Jean Laherrere has posted the following charts and comments on Bakken and World oil reserves.

EIA proved reserves on Bakken (ND +Montana) plus  cumulative production have changed at end :

-2012   3754 Mb
-2013   5701 Mb
-2014   7203 Mb
-2015   6671 Mb

As shown in this graph in red squares, together with HL ultimates, USGS estimates and cumulative production.

ThisEIA CP+RR value (which is assumed to trend towards the oil ultimate) has increased sharply from 2012 to 2014 and has decreased in 2015 (this decrease may continue towards which value?).

Proved reserves depend upon the oil price.

Its variation indicates that its reliability is poor:

No one knows how to estimate unconventional reserves as LTO because there is not enough historical series to verify if the method is right.

EIA reports Bakken reserves only since 2011.

Unconventional oil reserves are in unconventional reservoirs under unconventional trapping (no conventional water oil contact).

There is no world consensus on oil reserves definition with 4 different definitions:

-SEC with audit for IOCs listed on the US stock market forbidding to publish probable reserves.
-OPEC without audit for OPEC members excluding condensate and NGL.
-ABC1 = Russian definition relying on the maximum recovery.
-SPE-PMRS (Petroleum Reserves Management System) used by IOCs to estimate the Net Present Value before deciding the development of oil project.

Proved reserves are:

-Either financial being audited following SEC rules by IOCs.
-Or political being unaudited for OPEC members.

World proved reserves vary with sources, showing that they are unreliable, in particular BP 2016 is different from BP 2016.

jean-2

The most important graph is this remaining oil reserves from political/financial and technical reserves, showing the discrepancy between the published data  (proved reserves) and the confidential 2P (proved plus probable) data.

jean-2a

The aggregation of proved field oil reserves largely underestimate the proved reserves of the country or of the world: it is incorrect to make an arithmetic addition, only aggregation of mean reserves is correct.

In the Gulf of Mexico BOEM has decided in 2011 to report GOM oil reserves under 2P, dropping the proved reserves estimates: BOEM is not obliged to follow SEC rules!

Everybody knows that world oil discoveries are well below oil production since a long time ago and that remains reserves should be decreasing.

Proved reserves increase by adding tar sands &  extra-heavy reserves (Canada and Venezuela) in the 2000s when they were in production since 1967 & 1979.

jean-3

Annual crude  less extra-heavy oil 2P discovery has peaked in the 1960s and annual production is peaking now.

jean-4

Proved reserves is a very poor practice, but pleasing bankers, shareholders and operators because leading later to growth reserves because its wrong aggregation!

Proved OPEC reserves are plain political shows, without any connection with reality.

During the fight for quotas between OPEC members from 1985 to 1989 300 Gb of so called proved reserves were added which were described in 2007 in London by Sadad al-Husseini (former VP Aramco) as speculative resources.

Best regards
Jean
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The new December OPEC Monthly Oil Market Report is out with crude only production numbers for November 2016. All charts are in thousand barrels per day.

opec-14

OPEC crude only production reached 33,870,000 barrels per day in November. This includes Gabon. Since May, OPEC production has increased 1.372 million barrels per day.

secondary-sources

Net oil importer Indonesia leaves OPEC, again

Indonesia has suspended its membership of the Organization of Petroleum Exporting Countries (OPEC), after the oil cartel decided to cut total crude-oil production by 1.2 million barrels a day.

The decision came as the cartel agreed its first oil output cut since 2008 in a bid to tackle overcapacity and prop up prices.

Indonesian Energy Minister Ignasius Jonan said the country was told to lower its output by 5%, or 37,000 barrels per day, but that it could only afford a reduction of 5,000 barrels.

OPEC is still including Indonesia in its MOMR but they will likely be dropped next month.

Note: When a country is either added or dropped from OPEC, their historical production is also added or dropped. Therefore there is never a sudden increase or decrease in OPEC production due to a country being added or dropped.

iran

In November Iran showed the first down tick in production since June 2015.

iran

Iraq’s production was up 97,000 bpd in September and another 89,000 bpd in October but was almost flat in November. Iraq, like everyone else in OPEC, is positioning themselves for an OPEC cut in oil production. So they are producing every barrel possible in order to still produce as many barrels as possible after the OPEC ordered cut.

kuwait

Kuwait has recovered from the problems they had in April but took a hit in November, down 51 thousand barrels per day.

uae

The UAE was down 19,000 bpd in November and is now back below 3 million bpd.

saudi-arabia

There can be little doubt that Saudi Arabia, and every other OPEC nation, is producing every barrel they can possibly produce. They have all made “heroic efforts” to get production as high as possible before the cut.

Opec has agreed to a 1.2m bpd cut at the end of November. Also 11 non-Opec members including Russia agreed to cut their production by around 550,00 barrels per day.

That cut would put OPEC production at about 32,700,000 barrels, about the average for the first half of 2016. But then Nigeria has vowed to raise production by 500,000 bpd. That would put them at about 2,300,000 bpd, a level they last saw in early 2006.

My opinion, for what it’s worth. Expect less than one million bpd cut from OPEC and no cut whatsoever from non-OPEC. Anything more than that will be due to natural decline rather than any deliberate cut.

world-oil-supply

World oil supply has now surpassed its November 2015 peak. However the 2015 average is still above the 2016 average.

Updated charts of all OPEC countries can be found at: OPEC Charts

 

 

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