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 timeprobably 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.
Keep in mind Exxon was there because of the government subsidies. It was an uneconomic process at the time. Without tax-payer dollars, they never would have been there at that time.
When the subsidies ended, so did jobs. Always a bad way, having politicians selecting technologies.
I was in the area in the early ‘90s working Cozette/Corcoran sand horizontal wells south of Rifle. The area was fairly well hurting then, relative to the rest of the State. The shale boom had busted...raw deal for the folks who worked there. (Isn’t it always). Wait until the Ethanol boom goes flat (or gas hits six bucks when the subsidies come off).
Actually, those ROP’s are quite normal, we are finding. The density of the sand and limestone is much higher than the Sydney area. (40 miles west on 201) It also is hard to get much background isolation using invert. Everything comes across the MWD gama as one hydrocarbon, if you know what I mean. Our normal background is steadily 4 to 6 thousand units and we have to flare continuously. Trips are also a nightmare. We have to spot 13# mud above the curve to hold it. When we get back on bottom, it’s a full blown kick/emergency and the flares are SPECTACULAR! (50 to 100 feet.)
We have to use a double membrane rotating head to hold it and we must go through the annular preventer and choke to handle the initial flow when we break circulation. It truly is wild........
We achieved those ROP’s ( 40 to 70 fph in the Sydney area) using 9.6# Salt water. Here is much different. Because of the high gas content, we have to use Invert with a YP of at least 14 to stabilize the sands. Our ROP suffers as a result. But what we are finding is that this method is worth the wait.
Of course now we use 29# on the intermediate, but back then,(’80’s) they had lots and lots of cheap casing available because of the Oil field depression going on
At that time, I was in Prudhoe Bay for BP. then.
The payoff is in getting p-rates of 20-30 ft/hr in zone--but remember, we could get a six inch bit through, and that means a bigger mud motor, too. We were also running hole lube and sweeps to clear out the bedload. Still, it is a bunch slower over there.
I've seen sprints of 1800 ft/day over here in the lateral, 3500 in 2 days (and then we ran out of lease).
The bottom line, though, is whatever works and makes a good well. As for hard and fast rules, the more I learn, the less I know.
Places over there do not have a well defined clean streak on the Gamma Ray log, and the MWD logs don't quite look the same as the old open hole logs, with thinner (as a rule) or inconsistent low GR stringers. You have to get creative on occasion to keep in the good stuff. Use all the available data, especially what the samples tell you, and you can do pretty well.
It sure is a bear to try to get invert off the samples in the lateral though, especially when you get out a ways and everything is milled to powder. That is where the brine really makes the job easier for us rockhounds.
Very sorry about that. (mutter, grumble...)
Once again, you make the mistake (that I was trying to point out) of extrapolating today's technology 20 years into the future. Now as far as solar goes, there are some very promising developments in thin film solar cell technology that will bring the costs down to feasible, cost competitive levels.
This article is about oil being at $100+ till the year 2020. I say that is crap! Many experts feel that oil should be at about $70 according to the fundamentals. Let some of these new technologies kick in over the next 5 years and see what happens. Hint... The price is going down.
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