Re: Energy Policy / Junk Science Environmentalism

From: <>
Date: Thu Dec 22 2005 - 16:35:52 EST

Dont confuse an individual company's production increase with global production. I know a company in the UK whose production and reserves climbed over the past 5 years, while the UK as a whole lost 40% of their production capacity. Don't confuse one oil company increasing production with a delay in global production.

Secondly, the list is for 6 fields not four.  But five those fields are in West Africa,  four are specifically on specifically on Block 14 of Angolas concession to Chevron.  West Africa, Brazil, and Kazakhstan are the only places in the world which are scheduled to increase production. Chevron is a major player there. But the Middle East will probably decline. Oman is declining rapidly, Kuwait seems poised to decline, few believe the Saudis and the Iranians are running headlong into nuclear because their fields are declining.  The Saudi's may temporarily increase production. Everywhere else is in decline or at plateau. 

Chevron is one of  luckier companies in owning part of Block 14., but lets see if they can achieve that 3 million barrels.  2004 oil production was down 5% from 2003 for them. Natural gas production was down 8% for them and oil equivalent production down 5%  That is going the wrong way for that 3 million bbl/day goal. And that 3 million is OIL EQUIVALENT.  Now, Benguela, one of the fields that they mention on that list is just now starting production.  They do say they expect the projects to add 850,000 net barrels per day to their bottom line, But that tells you a bit about Chevron's decline curve. They have to add 850 to add 500 over 4 years. And I can tell you that there has to be more to it than just these 4 fields. They will add barrels from all over the world.

On Thu Dec 22 2:00 , "Don Winterstein" sent:

Chevron's 2004 Annual Report (published 3/05) has some relevance to big-oil execs' opinions on the future of oil production.  In his introductory letter CEO Dave O'Reilly states, "We are...building a world-class portfolio of capital projects...[lists four].  All of these...are scheduled to come online over the next four years, contributing to our oil-equivalent production goal of 3 million barrels a day by 2008."  Chevron production averaged 2.5 million barrels a day in 2004, so this would be quite an increase.  According to Don Paul, Exxon is even more optimistic about the future than Chevron.  If this exec optimism is justified, it won't of course eliminate the apparently unavoidable supply crunch, but it may defer it several years. 
However, the same Annual Report shows Chevron's worldwide production declined monotonically since 2000.  So do we believe the trend in numbers or the industry execs?  We'll just have to wait and see.  But perhaps this optimism explains the apparent relative complacency of some industry execs. 

Received on Thu Dec 22 16:41:25 2005

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