Presentation Transcript
Denver World Oil Conference The Peak Oil Context: Denver World Oil Conference The Peak Oil Context PETRIE PARKMAN & Co.
Thomas A. Petrie, CFA
Chairman & CEO
Petrie Parkman & Co. November 10, 2005
Slide2: World daily production: 84 million barrels/day
World excess capacity: 1-1.5 mmb/d (Refining capacity a determinant of “relevant capacity”)
US daily consumption: 21 mmb/day
Global annual decline rate: 4% - 6% / year?
Net Non-OPEC production likely to peak around 2010
OPEC nations may not reach governmental projections
Reasonable world peak oil date: 2010-2015?
Initial Perspectives and Assertions:
Slide3: Current World Production in Serious Decline (Millions b/d) -19.2 -28.9 -10.1 Conclusion: Depletion Matters
Slide4: End of Decade “Potential” New Production Sources Conclusion: Project Timing will be Critical
Slide5: Morphing Toward Peak Oil? Conclusion: Ex the Optimistic Case, There Remains Limited Supply to Accommodate Economic Growth (millions b/d)
Slide6: Source: International Energy Agency OPEC Excess Crude Production Capacity ? Conclusion: Absent a Global Recession, the Margin for Error is Small 56 63 60 67 70 77 84 Global Demand (MMb/d)
Slide7:
Maturing of Non-OPEC Production
In Decline:
United States
United Kingdom
Egypt
Pakistan
Congo
Norway
Australia
Oman
Columbia
Argentina
Gabon
New Zealand
Syria
Peru
Tunisia
At Plateau:
Mexico
Brunei
Malaysia
China
India (?)
Denmark
Yemen
Canada (conventional and non-Arctic only) Conclusion: Ex Caspian Sea, West Africa, and Unconventional and Arctic North American Sources, Non-OPEC Production Probably is Close to Irreversible Decline
Slide8: Discoveries precede extraction; a peaking in discoveries precedes a peaking in production
World oil discoveries peaked in 1964
In fields, basins, “provinces,” and the world: we tend to find the biggest oil structures early on
Today, we find 1 barrel for every 3-4 consumed
This concept is not disputed
Technology hasn’t changed this reality
Slide9: We found the most oil during the 1960s; production follows discoveries; technology hasn’t helped much 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 - 10 20 30 40 50 60 Billion bbl/year
Slide10: Global Natural Gas: Where are we headed? Source: China Newsphoto/Reuters/Corbis.
Slide11: Oil to Gas Convertibility per Futures Strip Conclusion: Fear of LNG, Unconventional Gas, Demand Destruction Lives! Nov-05
Oil to Gas - 5:1 Jan-08
Oil to Gas - 6:1 Dec-10
Oil to Gas - 8:1
Slide12: Conclusion: Dynamic Market Shifts in the Offing
World oil peak: range is broad by well-informed estimators; most by 2015: World oil peak: range is broad by well-informed estimators; most by 2015 Since 2000:
BP – 2010-2015
Hirsch et al: 2016
Matt Simmons: 2006 – 2008 (Bush team advisor/insider)
Campbell: 2007 – 2010
Deffeyes: Thanksgiving day 2005
Walter Youngquist: 2007 – 08
Slide14: 2005 Lower 48 Alaska Deepwater U.S. Oil Production Big, New Discoveries &
New ‘Technology’
...only shift the curve Lower 48 AK DW Why would U.S. Production Peak?
What about new discoveries like Alaska?
What about new technologies and investments? My Young Analyst Perceptions Source: rao-D cityworks