Meet Manifa (And Other Giant Oil Projects) That Will Add To The Global Oil Glut
World oil consumption is more than 90 million barrels a day. Between 2009 and 2014 oil was traded for about 110 dollars a barrel; now oil is changing hands for 32 dollars a barrel. Roughly a 7-billion-dollar cash flow a day is vanishing from the global market.
Norway’s sovereign wealth fund that has accumulated a stake of 4.5 billion dollars in Apple over the past years, will turn from an Apple buyer into an Apple seller.
The China Development Bank (a Chinese policy bank) has poured nearly 50 billion dollars into Venezuela in return for oil, with the country now collapsing under the Chinese debt, having no other choice but to drill for more oil.
These are just some of the challenges the world is facing in 2016 as oil prices are heading towards 20 dollars a barrel.
Speculators and manipulators were able to manipulate the oil price to more than 120 dollars a barrel, with the production cost being roughly between 20 and 80 dollars. With a huge profit margin the world was digging for more and more liquid gold.
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Kashagan: The $50 Billion Oil Development That Doesn’t Work
Shell, Total S.A., Exxon Mobil and China National Petroleum Corporation are now stuck with a 50-billion-worth project in the Caspian Sea, called Kashagan. The project is full of problems and delays, but is expected to add 300.000 barrels of oil a day to the global oil glut the coming year.
The field is developed by the international consortium under the North Caspian Sea Production Sharing Agreement. The Agreement is made up of 7 companies consisting of Eni (16.81%), Royal Dutch Shell (16.81%), Total S.A. (16.81%), ExxonMobil (16.81%), KazMunayGas (16.81%), China National Petroleum Corporation (8.4%), Inpex (7.56%). The initial production is expected to be 90,000 barrels per day (14,000 m3/d). It should reach a production rate of 370,000 barrels per day (59,000 m3/d) Source Wikipedia
Prelude
2016 will also be the inauguration of Shells Prelude, the world’s first floating liquefied natural gas platform as well as the largest offshore facility ever constructed. We expect the media to give limited coverage to its inauguration.
Prelude FLNG is the world’s first floating liquefied natural gas platform as well as the largest offshore facility ever constructed. Prelude FLNG was approved for funding by Shell in 2011. Analyst estimates in 2013 for the cost of the vessel were between US$10.8 to 12.6 billion. Pressures from an increase in the long-term production capabilities of North American gas fields and increasing Russian export capabilities may reduce the actual profitability of the venture from what was anticipated in 2011. Source Wikipedia
Manifa
While the media attention was directed to the shale oil boom in the US, the Saudis created a giant offshore oil project called Manifa. With one single project Manifa added 1 million barrels a day to the world oil glut. Manifa will expand its capacity the coming year, adding a further 500 million barrels a day to world markets.
The project is part of the development of the Saudi oilfields, which are expected to see an increase in production to over 12.5 million barrels a day from 11 million barrels a day. The first phase of the project began production in April 2013. The field produced 500,000bpd by July 2013. It will produce 900,000bpd of crude oil once fully completed by the end of 2014. Additionally, there will also be production of 90 million standard cubic feet per day of sour gas, 65,000bpd of gas condensate, and water. Source Offshore Technology
There are plans to extend the project with a further 500 barrels a day capacity.
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ZH: With global storage levels at their limit, these massive projects (and their sunk-cost desperation for cash-flow) will add already extreme pressure an over-supplied market in which, as Morgan Stanley notes, "oil has no intrinsic value."
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xaxaxa
You are good Tyler.
Well, titty milk prices are still outpacing crude..http://hedgeaccordingly.com/2015/07/americans-paying-400-times-more-for-...
Not an oil expert but this has to be a misprint:
... adding a further 500 million barrels a day to world markets.
Perhaps they meant 500 million per year?
People who don't have a solid conceptual understanding of math make those kind of mistakes...
yes, they mean per/year..
No, additional 500,000 bpd on top of the 1 million bpd, so 1.5 million barrels per day from this oil field.
Methinks disruptions will be the orders od the days ahead.
So what's the big deal. It's good for the consumer. Sucks for Middle East warmongers creating chaos to jack prices up amongst other things => >> http://wp.me/p4OZ4v-2g9
Enjoy it now. By 2030, no one will be drilling new wells. And don't forget that existing oil wells around the globe deplete at about 4-6% per year.
