Posted on 04/12/2008 7:20:50 AM PDT by kellynla
The world is now in a period of sky-high oil prices that will last a long time—probably until 2020, according to the world's largest investment bank. Senior analyst Gioavanni Serio in Goldman Sachs, visiting Norway, told participants in an energy seminar that the oil industry moves in 20-year cycles, reports finance industry newswire E24.
The price for American raw oil rose to a record-high USD 112 per barrel this week after new figures revealed a surprising decrease in storage the week before.
Brent oil from the North Sea also rose to new highs, selling for USD 109 per barrel.
In the long-term, oil prices reflect marginal costs to the oil industry," said Serio at a yearly energy seminar held by Wilhelmsen at Lysaker outside of Oslo. "The oil price and marginal costs stayed low in the 1990s. Now that it has become far more expensive for the oil producers to retrieve oil, the price is going to rise correspondingly," he predicted.
The Goldman analyst does not think oil demand will increase significantly but he pointed to "bottlenecks everywhere". He said: "Oil companies are lacking professionals and rig rates have exploded from around USD 100,000 per day in 2002 to USD 500,000 per day this year."
Serio expects oil prices to fall in the short-term, to about USD 90 per barrel, but said it is "unrealistic" that the price would fall under USD 70 per barrel in the coming years. By the end of 2008, he expects the price to be well over USD 100 per barrel.
However, not everyone shares Goldman Sachs' bullish predictions. Italian oil giant ENI's CEO Paolo Scaroni said last week he believes oil prices will fall as a result of increased production.
"We expect the oil price to fall to USD 50-60 per barrel, a price that will provide for global growth," said Scaroni in an interview on Italian TV.
The Norwegian economy has boomed on the back of soaring prices for Norway's oil and gas amid a general world economic downturn.
I'd forgotten about the racial apologist/revisionist crowd and their use of 'heritage' as yet another excuse for curtailing crude and mineral production. Next time, I'll include this lot right along with the environazis. Thks for the reminder.
Thanks but since we don’t live our lives and/or operate our business based on the Mayan calendar; I couldn’t care less about it. LOL
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Do you believe everything you read and consider it fact?
There have been lots and lots of threads posted RIGHT HERE on FreeRepublic regarding new oil finds and new energy technology breakthroughs. Go find them yourself. I don't "feed" lazy people.
I’ve only been in this business for about 35 years, there must be something those like me have missed.
Did you know that most major breakthroughs comes from those on the OUTSIDE? Yes it's true. The "insiders" usually have blinders on "Yup... can't be done..." or "we've been doing it like this for 35 years..."
Good God! Have you lived in a cave the LAST 50 years?! 50 years from now, we'll have micro size nuclear reactors powering our homes and cars. Devices will use micro fractions of the energy they use today. You'll say "oil" and kids will say "Huh? What's that grampa?"
Wake Up and smell the advancing technology.
Not a day goes by without at least a few threads getting posted related to energy related breakthroughs. More oil found, more ways to extract oil, more ways to convert substances 'X' to fuel, more ways to produce increasingly energy efficient devices, more ways to produce solar energy cheaper, and on and on and on.
If there have been lots of advances in alternative energr sources lately then great; I just don't seem to hear about them, and I think many others would agree with me on that point. In fact, the only real alternative to oil that I have heard about is ethanol, which as we are learning is a disaster on many levels!
I'm not talking about ''100 mpg carburators'' and such, but about new and proven approaches to producing crude and equivalent.
Nor am I discussing all the magic ''saviors'' of solar, wind, geothermal, and hooking up hoses to the ani of cows.
Save your little lecture for the nutball crowd, please. I trade energy for my living, and understand at least parts of that mkt quite well, thank you.
What specifically did I say that was for the "nutball" class and the target of your smart ass reply?
But that is mostly in Elm Coulee, and although I have done nearly 50 wells there (in that field), they have been for one company only.
Other areas and operators may not fare so well, (The one I work for is having good results in ND, too, and I have worked some of those wells as well). Some will do better, and a lot depends on the steering, production strategy, and even drilling fluid, and the frack.
So, overall, the numbers may be less.
Also, there was a flurry of horizontal drilling in the Bakken shale (not the middle Bakken) in the '80s, and many of those wells did not even reach payout. It turns out source rock does not make such good reservoir if it is not heavily fractured, at least in this case.
Doubtless, that induced some 'once burned, twice shy' skepticism in this play, and I do not know if those wells are being included when people are talking about overall recovery from the Bakken Formation if they have not specified recovery from the Middle Bakken. After all, the Shale member(s) is/are part of it, too.
The technology has been around for a long time to extract the oil from the Green River Shales.
All we are seeing is variations on the basic theme of: Heat the shale and get the oil out.
WIll it be extensively developed/implemented?
The last time someone invested a chunk in that, Unocal (iirc), eventually left Parachute, CO with their tail between their legs.
Even now, I wouldn't put out money past prototypes and research, without some sort of guarantee the government wasn't going to turn around and bite me as soon as it was ramped up for production.
With the environazis still screeching about anthropogenic climate change, and shrilly howling for shutting down more solutions to the energy problem, I'd be d@mned cautious about doing any more than I needed to to hold the leases.
That includes Juan McCain, who has not done anything to show me he has seen the light in re: anthropogenic Global Warming, which it turns out, simply does not exist.
This is the time the new tech from the last slowdown is implemented and refined, and the time money is spent on R&D, but without some serious reason to believe there will be a ROI to cheer about, it isn't going to show unless it produces immmediate results.
