make up 90% of total net exports. The top 20 are 93% and top 25 are 96%

Note that this chart uses Percentage of Total Liquids as a measure, when I update this, I'll probably switch to raw barrels.

IEA Drastically Reduces Long-Term Forecast

International Energy Agency to Cut Supply Forecast, WSJ Says
By Steven Bodzin
May 21 (Bloomberg)

The International Energy Agency, the Paris-based energy analysis organization, will predict that companies may produce 100 million barrels a day by 2030, lower than the 116 million previously forecast, the Wall Street Journal reported.

The group is analyzing the 400 oilfields that provide more than two thirds of crude today to determine how much they are likely to produce in the future based on field health and investment, the newspaper said on its Web site.

The IEA is working with oil companies, oilfield-service companies, energy ministries and consultants, the Journal said. Saudi Arabia, Venezuela, Iran and China aren't cooperating with the new study, the newspaper reported.

The IEA has traditionally assumed that supply would rise to match demand, the Journal said. That assumption is now in doubt as producing nations fail to invest, according to the newspaper.

An Oracle of Oil Predicts $200-a-Barrel Crude

An Oracle of Oil Predicts $200-a-Barrel Crude
New York Times
May 21st, 2008

http://www.nytimes.com/2008/05/21/business/21oil.html?hp

Arjun Murti's predictions

Net Oil Exports - May 2008 Update

Net Oil Exports - May Update. Top 20 Exporters (93% of total exports).

[next update -July 15th]


I revised February up by about 330,000 bpd. March stays about the same and April exports drop by about 135,000 bpd. all revision data is included in spreadsheet.

Click on following link to download updated Excel spreadsheet(420 kb):
[Next update July 15th]
scroll down to bottom of linked page and hit orange button on right and
then hit second prompt if download doesn't start immediately

Latest Pickens Video - May 20th, 2008

T. Boone Pickens - May 20th, 2008

Latest video interview with Becky Quick on CNBC
http://www.cnbc.com/id/15840232?video=747990771

1) No Presidential candidates talking about issue.

2) Oil is going to $150 this year.

3) BP Capital was wrong earlier this year. But is now right.

4) BP Capital is long crude oil.

Venezuela adds 30 billion barrels

Venezuela Says Proved Oil Reserves Rise to 130 Billion Barrels
By Steven Bodzin
May 8 (Bloomberg)

Venezuela has added 30 billion barrels of new proved crude oil reserves, bringing its total to 130 billion barrels, Oil and Energy Minister Rafael Ramirez told reporters today in Caracas.

Ramirez spoke at the opening ceremony of a meeting of South American energy ministers in Caracas.

Rumor has it that the petroleum engineer doing the proving was named Hugo Chavez. Interestingly, this comes on the heels of news that Brazil might surpass Venezuela as South America's biggest producer. 30 billion barrels is larger than Brazil's recent Tupi and Carioca finds combined.

Petrobras to Start Output at Tupi in 2009

Petrobras to Start Output at Tupi Ahead of Schedule
By Joe Carroll and Monica Bertran
May 5 (Bloomberg)

Petroleo Brasileiro SA, Brazil's state-controlled oil company, plans to begin pumping crude from its 8 billion-barrel Tupi field in 2009, a year ahead of schedule, and to start its Carioca field in four to five years.

A test well at the offshore Tupi field will produce about 20,000 barrels of oil a day starting in next year's first quarter, Chief Executive Officer Jose Sergio Gabrielli said today in an interview in Houston. Production will reach 100,000 barrels a day by the end of 2010, he said.

Technical challenges involved in tapping crude beneath thousands of meters of rock and salt aren't insurmountable, Gabrielli said. The company will announce an increase in June in its $112.7 billion, 5-year capital budget to fund the work at Tupi, the Western Hemisphere's largest petroleum discovery since 1976, and other offshore prospects, he said.

``I am very surprised that they're saying they can start production that quickly,'' said Matt Cline, a U.S. Energy Department economist who tracks the Latin American energy industry. ``I can't even think of a scenario where that's even plausible.''

Petrobras, as Rio de Janeiro-based Petroleo Brasileiro is known, rose 1.6 percent to 43.70 reais in Sao Paulo. The stock has climbed 25 percent since the company said in November that Tupi may hold 8 billion barrels of recoverable oil equivalent.

Carioca

Carioca, located to the southwest of Tupi, may hold 33 billion barrels of oil, Brazilian regulator Haroldo Lima said last month. The estimate was based on a magazine article, Lima later said. Gabrielli said it will take several months of drilling to evaluate the field.

There are 7 or 8 prospects in the area of the Atlantic Ocean where Tupi and Carioca are located, Gabrielli said. Other producers exploring that area for oil and gas include Exxon Mobil Corp., Chevron Corp., BG Group Plc and Repsol YPF SA.

``The hypothesis we have is that they are very large reserves, but we don't know,'' Gabrielli said. The increase in capital spending will be ``a lot,'' he said. ``We need more rigs, and they are very expensive right now.''

Tupi, located 155 miles (250 kilometers) off the Brazilian coast, may employ more than six drilling vessels once next year's test well is finished, Gabrielli said. The world's most advanced deepwater rigs are renting for $600,000 or more per day in some cases.

Fine Tuning

Petrobras plans to use knowledge gained from next year's production test at Tupi to ``fine tune'' tools and techniques it'll use to tap other offshore reservoirs, Gabrielli said. The company is spending $60 million to drill each offshore well, down from $240 million per well a few years ago, as rig crews and engineers become more familiar with the region's geology, he said.

``We think we don't have any big technical challenge here,'' Gabrielli said. ``We know pretty much most of the technology.''

Petrobras expects to increase production to the equivalent of 4.2 million barrels of oil a day by 2015, Gabrielli said. The company produced 2.34 million barrels a day in March.

Will Brazil Become a Net Exporter?

In Robert Bryce's "Gusher of Lies" (2008) I found the following section on Brazil:

By 2010, the company [Petrobras] will likely be exporting 500,000 barrels of oil per day. and by 2015, the company hopes to double its oil production again, to some 4.5 million barrels per day. These plans gained credence in November 2007 when the company announced that its new offshore Tupi field may hold up to 8 billion barrels of oil equivalent. Tupi is the second largest oil discovery in the last 20 years.

I found this odd, since the 4.5 mbpd goes well beyond even the most optimistic forecasts I've seen in the last few years.


*N.B. - The following chart is not a forecast, it is an implementation of the scenario described above. It uses numbers that produce 500 kbpd of exports in 2010 and 4.5 mbpd of crude, condensate, NGL, and RPG production (excluding ethanol) in 2015. Ethanol production is included in chart, but kept at its 2007 level of 400 kbpb. Consumption is estimated at growing 2% annually through 2010 and 6% annually through 2015.



From the numbers of the last 5 years we can see that Brazil's production has accelerated to 10-12% annually at times and flattened out twice. Since Early 2006 it has dropped to about 2% annually.

Will Brazil Become a Net Exporter?