Norway Prepares for a dry North Sea

Norway's once vast oil reserves in the North Sea are dwindling, and the government is facing tough choices when planning for the country's economic future.

Since oil was discovered on the Norwegian continental shelf in 1971, this small nation has been propelled into the world's third largest oil and gas exporter, and petroleum activities contribute 20% of the gross domestic product (GDP).

But now forecasts suggest the country's economic mainstay has started its inevitable decline.

More: http://news.bbc.co.uk/2/hi/business/3622129.stm

Per the article, this is the worlds 3rd largest exporter.

That's the mantra that we boomers keep hearing.. Maybe they invested their oil money in Enron stock :)

So, UK - 1999, Norway - 2002 or 2003 . . . who's next?

http://www.asponews.org/

Ghawar, its( Saudi's) largest field, to hold production as
high
as possible at the expense of accelerating depletion.
The
poor old lady really is coming to the end of her life.

It's not surprising that no one wants to pluck up courage to
tell the King that his wells are running dry. The fate of
such messengers is well-known, as the Shell
chairman discovered.

The real killer for the world's economy is not that Ghawar will run dry tomorrow. The killer is that they simply cannot increase production -- ie., they are getting as much oil out of Ghawar per day as is reasonably possible. (in fact, since they've been concentrating on keeping daily production high, they likely shortened the overall recoverable capacity of the reserve, but that's another story).

So if production levels remain the same (ie., Supply is steady), but demand increases (as it is, due to heavy economic development in Asia), what does elementary Capitalism say is going to happen?

We don't need to actually run out of oil to watch the price rise without end. All that has to happen is for production levels to remain the same. Which they have (if it hasn't decreased lately due to conflicts).

Because the period of steady flow (the asymptotic
point) will be so brief.

And increasing or maximizing production
means stranding oil pockets that cannot be
retrieved later.

I'm sure this is happening w/ Iraq's oil
fields as well. Maximizing production
decreases total amount recovered.

Like a can of ReddiWhip.

"And increasing or maximizing production
means stranding oil pockets that cannot be
retrieved later."

I know nothing of how these things work, so could you explain the above statement? Thanks! :)

...pumping water into an oil well causes the oil to basically get 'floated' out of the deposit (plus the pressure of the water forces it out). Remember that most oil deposits are not underground 'caverns', but more like loose rocks and sand that has oil in between.

However, since the oil does float on the top of the water, some of the oil will float up into areas of the deposit that will not get pumped out (whereas, without the water, the oil might flow out of those isolated areas). It's not that it's physically 'unrecoverable' -- but you'd need a new (precisely drilled) well to recover it, and it's probably not worthwhile to do so, both in terms of economics and energy-investment.

In addition, large amounts of water get mixed into the crude oil in the process, and that water must be removed, adding another fairly expensive (energy wise) step to it's refinement.

Stranded can mean:
1) too far away or
2)not enough in a certain area.

or
3) amount in question to be sacrificed to incoming horde (water)
in order to save(produce) the rest, pushed up the wells w/ water.

The oil reserves are dwindling, that's for sure, but it will take a generation or two before it's all over. New fields are still under construction and there is also a substantial amount of natural gas to be sold over the coming 30 - 40 years.

As for saving for a rainy day? You bet. Currently the funds on hand are approximately 70 % of GDP and still growing at some 10 % every year. Simply put Norway as a nation is the richest there is. (that is of course a relative measure since the amount is only somewhere between 120 - 140 billion dollars)

That is two countries that are in this situation. That leaves the U.S., Saudi Arabia, Canada, Mexico, Iraq and Venezuela and a few other players. Shell oil is saying that they have to close some of the processing plants in the central San Joaquin valley. The U.S. is also drying up. Two words: PEAK OIL

The story from Russia

Taking into account today's tempos of oil extraction, existing oil supply in Russia will last only until 2010, stated head of the department of fuel and energy resources and water works of the Ministry of Russian Natural Resources, Rinat Murzin.

http://english.pravda.ru/main/18/89/357/12490_oil.html

Our provincial government would have gone bankrupt several times were it not for the massive cushion of oil. There's no thought of an oil-dry future, no thought at all.

CALGARY, Alberta, Jan 2 (Reuters) - Alberta regulators
released a key geological study on Friday that will serve
as the basis for deciding how many natural gas wells companies will be forced to shut off to protect vast oil
sands reserves

Bitumen Conservation Requirements Affecting Gas Production in Oil Sands Areas

Page last updated: March 3, 2004

The EUB continues to be concerned about the conservation
of bitumen in oil sands areas of the province where the
bitumen is associated with an overlying gas zone.

http://www.eub.gov.ab.ca/BBS/new/Projects/GasBitumenPolicy.htm

"The Royal Dutch/Shell Group's oil production in Oman has been declining for years, belying the company's optimistic reports and raising doubts about a vital question in the Middle East: whether new technology can extend the life of huge but mature oil fields.

Internal company documents and technical papers show that the Yibal field, Oman's largest, began to decline rapidly in 1997. Yet Sir Philip Watts, Shell's former chairman, said in an upbeat public report in 2000 that "major advances in drilling" were enabling the company "to extract more from such mature fields." The internal Shell documents suggest that the figure for proven oil reserves in Oman was mistakenly increased in 2000, resulting in a 40 percent overstatement.

EDIT

Documents show that senior executives were told the calculations of reserves were too high in 2002, at least two years before the company downgraded its estimate this January.

EDIT

In the case of the Yibal field, for example, Shell and Omani oil engineers and auditors have expressed concerns that a technique Sir Philip said would recover more oil not only did not do so, but also increased the amount of water in the extracted oil to as much as 90 percent of the total volume, increasing production costs. "In Oman, Shell seems to have fumbled on technology," said Ali Morteza Samsam Bakhtiari, a senior official with the National Iranian Oil Company. Perhaps more ominously for the world's oil outlook, he added that the failure of Shell's horizontal drilling technology in Oman suggested that even advanced extraction techniques "won't bring back the good old days."

EDIT

and that plan is WHALE OIL!!

ramping up the whaling efforts:

Norway has set itself a catch quota of 711 minke whales for 2003, up from 634 killed last year.

http://news.bbc.co.uk/1/hi/sci/tech/2988322.stm

It all makes sense now, doesn't it?

.. to go the Dubai-way and work towards a tourism-based economy (granted, not on the same scale of course). After all, the nature is beautiful year round and a trip in & out of the varius fjords is nature at its best.

I can't wait to see the panic that is going to spread around the House of Saud when the princes & princesses are no longer able just to hop on daddys plane and fly to New York for a bit of shopping.

"My father rode a camel. I drive a Mercedes. My son flies a jet plane. His son will ride a camel." (paraphrasing)

They know they will run out eventually.