LOL! I remember Popular Science articles saying Nuclear energy was going to be so cheap electricity would be free! (But those were in the '60s).
If those of us 'dinosaurs' who have been at this a quarter century or more did not keep plugging along, and keep up with new technology (Jeez, I remember plotting drill rate on velum, lettering with a LeRoy set, and printing with the Godawful ammoniated Diazo process, which made a Schlumberger truck no place to be while they were printing logs, either--Damn, I'm positively Paleozoic!). , you would be riding your bicycle and be thankful you had tires on it.
While there have been some good ideas out there, ones which have made improvements, and there are more coming in all the time, If I had a dollar for every snotnosed know it all who told the rest of us we didn't know a crown block from a kelly bushing, I'd own a small country somewhere nice.
You must be not very far from where I have worked the last 6 years.
We are trying re-entries on some older leases that date back to the mis- ‘80’s. The casing sizes were the biggest problem, due to the extreme glut of casing then, they used 39# 7” and that posed a tool annular of only 5 7/8”. The difficulty to find motors, bits and tools that would work well in a 5 1/2” hole was beyond logical. those 4 3/4” tool joints pretty much put a serious bind on our build rate. WE came out 15 feet below the DIP line when we landed the curve. We wound up in the Three Forks and couldn’t get out of it. So, we rode it all the way to T.D. The ROP was in the 6 to 8 foot range. (PDC included)
The well was fracked just last week and it came in hot and nasty! It kicked hard and we had to feed it 14.8# kill wt. invert with a yield point of 16 or higher. We fugure the initial flow will average 2500 to 3000 BBl Per day for the first 90 days and then level off to near 8 to 9 hundred.
I doubt we will do any new re-entries, but our next several wells will follow that plan that we stumbled on to. We have targeted all of them in the Three Forks.
Any comments?
Anyone who tries to predict oil usage in 50 years by assuming that there will not be drastic and dramatic changes in technology is totally nuts.
I seriously doubt that the government will allow every vehicle to carry a radioactive source among the general public.
Technology will improve, but not drastically change in 50 years. Nanotechnology has made drastic advances in that time, but when we are talking about applying force to move heavy objects, that realm moves much slower than that. Particularly when dealing with the general public’s use.
I am invested in RES, WFT, WHQ, TS, NOV, & SII. Bought last year in October...I work for RES, have had the stock for years... I also sell covered calls on each listed above.
How about your car? How do you plan to convert it?
I will guess you will rely on the ingenuity of “company”...how often do you take several thousand of YOUR dollars and INVEST in these companies? OK...so let me guess you will do all of the above...now the next questions become REAL fun. How about plastic for CDs, water bottles, package wrapping, patio chairs, many components on your vehicle that make it lighter to help conserve gasoline, what about THAT side of the oil equation? What substitute will we rely on? How about all chemicals that rely on some extract or by product of oil? Fertilizers? I am curious as to what your ideas are for the PRODUCTS we rely on besides the abstract "energy" issue everyone talks about.
So you are the guys I've heard a rumor or two about.
Thoughts: over in the New Town area (Sannish is the town) there is a sand at the base of the Bakken/top of the Three Forks. The contact is an unconformity, anyway, so it stands to reason the eroded material went somewhere--and that it would be tough to identify in drilled samples, especially with a PDC where you get milled bits of what is there anyway, and individual grains might be tough to pick out as a separate unit or layer.
I would not be surprised if there were similar development elsewhere in the basin.
I'd bet you fracked into such a stringer, and it might show up on the old resistivity logs at the contact/Three Forks top as an invaded zone. If so, it could be picked out as a target. (It sure would have drilled better than 6 to 8/hr if you were in it, more like 60-80, at least with the 6 inch hole we have been cutting (bigger tools, and all that).
Maybe on the CNL/LDT as well, but there might be a small crossover (just a couple of percent like you get with chert in lime) if it is on a limestone matrix, because of the density difference between limestone and sandstone.
Any gas on the old mudlogs would be tough to pick out because of the normal gas peak seen coming out of the lower shale.
Drilling wise, it would be hard to get up out of because it may be loose (or poorly cemented) grains. We had the same problem in some granular limestone over on the Nesson Anticline, and had to slide for some 30+ ft before we could get enough ledge built in the roof to climb out of it. Rotate, and all those grains break up, you trough the formation, and you are right back where you were with no gain. It idn't show up as a sandy layer on the Gamma Ray, but it sure behaved like one.
Fun stuff isn't it?
Sheesh! we usually run 29# 7-inch, (32# in the salts). Thirty nine? Wow. Talk about overkill.
Until we have a better base for fuel/fertilizers/pharmaceuticals/plastics or something like them/road surfaces/and a host of other things, there will be demand for oil. If for nothing else than to grease the wheels, something which hasn't chnged since the wheel.
A tremendous amount of new technology is just old ideas in a new package.
A nuclear power plant is still boiling water to make steam to turn a wheel (a turbine, a more efficient wheel), to produce electricity.
Just a different 'fire' with more gadgetry, but the same basic concept.
Now, come up with something which will efficiently move along on its own most anywhere, with no moving parts, and you will be making progress, otherwise, you are just making the oxcart go in a different way.
That may happen in the next 50 years.
My grandfather saw from Orville and Wilbur Wright to the moon landings in his lifetime, and I have seen plenty of change since I was a child.
But remember, the more things change, the more they stay the same.
For now, we need today what we need today, and I and others will keep working to provide it.
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