And MEOR helps offset the depletion.
http://www.che.ncsu.edu/ILEET/CHE596web_Fall2011/resources/petroleum/EOR...
Lots of technology helps offset depletion, but not prevent it. Nor is this technology free.
The lag between investment and production does look to be creating an exisquisite opportunity, 2017 at the latest I would guess, but todays prices at the minimum look like they will offer a profit in the longterm.
So the excess production drives out the smaller players (and some large ones), raises merry old hell with the GDP of target countries and in the end, who is king?
Also, I am a firm believer that oil is not dinosaur fat. The earth is quite a pressure cooker and has a lot of Carbon, Hydrogen, Oxygen and Nitrogen locked in the crust and mantle. It is a solid bet that those elements are cooked and distilled deep down and then via geologic/seismic activity (fractures/faults), the fluids/gas collect in the underlying strata which has natural impermiable pockets/storage (if you will). It certainly does take time for this to occur. There are also microbes deep down that add a helping hand in many cases.
When you can't accept the science, your last refuge is belief. Firmness of belief is a religous characteristic and it gives you standing amongst your peers in the religion.
Do bacteria pray too?
They certainly fart alot.
Jeezus, you fuck tards are stupid.
What god damned difference does it make HOW oil is made? The only thing that matters is how close it is to the surface, and can it be mined economically. If the entire core of the earth was a giant oil tank, there would still be no way to get it without spending more money than it's worth.
Okay? So now you can stop this idiotic religious war over how oil is made.
Theory is the best anyone can do in terms of explaining how oil is created. Not dissimilar from the God/no god argument, there is belief without proof both ways. . . Maybe I'm missing the science that proves how oil is created. . . Or are you the one missing something?
Scientists don't believe and can't be wrong? There are those who believe that we are at peak science and nothing more can be learned. Anyone who questions the belief of today's scientists is considered anti-science. So having a closed mind is considered having an open mind. Welcome to 1984.
Oh scientists definitely do have beliefs; one of the most popular currently is that climate change is caused by man and can be cured my more taxes.
But, but this can't be the great Xspurts have told us world production has peaked.......!
Ever heard of biofuel? Heat and pressure is used to convert organic matter into fuel, dontcha know.
Now tell me how there are oceans of oil on Saturn's moon Titan.
Abiotic Oil theory ? Some believe that oil could be infinite and even carbon neutral !
Of the 42 largest oil producing countries in the world, representing roughly 98% of all oil production, 30 have either plateaued or passed their peaks.
World oil production data varies, depending on the database. Also, the definitions of “oil” differ from source to source: Some count only conventional crude plus lease condensates, while others will include natural gas liquids and unconventional sources such as synthetic oil made from Canadian tar sands, biofuels, and other liquids. Finally, reasonable observers may differ as to whether a given producer has plateaued, or might yet see a second production peak. However, these differences are negligible in the context of the global production outlook.
Here are two views of the world’s top oil producers, with the peak production dates of each country.
The Oil Production Story: Pre- and Post-Peak NationsA compilation of the production data for the world’s top 50 producers, using data from BP and the Oil and Gas Journal, with peak dates and trend analysis. Compiled by Steve Andrews and Randy Udall. Last updated June 2010 with 2009 data. (PDF)
All OPEC Producers Plus Top 30 Non-OPEC producersOf all the non-OPEC producers, only 30 have significant production (over 100 thousand barrels per day). This is an analysis of the EIA data for those top 30 non-OPEC producers, plus all 12 OPEC producers, up through 2009. Of these 42 largest oil producing countries in the world, representing roughly 98% of all oil production, 30 have either plateaued or passed their peaks. Compiled June 2010 by Rembrandt Koppelaar (non-OPEC) and Chris Nelder (OPEC).
from peak-oil.org
how does that modern middle east history go again?
Yet oil production keeps climbing every year nearly 100 years after the first alarmist cries of Peak Oil in 1920.
500 million barrels a days? I don't think so.
Please check your units, Mr. Durden.
I thank that should have read 500 thousand bpd
but it was fun thinking about....get the Chinese to dam the Straight of Hormuz, pump all the water out of the Persian Gulf, and just fill it all with oil. (ps...sorry if you were one of the worlds biggest fools who bought property on one of those fake islands)
And another one
Oil has no intrinsic value? You can burn it to keep warm.
neither do dead soldiers apparently
It's the end of cheap oil! ... NOT
If that doesn't keep Greenpeace busy.../s
OMG! The world has 14 days in storage... glut indeed.
