The death of cheap crude (Aljazeera)

[reorg]

The death of cheap crude
By Adam Porter in France

(...)

As prices hit record highs, some analysts' remarks, and much of the comment in the media, are directed at uncertainty surrounding Russian company Yukos, Iraqi pipeline attacks, Nigerian strikes and a forthcoming presidential referendum in Venezuela.

Yet behind the easy headlines, so called emerging economies such as China and India, added to rising American demand, are putting pressure on the price of energy. Meanwhile, major oil fields are withering, no new ones are being found and supplier countries are already pumping at their production limits.

(...)

Ali Bakhtiari, head of strategic planning at the Iranian National Oil Company (NIOC), dismisses the media chat, as just that.

"Cheap oil is dead. You are never going to see oil priced at $25 a barrel again. These high prices, yes, they are exacerbated by Yukos, Iraq and so on, but more importantly they are a sign that we have major structural problems with supply.

(...)

Then there is the Saudi Arabian angle. Another major oil figure, the recently retired executive vice president of Saudi Aramco, Sadad al-Hussaini, has frightened the markets with recent articles in Oil & Gas Journal.

In them he cites "proven developed reserves" of Saudi Arabia at only "130bn barrels", half of what Saudi Arabia normally claims to have underground.

(...)

http://english.aljazeera.net/NR/exeres/416F7BA6-90FC-48E6-8F4C-CA30FDD6EB39.htm

[salinen]

1. Jimmy Carter

warned us. Reagen ignored. Bush fucked.

[reorg]

2. oil reserve figures have been overstated (from the same author)

The elusive truth about oil reserve figures
By Adam Porter in France

Thursday 12 August 2004, 15:01 Makka Time, 12:01 GMT

Does OPEC's quota policy hinder disclosure of real estimates?

Talking about oil, there is little doubt that around 45-50% of it rests in five Middle Eastern countries - Iraq, Iran, Saudi Arabia, Kuwait and the United Arab Emirates. But how much is there of it?

(...)

Indeed it appears most of the governments and corporations no longer know it themselves, so often have figures been manipulated.

(...)

Shell's climbdown

Take two straightforward examples. The first is Royal Dutch Shell. One of the three super majors, this year Shell, as is well known, shed 23% of its reserves almost overnight. Around 4.48 billion barrels.

Just over 20% was in fact discarded in one day. If Shell were to pump their oil at the rate they are doing today, and if they were to discover no more oil in that period, Shell would run out of oil in a decade.

(...)


Kuwaiti's case

Our second example is a nation state, OPEC member Kuwait. The government says Kuwaitis "hold 10% of the world's total reserves". Yet in 1985 they were faced with a quandary.

OPEC decided to allow member countries to pump only a certain percentage of their reserves. The obvious point being the more reserves you said you had, the more you could pump. The more you could pump, the more money you earned.

So, overnight Kuwaiti reserves near doubled.

Again, Kuwait currently reports its reserves at 94 billion barrels. Yet it has reported its reserves at 94 billion barrels since 1992. Unchanged, each and every year. This is despite daily production and no significant new finds.

(...)

much more:

http://english.aljazeera.net/NR/exeres/8AEF2417-CBDF-4E99-A8D2-CAA5409C147E.htm