Net Oil Exports - July 2008 Update

Net Oil Exports - July 2008 Update. Top 20 Exporters (93% of total exports).

Oil Dollars

This was made by simply multiplying the average monthly price of WTI by the barrels per day of Crude and Condensate produced in that month.

Oil Consumption Changes 2005 - 2007

The BP 2008 Annual Statistical Review has been released. These are the consumption numbers. I used the difference over the past two year, rather than one year. I'll comment some more on the numbers soon building up to an export update around the 30th.

These are the Top Ten Gainers and Top Ten Losers by Barrels per Day. Besides China and Saudi, which are obvious points of interest, Germany and Singapore must be looked at.

Matt Simmons responds to Henry Blodget

I haven't heard anything from Matt Simmons in a while, so I was quite surprised when reading an entry on Henry Blodget's new finance blog to see that his was the first response. Also amusing that the subject was Arun Murti (weren't we just talking about those two last week?)

Here's his response:

You really should research your terminology before you drop it about in your articles.

"On the supply side, we don't subscribe to the peak-oil view. We don't think the world has run out of oil."

Definition of Peak Oil:

"Peak oil, as part of the fossil fuel depletion, is the point in time when the maximum rate of global petroleum production is reached, after which the rate of production enters its terminal decline."
source - wikipedia.org

Peak Oil is about the "Peak" in oil production... we sir have peaked, we did so in 2006. We are in what's called an undulating plateau and will soon enter a irreversible decline in oil production.

We will NEVER run out of oil, we simply will run out of CHEAP oil... easy to find and produce oil... I hope this sinks in clearly.

We discovered oil, found large deposits of oil and we produced those first, they were the easiest to get at. Most of those fields are in decline now, we're now going after the more difficult, smaller deposits...

Please go to www.theoildrum.com and do a bit of reading.

Kind Regards,
M. Simmons

Simmons response

Blog home: ClusterStock

No Calls for OPEC Meeting

Oil supply adequate, no calls for OPEC meet
June 8th, 2008
Reuters

Global oil supplies are adequate and there are no moves within OPEC to hold an emergency meeting to discuss record oil prices, Libya's top oil official said on Sunday.

"I think there is enough oil in the market, I did not hear anybody calling for a meeting," Shokri Ghanem, head of Libya's National Oil Corporation, told Reuters in a telephone interview.

U.S. oil surged nearly 9 percent to a record above $139 a barrel on Friday. Ghanem said he expected the price to continue rising.

"I think it will go higher," said Ghanem, who is also head of Libya's OPEC delegation. "That is a trend that will continue for some time."

Oil prices were rising due to reasons other than fundamentals such as speculation and concern over political tension in the Middle East, he said.

Consuming countries have called for more supply from the Organization of the Petroleum Exporting Countries (OPEC) to help ease high prices, but OPEC officials blame factors beyond their control for oil's rally.

OPEC, supplier of more than a third of the world's oil, was next scheduled to meet on September 9 to discuss oil policy.

Oil was becoming more difficult and costly to produce, and global supplies were nearing their peak, Ghanem said.

"The easy, cheap oil is over, peak oil is looming," Ghanem said.

Ghanem said last year that it may not be possible to boost global supply beyond 100 million barrels, from about 87 million bpd now.

OPEC's Oil Production Rose 300,000 bpd in May

OPEC's Oil Production Rose 0.9% in May, Survey Shows
By Diane Munro and Mark Shenk
June 4 (Bloomberg)

The Organization of Petroleum Exporting Countries increased oil production 0.9 percent in May as Iraqi output climbed to a pre-war high, a Bloomberg News survey showed.

OPEC pumped an average 32.28 million barrels a day last month, up 300,000 barrels from April, according to the survey of oil companies, producers and analysts. April output was revised down by 125,000 barrels a day. Production by the 12 members with quotas, all except Iraq, rose 200,000 barrels to 29.79 million barrels a day.

Crude oil on the New York Mercantile Exchange reached a record $135.09 a barrel on May 22 and closed at $122.30 a barrel today. Prices are up 85 percent from a year ago.

Iraqi production increased 100,000 barrels to an average 2.49 million barrels a day last month, the highest since October 2002. Output in the Persian Gulf nation has been curbed since the March 2003 U.S.-led invasion.

Iraqi Exports

Iraq exported an average 2.01 million barrels of oil a day in May, up 100,000 barrels from the previous month and the highest since before the invasion, the survey showed.

Exports from Iraq's two Persian Gulf ports, Basrah and Khor al Amaya, averaged 1.56 million barrels a day in May, up 100,000 barrels from the prior month. The increase followed repairs to infrastructure damaged by military action during March in the Basrah oil-producing region.

Oil exports from Iraq's northern fields to Turkey's Ceyhan export terminal on the Mediterranean Sea were unchanged at 442,000 barrels a day in May. April exports from Ceyhan were revised 22,000 barrels a day higher. Iraq exported about 10,000 barrels a day overland to Syria.

Nigerian production rose 50,000 barrels to an average 1.9 million barrels a day last month. April's output was the lowest since 1999. Security concerns and militant attacks on oil infrastructure in the country's Niger Delta region hampered repair work last month.

Exxon Mobil Corp.'s Nigerian oil unit gradually restored output from the Qua Iboe, Erha, Yoho and Oso fields over the month following a strike by the Petroleum & Natural Gas Senior Staff Association of Nigeria, or Pengassan, which represents white-collar workers. The strike ended on May 1.

Saudi Pledge

Saudi Arabia, OPEC's largest producer and the world's top oil exporter, raised production by 130,000 barrels to an average 9.25 million barrels a day in May. It was the biggest increase among OPEC members last month.

