Peak Oil? What Peak Oil -- March 2, 2019

We talked about this just a few weeks ago: for investors, how to value a company based on reserves?

Rigzone weighs in.

The article doesn't answer that question. In fact, the article hardly addresses that question.

Instead, the article is about global reserves in general. Data points:

• current estimated global oil reserves: 1.7 trillion bbls
• global demand, about 100 million bbls/day
• doing the math: 45 years at current demand and no further addition to reserves
• since 1980, we've extracted about 950 billion bbls -- let's call it a trillion bbls -- and during that period proven oil reserves have soared by over one trillion bbls
• why peak-oil production is wrong: the US has had a reported oil supply lifetime ("reserves-to-production" of just 8 - 14 years reported every year since the end of WWII. This suggests we should have run out of oil many decades ago. Yes ,over 50 billion bbls and 12 million bbls/day, proven reserves and total crude oil production are the highest in US history
• why peak-oil production is wrong: there is little economic incentive to look for resources that will not be needed for many decades
• global shale and deepwater opportunities are overwhelmingly under-explored but will become more attractive as demand continues to mount
• most people do not know that 60 - 70 percetn of a reservoir's OOIP remains stranded after primary and second operations because it is so difficult to extract
• tertiary recovery -- CO2-EOR could be the next oil revolution in the US after shale

By the way, something to think about.

For decades oil companies have said CO2 is not an issue. Now they are changing their story. Sure, they are being forced into political correctness. But didn't this work out just great? All of a sudden CO2 will be needed for tertiary production.

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Canada 

Relaxing production cuts. Will bring more heavy oil to market just when it's most needed.

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China

Says massive shale oil reserves found in northern China. Doesn't amount to a hill of beans, yet, and won't for decades. But, then again, it will add to global reserves. See first article above.

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Venezuela

Colluding with Russia. Venezuela will move its European headquarters to Moscow.

Back in the USSR, The Beatles