Now factor in the 7% minimum depletion of existing oil production, and we have at best one year of previous oil investment paying off before depletion outstrips production growth, at some point we need to pay enough to maintain production and $40 a barrel isn't nearly enough.
Sure would be interesting to have heard Matt Simmons take on all of this.
I know of the Matt Simmons incident regarding his untimely demise in a hot tub in Maine. I also knew of a reporter and financial analyst who 'committed suicide" in Maine after exposing what the wind industry was up to... Both knew that the offshore wind projects were to leverage oil/mineral rights (offshore) on the east coast. Fisheries may have also played a part in this fiasco.
Water shooting out of ghawar, blah blah blah
http://www.bloomberg.com/news/articles/2015-07-19/fuel-feud-pits-saudis-...
Ghawar is the world’s oil spigot. It’s the biggest conventional field in the world’s biggest-producing country, Saudi Arabia. Statistics about Ghawar—a narrow, deep deposit in porous limestone—are a state secret. The best guess, according to Rasoul Sorkhabi, a geology professor at the University of Utah, is that the field accounts for about 60 percent of Saudi oil.
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So there is the target.
http://tle.geoscienceworld.org/content/20/7/706/F3.large.jpg
He would have said price hypersensitivity is symptomatic of a resource in decline. Increased demand on fixed resource = price goes up, chokes out wider usage due to higher costs, stalls global growth, price contracts, global growth resumes, but lower than before. Production capacity that was geared for higher costs now pumps frantically to deliver yield in the new normal. . . but can't, in fact extra supply drives price even lower, hastening the next leg down. Think of your lawnmower sputtering when you mow on along the slope - the fuel feed drops, engine sputters. You reach the end of the row, turn around, now plenty of fuel feeding into the line, engine is great. For now. (Alternative view sidebar: Why'd they pump and store all that oil anyways? It's almost like someone is stocking up for conflict.)
I'm glad U.S. finally began exporting oil again after all these years so they can contribute to the glut too! Don't wanna be left out. Does Saudi know what you're doing?
People forget that while we focused on marginal oil plays like fracking and tar, where much money was invested. The conventional oil players have been pouring much, much larger capital expenditure into keeping their conventional production powers high. The figures dwarf Fracking and Tar. The conventional producers invested to make sure they would maintain their power to be the producers. Now it is their low cost oil that sets prices, not the far out end of the price curve where Frackers sit. Low prices for some time to come.
"FRACKING' was invented to rejuvinate older wells and has been arounf for a long time. I have an aquaintance that talks about the Saud 'fracking' in the late '80s and '90s. This article is interesting as the speak if IPO ARAMCO floats. That IPO will obviously not this off shore company.
500 million barrels A DAY? The entire world currently only uses 90 million a day. Are they expectign WWIII? Oil will be back at $ 3.00 a barrel if this ramps up. It must be a misprint. Surely they mean 500 thousand a day.
Lots of number issues -- author touts 'expansion' to raise another 500 barrels per day? Really?
Every oil play on the planet is still trying to expand. Every moron that works in oil thinks that a huge, massive spike in oil prices can only be a few short months away. Because of these two things, oil supply will continue to outstrip demand for the foreseeable future.
A lot fewer people working in oil these days.
Ho Li Fuk, In other words, I should make the transition from OSV Engineer in the GOM, to running Chief Engineer on Saudi Yachts...
Several years ago I called my broker and told him to sell Suncor Oil. It was around $80 a share. He told me I was nuts, the oil story is baked in. When I told him I might buy it back at a lower price he asked what I wanted to pay. I told him I would probably consider around $40 a share. He replied, "You will never see Suncor at $40 a share in your life time!" I bought some again around $28 and got scared out around $32. Now it is $22 and I am not yet if ever interested again.
Gotta wait and see how this huge debt bubble and peak fraud settle out before I get back in to some things for the long haul. It is going to be a scary time for the next few years. I'm going to duck and cover most of the time.
My favorite stories are the one where the narrator never loses.
I used to tell those ones myself.
5.5 Billion Barrels of Reserves:https://en.wikipedia.org/wiki/Kearl_Oil_Sands_Project
North America doesn't need Wahhabi-Terrorist-HeadChopper Oil.We've got enough ourselves without supporting the Saud Family nutcases.
I plus oned ya for your collectivist "We've", you commie dreamer you.