``Saudi Arabia probably made the big increase for political reasons, while Iraq and Nigeria had gains due to improved security,'' said Rick Mueller, director of oil practice at Energy Security Analysis Inc. in Wakefield, Massachusetts.

Saudi Oil Minister Ali al-Naimi said on May 16 that the kingdom had started ramping up production on May 10 in response to stronger demand from customers. He said output would reach 9.45 million barrels a day in June. The Saudi announcement followed a meeting that day in Riyadh between President George W. Bush and King Abdullah.

``The Saudis are either just taking advantage of the high prices or are responding to political pressure and trying to purge some of the speculation that's in the market,'' Mueller said. ``They are following through with the promise made during George W. Bush's visit.''

The planned increase in June output won't be affected by delays to the new Khursaniyah field. The field will eventually pump 500,000 barrels a day, Saudi Aramco said. The state-owned company will increase capacity by a further 250,000 barrels a day by the end of the year because of expansion of the Shaybah field.

Output Declines

Iran, the second-biggest OPEC producer, cut output last month because of a lack of interest in its high-sulfur, heavy oil grades. The country pumped an average 3.82 million barrels a day in May, down 60,000 barrels a day from April. Iran has at least 14 very large crude carriers, or VLCCs, floating near Kharg Island, a loading facility.

Libyan oil production declined 35,000 barrels a day to 1.735 million barrels a day in May because of operational problems at al-Jurf offshore oil field, which is operated by Total SA. A technical problem led to 45,000 barrels a day of production being shut-in beginning on April 24.

WSJ article on Oil Exporters

Oil Exporters Are Unable To Keep Up With Demand
Domestic Needs, Sluggish Investment Crimp Shipments

By Neil King Jr. and Spencer Schwartz
May 29, 2008
Wall Street Journal

The world’s top oil producers are proving unable to put more barrels on thirsty world markets despite sky-high prices, a shift that defies traditional market logic and looks set to continue.

Fresh data from the U.S. Department of Energy show the amount of petroleum products shipped by the world’s top oil exporters fell 2.5% last year, despite a 57% increase in prices, a trend that appears to be holding true this year as well.

There are several reasons behind the net-export decline. Soaring profits from high-price crude have fueled a boom in oil demand in Saudi Arabia and across the Middle East, leaving less oil for export. At the same time, aging fields and sluggish investments have caused exports to drop significantly in Mexico, Norway and, most recently, Russia. The Organization of Petroleum Exporting Countries also cut production early last year and didn’t move to boost supplies again until last fall.

In all, according to the Energy Department figures, net exports by the world’s top 15 suppliers, which account for 45% of all production, fell by nearly a million barrels to 38.7 million barrels a day last year. The drop would have been steeper if not for heightened output in less-developed countries such as Angola and Libya, whose economies have yet to become big energy consumers.

For all the attention paid to China’s increasing energy thirst, rising energy demand in the Middle East may pose the greater challenge. Last year, the region’s six largest petroleum exporters — Saudi Arabia, United Arab Emirates, Iran, Kuwait, Iraq and Qatar — curbed their output by 544,000 barrels a day. At the same time, their domestic demand increased by 318,000 barrels a day, leading to a loss in net exports of 862,000 barrels a day, according to the U.S. Energy Information Administration.

Demand in the Middle East is a major factor right now, said Adam Robinson, an oil analyst at Lehman Brothers in New York. Mr. Robinson predicts the region will constitute more than 40% of increased demand next year.

Saudi Arabia in particular has become a major energy consumer as the country pushes to put its oil riches to greater use. The kingdom is in the middle of a major investment campaign to become a world player in petrochemicals, aluminum and fertilizers, all of which will require huge amounts of oil and natural gas.

Since 2004, Saudi oil consumption has increased nearly 23%, to 2.3 million barrels a day last year. Jeffrey Brown, a Dallas-based petroleum geologist who studies net export numbers, said that at its current growth rate, Saudi Arabia could be consuming 4.6 million barrels a day by 2020.

That would cut significantly into Saudi exports even as the world looks to its largest oil supplier to help manage rising demand. Saudi Arabia has nearly a quarter of the world’s proven reserves and supplies around 12% of the 86 million barrels a day that the world now consumes.

One reason Middle Eastern nations are using more oil is a shortage of natural gas, said Bill Farren-Price, director of energy at Medley Global Advisors. This is particularly troublesome during the summer, when governments scramble to keep the lights on and air conditioners cranking.

Some producers, such as the U.A.E., are easing back at times on the crucial industry practice of injecting natural gas into crude oil fields, which is done to boost reservoir pressure and increase crude recovery rates. Halting the injections ends up undercutting oil production, further reducing exports.

As top exporters hit trouble, historically marginal players such as Brazil and Kazakhstan are likely to play a greater role. Three of the four non-OPEC players among the top 15 oil exporters — Russia, Norway and Mexico — are reporting declines in production this year. Kazakhstan is showing slight net export gains.

No big exporter is struggling more than Mexico, where net exports dropped 15% in 2007. Mexican officials announced Monday that output from the country’s once-mighty offshore Cantarell field had plunged by a third in less than a year.

Analysts said there are reasons for optimism. Russia’s government is scrambling to alter the tax rates that many say have put a lid on new oil development. Mr. Robinson said 65 new ultra-deepwater drilling rigs are expected to arrive over the next three years, following a five-year stretch in which the industry gained only 10 such rigs.

Those additional rigs will help companies tap some of the most promising, but now inaccessible, waters off Brazil, Australia, West Africa and in the Gulf of Mexico.

“The sense in the market is that peak oil is here and that things will only get worse,” says Mr. Robinson. “But the verdict is still out on that.”

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.