BP Says Oil Fields Declining

[chlamor]

BP says oil fields declining

by Reuters


NEW ORLEANS - Oil company BP's existing oil and gas fields are posting production declines of about 3 per cent, Tony Hayward, the company's chief executive for exploration and production, said on Wednesday.

"That piece of the portfolio as a whole is declining around 3 per cent," he told an energy conference.

The company's key profit centers, which exclude its stake in Russian TNK-BP and new output from Azerbaijan, are expected to produce about 2 million barrels of oil equivalent per day in 2005 and are showing different decline rates, he said.

"Alaska is mostly flat; the North Sea is declining somewhere between 6 and 8 per cent; and our South America business is growing, but taken as sub-segment of E&P, it's declining around 8 per cent," he said.

Energy analysts have pointed to sharper decline rates at producing fields as a key reason for rising oil prices, which hit record highs on the New York Mercantile Exchange on Monday.

http://www.nzherald.co.nz/index.cfm?c_id=3&ObjectID=10119220

[bridgit]

1. peak oil right on schedule...

[Dogmudgeon]

2. Post-peak oil at 8% decline per year

This is scary, because if it's even close to being accurate, the entire oil industry is in a steeper decline than anyone predicted. Here's a quote on the state of the industry from later in that same article:

Some industry participants have estimated that overall decline rates for existing producing fields could be as high as 8 per cent, forcing companies to aggressively drill for new supplies to keep production levels from falling.

Within six or seven years -- by 2011 or 2012 -- our demand will outpace our supply by 2:1. Let's hope that 8% figure is an error.

--p!

[slaveplanet]

3. Ya I trust BP

BP who's bought out Atlantic Richfield now controls over 50% of the north slope ...why the investment if it's declining, we've heard this scam before, why was so much money dumped into the pipeline recently if it's declining....BP needs a name change to BS...Why the record profits?

[Frederik]

4. Good points

The oil companies are a cartel, and they're perfectly aligned with OPEC through common intetrests. Doesn't mean the peak oil theories are bogus, just that scepticism is called for.

[Dogmudgeon]

5. Oh, it's worse than that

why the investment if it's declining ... why was so much money dumped into the pipeline recently if it's declining ... ?

Precisely because output is falling. They need to put more money in to get more oil out.

Why the record profits?

It's a death-spiral.

Within in a decade of Peak Oil or so, it willl be so expensive to pump oil that the oil companies will have to form a cartel, probably with OPEC. The cartel will make a lot of profit to pay their investors, but it will be a last-ditch effort to convert a few last drops of economically recoverable oil into money. The point at which the "EROEI" (Energy Recovered Over Energy Input), or physical profitability, of oil goes under 1.00, the whole petrochemical energy economy collapses.

Of course, the labor and consumer economy will have collapsed several years earlier.

When will this happen? If no effort is made to find new sources of "portable" energy (like oil is), it ought to happen within 10-15 years of "Peak Oil" -- which may have passed last year, or may be five years away.

--p!

[slaveplanet]

6. why all the money

for siesmic retrofitting? that makes a lot of sense if there'll be no more oil to go through that pipe in 10 years....not so long ago experts said there'll be none left by 2000. Why are they shipping that oil to Asia if there is so little of it left? wouldn't this alarming news be cause for national security issues? enquiring minds want to know...

The only thing I find alarming is why the British are allowed so much control over our energy supplies in the first place...didn't we kick their pommie behinds out of here once already....yet people hang on their every word like it's gospel...

[Dogmudgeon]

8. Answers (actually, informed guesses)

There IS more oil left. As oil becomes more expensive, it becomes more profitable to spend more money to recover it. That only ends when EROEI goes below 1.00.

They ship it to Asia because they can get more money for it in Asia. Plus, it costs less to ship it there. It actually costs more to ship it to one of the West Coast refineries.

It's not really a national security issue for the same reason why the fact that BP is British is irrelevant. The stockholders are multinational -- BP just keeps the books. This is why cartelization "works" for the upper class. Money can be made in situations where the market would produce a loss. As supplies shrink, profits will be kept high by consolidations, acquisitions, and cartels. It will be distributed by the Free Market (sic).

Anything you have heard about "national security" is nonsense when it comes to our trading partners. It's like having an affair with a serial killer. As long as you keep fucking, you stay alive. Once you stop, you're vulnerable.

The only positive aspect is that BP is a lot more honest than most of the oil companies. So it's often used to break bead news, to gauge the reaction of the market. Announcing an 8% drop in recovered sweet light crude is the kind of thing BP excels at. If it produces too harsh a drop in the price of its shares, the other companies know exactly how to calibrate their own bad news -- and BP's stockholders know full well that the good faith and credit of Merrie Olde will be used to prevent BP from going belly-up.

It's a scam, but these days, it's moving from scam to survival. From here on in, the pressure is on. And if we don't have some kind of back-up in place by the time EROEI hits the magic number, we're sunk. For good.

--p!

[BeFree]

7. We are getting ripped off.

They don't own the oil, anymore than they own the air or water. Yet we fucking idiots have let them bend us over and rape us for what is essentially a birthright.

Fine, we may be at peak oil, but that is still no reason for us getting screwed. We've got to get mad... if we don't they will know they can do whatever they want.

[chlamor]

9. We are running out

of time. 2/3rds of the earths natural resources are gone. Seems alot of folks are satisfied with negotiating the terms of their slavery. You seem not to be.Hurrah. As a material fact they do own it all including you and me. In a deeper sense they own nothing as nothing can be owned. So we do every little bit to regain our dignity. Take it back.
Anger is a virtue.

Ya Basta!

[hatrack]

10. VERY.IMPORTANT.STORY

Uh, this is a big one, folks. Ignore this at our peril.