Posted on 06/11/2004 11:41:07 AM PDT by RussianConservative
Russian oil major LUKoil announced reserves in Russia's sector of the Caspian Sea may compose total 33 billion barrels of oil equivalent.
LUKoil vice president Anatoly Novikov said the company had discovered five offshore fields in the sector of the Caspian Sea in recent years and planned to start producing by 2008.
LUKoil, which has the world's second biggest oil reserves among private oil majors after U.S. major ExxonMobil, has in the past delivered conflicting estimates of its Caspian fields.
The firm has said the majority of fields contained gas, which is very difficult to ship out from the land-locked sea due to limited market interest in neighboring states except Turkey.
Russia remains one of the few places in the world where oil majors can still book huge reserves, but investors usually focus on Siberia, rather than the Caspian Sea.
The Russian sector of the Caspian Sea is considered to be less explored than Azerbaijan's or Kazakhstan's because LUKoil only began working on it at the end of the 1990s.
Sure, but the liklihood of rising prices will create them. When whale oil was running out, there was no government program to create oil refineries. The market created them. Same thing will happen here.
They will try to make it happen, but time is limited, and investment money is also limited. There could be several bad years followed by a more peaceful and less robust economy. Really bad years.
My point being: This is standard supply and demand stuff. When the price goes up, more supply comes on line. The difference here is that for some unknown reason, when it comes to the oil market, people assume that because they can't predict 100% where this supply will come from that it therefore won't come.
I just learned of the abiotic idea from a Slashdot post back in December. I had never heard of the idea that oil is generated by non-organic geologic processes, rather than from dead dinosaurs. It seems (from my afore-mentioned Google search) that there is a scuffle between proponents of the two theories. If oil is generated abiotically, and oil fields can refill (as the abiotic theory apparently predicts,) then this has obvious ramifications for the Peak Oil model.
Gentlemen, to your corners. :)
Of course, any mention that oil might not involve dead dinosaurs runs the risk of igniting a crevo thread...
Then why does it seem that I am always drawn to click on those threads? :)
Perhaps, but what you are saying is that the market for oil is broken. Normally, as a resource becomes scare, the price increases as the scarcity becomes more acute. I.E., everyting does not just kick along fine until one day the resource doesn't exist anymore. The price starts to go up in both the spot and the futures markets before the resource runs out. These are the price signals that tell people to start committing assets to new supply.
The idea that we are going along fine, and then one day all hell is going to break loose, and that then and only then will people think about how to bring along new supply suggests that for oil, unlike every other item in the market, the market is broken - and that the spot and futures prices are not giving correct signals to the market place.
The other implication here is that if you think that, then you ought to be buying oil futures, as they are trading less than the spot price. That is, the market thinks that oil prices are going to go down in the future. If they oil market as a whole is wrong, then you stand to make a lot of money.
The more likely situation, imho, is that all of the journalists and the internet jockeys don't think that there are any prospects for increased supplies because the government isn't in charge of talking about them, and that in reality there are literally tens of thousands of people with their own plans to bring new energy supplies to market when the time is right. I know that If I had a good idea to profit as oil prices rise, I sure wouldn't be telling anyone about it.
Peak oil theory sort of is based on the fact that oil will begin running out quickly, the price will spike, and suburbia is doomed. However, proven reserves are still pretty high, and once oil does start to get more expensive, people will voluntary use less of it. Alternatives will become palatable. Vegetable oil and wind, sure. But also the oil pits in Alberta and shale oil. And once oil prices go up a bit more -- which may take a while -- you'll have nuclear not look so bad.
There are 20 year old plans in the archives at companies like Kellogg, Brown & Root. I'd guess about a year and a half or so to get something built and product flowing.
Peak theory and round table individuals have a vested interest in their doom and gloom forecast. Take it with a grain of salt.
Oil comes from great depths, but we can draw down the pools about a zillion times faster than they fill up. So the debate is of academic interest. Coal is a different story since we can see that it forms from vegetative layers on the surface. There is a lot of coal of various grades.
Yes, oil futures seems like a good gamble, but as with all futures will the price change as quickly as you need?
Yes, suburbia looks kind of iffy. This could relate to the housing bubble.
Haliburton will be very busy. About 1/3 as busy as SLB.
If they are right, no one will profit. All that can be done is ease the descent. At best. If they are wrong then nevermind.
Somebody ought to. Like standing sentry, somebody better keep an eye out. :)
Not yet. There are three years, worst case. Watch China-- last year China increased imports of oil and metal immensely, this year again, and next year they intend to continue the increase. For world production to increase, Saudi being at max right now, the less profitable fields will have to be hit and it all adds up to more oil cost.
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