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One of the most momentous announcements was made on Nov. 12, 2005, but no one noticed. The field is Burgan, which is the 2nd largest in reserves and, now, the 2rd largest in production. Here is what was said recently by the oil optimists about Burgan:
"'Kuwait has produced an average of 2.1 million b/d in recent years, he said, However, the Burgan field, Kuwait's biggest, is mature and making water, so the Kuwait Oil Co. (KOC) would prefer not to increase production from it, he added. With proper investment, however, increased drilling should raise production capacity to an average of 3 million b/d by 2015." Hart's E&P Staff, "Middle East and Caspian nations can Help Meet Burgeoning Petroleum Demand by 2015, but Still won't Fill the Bill," The Future of the Energy Industry, Supplement to Hart's E&P October 2005, ed. by William Pike,, p. 15
Those who have access to the wildly optimistic IEA World Energy Outlook, quote it as saying:
Greater Burgan is expected to remain the single most important contributor to production throughout the projection period, but the share of smaller producing fields - such as Raudhatain and Umm Gudair- will rise. Excluding additional output through advanced technologies , Greater Burgan's output is expected to increase steadily to 1.6 mbd in 2015, and then decline sllightly to around 1.5 mbd by 2030. http://www.theoildrum.com/story/2005/11/14/03928/018
Yeah, right, 3 million in 2015, sure, and pigs fly!
Here is the Middle East Finance report noting the inability of Kuwait to maintain even 1.9 million bbl/day out of Burgan. So much for the wild-eyed optimists and their rosy views of the world.
http://www.ameinfo.com/71519.html
It was an incredible revelation last week that the second largest oil field
in the world is exhausted and past its peak output. Yet that is what the Kuwait
Oil Company revealed about its Burgan field.
Kuwait: Saturday, November 12 - 2005 at 08:46
The peak output of the Burgan oil field will now be
around 1.7 million barrels per day, and not the two million barrels per day
forecast for the rest of the field's 30 to 40 years of life, Chairman Farouk Al
Zanki told Bloomberg.
He said that engineers had tried to maintain 1.9 million barrels per day but
that 1.7 million is the optimum rate. Kuwait will now spend some $3 million a
year for the next year to boost output and exports from other fields.
However, it is surely a landmark moment when the world's second largest oil
field begins to run dry. For Burgan has been pumping oil
for almost 60 years and ac counts for more than half of Kuwait's proven oil
reserves. This is also not what forecasters are currently assuming.
Forecasts wrong
Last week the International Energy Agency's report said output from the Greater Burgan
area will be 1.64 million barrels a day in 2020 and 1.53 million barrels per day
in 2030. Is this now a realistic scenario?
The news about the Burgan oil field also lends credence
to the controversial opinions of investment banker and geologist Matthew
Simmons. His book 'Twilight in the Desert: The Coming Saudi Oil Shock and the
World Economy' claims that the ageing Saudi oil filed also face serious
production falls.
The implications for the global economy are indeed serious. If the world oil
supply begins to run dry then the upward pressure on oil prices will be
inexorable. For the oil producers this will come as a compensation for declining
output, and cushion them against an economic collapse.
However, the oil consumers then face a major energy crisis. Industrialized
economies are still far too dependent on oil. And the pricing mechanism of
declining oil reserves will press them into further diversification of energy
supplies, particularly nuclear, wind and solar power.
Geological facts
All this was foreshadowed in the energy crisis of the late 1970s when a serious
inflection in oil supply by the year 2000 was clearly forecast. How ironic that
those earlier forecasts now look correct, while more modern and recent forecasts
begin to look over optimistic and out-of-date with geological reality.
Nobody can change the geology, and forces of nature that laid down reserves of
oil and gas over millions and millions of years. Could it be that we have been
blinded by technological advances into thinking that there is some way to beat
nature?
The natural world has an uncanny ability to hit back at the arrogance of man,
and perhaps a reassessment of reality at this point is called for, rather than a
reliance on oil statistics that may owe more to political maneuvering than
geological facts.
We can ignore such things to our peril, but the reality is that the end of the
oil age is within sight. We are almost at Hubbert's peak. After all, when we realize that we took 150 years
to burn the first trillion barrels of oil, and that at current rates of
consumption it will take only 33 years to burn the second trillion, it doesn't
take a genius to know that we can't continue this for very long. Will be try to
burn the 3rd trillion barrels of oil in 5 years? No, there won't be any
commercial quantities of oil remaining.
I might add, that $3 million a year cited in the report above is a pittance. One well can cost more than this. This will get you no more than a 6 mile pipeline.