The keeper of "magaprojects" data spoke in Africa recently in his typical no-nonsense and undramatic style.  Among other aspects of his peak oil predictions are that exports will peak before production does and that "resource nationalism" (which I call "hoarding") an important factor in global oil supplies.  He also added a subtle feature to the peak oil concept: that oil may peak on a seasonal basis before it peaks completely.  We may be witnessing that phenomenon very shortly, if it has not already occurred. 

Here is the full report of his speech.

Doomsday scenario for oil
Michael Hamlyn
Tue, 18 Mar 2008

A gloomy forecast about the future of the oil industry — looking forward to a possible Doomsday within a very few years — was given to the Sub-Saharan oil, gas and petrochemical conference in Cape Town on Tuesday.

Chris Skrebowski, a researcher for the Energy Institute in Britain, told delegates that the oil supply will peak in 2011 or 2012 at around 93 million barrels a day, that oil supply in international trade will peak earlier than the oil production peak, and he forecast: "There will be supply shortfalls in winter before peak."

Skrebowski said that latest BP statistics showed that peak is already happening in some regions. "OECD production peaked in 1997 and has now declined by 2.2 million barrels a day (10.4 percent)," he said.

"Non-Opec, non-former Soviet Union production peaked in 2002, and has now declined by 771 000 barrels a day (2.15 percent). North America/Mexico peaked in 1997. North Sea — UK/Norway/Denmark peaked in 2000 and has now declined by 1.6 million barrels a day (25.4 percent)."

Producers are in decline

The figures show, he said, that around 28 significant producers are in decline, and that about 35 percent of global production comes from the decliners. Once that figure reaches 51 percent "we reach global peak oil", he said.

Peak oil will be earlier than most expect, Skrebowski told delegates. And he explained that global production falls when loss of output from countries in decline exceeds gains in output from those that are expanding.

And he cited eight key pieces of evidence that we are close to peak: a falling discovery rate; few large discoveries; ever more countries in sustained depletion; companies struggling to hold production; non-geologic threats to future oil supply; the current lack of incremental flows; few countries with real growth potential; the age of the largest fields; and sustained high oil prices

"The oil companies are already struggling to hold production," he said. "In the third quarter of 2007, only Total recorded oil production gains. For the last 12 quarters oil production has drifted down for the five super-majors; has flat-lined for the 10 largest quoted companies and has flat-lined for the 24 largest quoted companies. Quoted companies’ share of production is now declining, notably for the super-majors."

Non-geologic threats to oil supply

The non-geologic threats to future oil supply flows include resource nationalism in Russia, Venezuela, Bolivia and Ecuador, with perhaps more to follow; civil insurrection in Nigeria and Sudan; and cost inflation, ageing infrastructure, lack of skilled people, refinery constraints.

"How likely is improvement in any of these?" he asked. And he wondered: "Who will cap or ration production first?"

The world’s biggest oilfields are old, tired and fading, he said. Of the 120 largest fields, 50 are in decline, 44 not in decline, 12 unclear and seven are undeveloped. The average age of the giants is 42 years, but the 120 largest fields give 50 percent of total production and contain two-thirds of reserves.

Tags: energy investments

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