The Clock is Ticking...

World oil output struggling, say Arab experts

LONDON, Oct 30 (Reuters) - Leading figures from the Middle East oil industry added their voices on Tuesday to those warning that the world is struggling to sustain rising oil production.

"There is a real problem -- that supply may not be possible to increase beyond a certain level, say around 100 million barrels," Libya's National Oil Corporation chairman Shokri Ghanem said at an industry conference.

"The reason is, in some countries production is going down and we are not discovering any more of those huge oil wells that we used to discover in the Sixties or the Fifties."

Sadad al-Husseini was a key architect of Saudi Arabian energy production policy for more than a decade whilst a top official at state oil firm Saudi Aramco. He was even more pessimistic, saying world oil production had already plateaued.

"We are already three years into level production," Husseini also told the annual Oil & Money conference, a gathering of top executives.

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Key findings
• “Peak oil is now”.
For quite some time, a hot debate is going on regarding peak oil. Institutions close to the energy industry, like CERA, are engaging in a campaign trying to “debunk” the “peak oil theory”. This paper is one of many by authors inside and outside ASPO (the Organisation for the Study of Peak Oil) showing that peak oil is anything but a “theory”, it is real and we are witnessing it already. According to the scenario projections, the peak of world oil production was in 2006.

The timing of the peak in this study is by a few years earlier than seen by other authors (like e.g. Campbell, ASPO, and Skrebowski) who are also well aware of the imminent oil peak. One reason for the difference is a more pessimistic assessment of the potential of future additions to oil production, especially from offshore oil and from deep sea oil due to the observed delays in announced field developments. Another reason are earlier and greater declines projected for key producing regions, especially in the Middle East.

• The most important finding is the steep decline of the oil supply after peak. This result - together with the timing of the peak - is obviously in sharp contrast to the projections by the IEA. But the decline is also more pronounced compared with the more moderate projections by ASPO. Yet, this result conforms very well with the recent findings of Robelius in his doctoral thesis. This is all the more remarkable because a different methodology and different data sources have been used.

The global scenario for the future oil supply is shown in the following Figure 7.



The projections for the global oil supply are as follows:
- 2006: 81 Mb/d
- 2020: 58 Mb/d (IEA: 1051 Mb/d)
- 2030: 39 Mb/d (IEA: 1162 Mb/d)

The difference to the projections of the IEA could hardly be more dramatic.

• A regional analysis shows that, apart from Africa, all other regions show declining productions by 2020 compared to 2005.

By 2030, all regions show significant declines compared to 2005.