Always interesting to hear the stories about travel and the personalities and characters in the energy business. Sometimes meeting someone in person on their home turf can change your thinking in a way that no amount of spreadsheets ever can. Definitely we Westerners usually lack a good understanding of the Middle East, a good source I listen to is Dr. Anas Al Hajji, I've learned a lot about the Saudi perspective on energy markets from him (including the shift to other uses of petroleum in response to the strong messaging from the Western world about peak demand, whether that prediction peak demand pans out or not, it has not gone unnoticed by the Gulf producers). 'Out of the Desert' by Ali Al-Naimi is also a classic, well worth reading and re-reading every few years.
2) US shale rig/frac counts have been falling as has productivity YOY. US shale has peaked. Reference Eric Nutall or HFIR's Twitter data. EIA data is biased to yield lower oil prices
3) Most of Exxon's production growth comes from their Pioneer acquisition. From mid-2024 through 2027, XOM is forecasting 900k+ bpd of liquids production of which Pioneer's pre-acquisition production was 715k boe/d:
From 2019 through 2023, XOM grew their liquids production at an average rate of 60k bpd/year. So where Guyana production grows, other XOM liquids production falls.
oil bull, got it! I've been pushing my non-OPEC slows forecasts to the right for 3 years now. Don't think we tighten before 2025. but yes, it should slow in the out years of this decade.
The bottom line is the Oil Industry has become a victim of their own success and that will continue to improve and grow as they utilize A I , although I don’t know how you can improve on drilling a 3 mile lateral and hitting a shoebox . One of the major domestic constraints for oil and gas is the cost to comply with the massive amount of new regulations ( costs Increase )and the difficulty to build infrastructure in a timely manner if ever . The A I boys now have those issues you run everyone’s electric bill up see how the public reacts to that and putting a mini nuke next door or even a turbine not in my back yard !
Can you prove that the Saudis have nearly 2 million bpd of oil production spare capacity and the UAE almost 1 million of oil production spare capacity? Neither country has ever produced the supposed maximum levels of oil production for any sustained period:
The Saudis have maybe 1 million bpd of spare capacity and the UAE has maybe 200k bpd of spare capacity when you compare their SUSTAINED historical production peaks to current production levels. Furthermore, Saudi and UAE oil fields are very old and as you know oil fields are depleted. Ask Matt Simmons for his opinion of Saudi spare capacity. The range of oil fields is from 30 to 50 years old: From Perplexity AI:
image.png
Look how old Saudi oil fields are:
Saudi oil fields
Year Started Age
Dammam Field, Saudi Arabia, Discovered 1938, Giant Field 1938 86
Abqaiq Field, Saudi Arabia, Discovered 1940, Supergiant Field 1940 84
Abu Hadriya Field, Saudi Arabia, Discovered 1940, Giant Field 1940 84
Qatif Field, Saudi Arabia, Discovered 1945, Supergiant Field 1945 79
Ghawar Field, Saudi Arabia, Discovered 1948, Megagiant Field 1948 76
Fadhili Field, Saudi Arabia, Discovered 1949, Giant Field 1949 75
Safaniya Field, Saudi Arabia, Discovered 1951, Megagiant Field 1951 73
Khursaniyah Field, Saudi Arabia, Discovered 1956, Giant Field 1956 68
Khurais Field, Saudi Arabia, Discovered 1957, Supergiant Field 1957 67
Manifa Field, Saudi Arabia, Discovered 1957, Supergiant Field 1957 67
Khafji Field, Saudi Arabia, Discovered 1959, Supergiant Field 1959 65
Abu Sa'fah Field, Saudi Arabia, Discovered 1963, Supergiant Field1963 61
Hout Field, Saudi Arabia, Discovered 1963, Giant Field 1963 61
Berri Field, Saudi Arabia, Discovered 1964, Supergiant Field 1964 60
Zuluf Field, Saudi Arabia, Discovered 1965, Supergiant Field 1965 59
Dorra Field, Saudi Arabia, Discovered 1967, Giant Field 1967 57
Jana Field, Saudi Arabia, Discovered 1967, Giant Field 1967 57
Karan Field, Saudi Arabia, Discovered 1967, Giant Field 1967 57
Marjan Field, Saudi Arabia, Discovered 1967, Supergiant Field 1967 57
Jurayd Field, Saudi Arabia, Discovered 1968, Giant Field 1968 56
Shaybah Field, Saudi Arabia, Discovered 1968, Supergiant Field1968 56
Barqan Field, Saudi Arabia, Discovered 1969, Giant Field 1969 55
Harmaliyah Field, Saudi Arabia, Discovered 1971, Giant Field 1971 53
Mazalij Field, Saudi Arabia, Discovered 1971, Giant Field 1971 53
Abu Jifan Field, Saudi Arabia, Discovered 1973, Giant Field 1973 51
Maharah Field, Saudi Arabia, Discovered 1973, Giant Field 1973 51
Rimthan Field, Saudi Arabia, Discovered 1974, Giant Field 1974 50
Dibdibah Field, Saudi Arabia, Discovered 1975, Giant Field 1975 49
Lawhah Field, Saudi Arabia, Discovered 1975, Giant Field 1975 49
Habari Field, Saudi Arabia, Discovered 1976, Giant Field 1976 48
Hasbah Field, Saudi Arabia, Discovered 1976, Giant Field 1976 48
Sadawi Field, Saudi Arabia, Discovered 1976, Giant Field 1976 48
Sharar Field, Saudi Arabia, Discovered 1976, Giant Field 1976 48
Suban Field, Saudi Arabia, Discovered 1976, Giant Field 1976 48
Qubqub Field, Saudi Arabia, Discovered 1977, Giant Field 1977 47
Suhul Field, Saudi Arabia, Discovered 1977, Giant Field 1977 47
Harqus Field, Saudi Arabia, Discovered 1978, Giant Field 1978 46
Jaladi Field, Saudi Arabia, Discovered 1978, Giant Field 1978 46
Wari'ah Field, Saudi Arabia, Discovered 1978, Giant Field 1978 46
Dhib Field, Saudi Arabia, Discovered 1979, Giant Field 1979 45
Hamur Field, Saudi Arabia, Discovered 1979, Giant Field 1979 45
Jawb Field, Saudi Arabia, Discovered 1979, Giant Field 1979 45
Lughfah Field, Saudi Arabia, Discovered 1979, Giant Field 1979 45
Samin Field, Saudi Arabia, Discovered 1979, Giant Field 1979 45
Hamd Field, Saudi Arabia, Discovered 1982, Giant Field 1982 42
Tinat Field, Saudi Arabia, Discovered 1982, Giant Field 1982 42
Jauf Field, Saudi Arabia, Discovered 1983, Giant Field 1983 41
Maghrib Field, Saudi Arabia, Discovered 1983, Giant Field 1983 41
Farhah Field, Saudi Arabia, Discovered 1984, Giant Field 1984 40
Sahba Field, Saudi Arabia, Discovered 1984, Giant Field 1984 40
Dilam Field, Saudi Arabia, Discovered 1989, Giant Field 1989 35
Hawtah Field, Saudi Arabia, Discovered 1989, Giant Field 1989 35
Hazmiyah Field, Saudi Arabia, Discovered 1990, Giant Field 1990 34
Raghib Field, Saudi Arabia, Discovered 1990, Giant Field 1990 34
Abu Shaddad Field, Saudi Arabia, Discovered 1996, Giant Field 1996 28
Wadayhi Field, Saudi Arabia, Discovered 1998, Giant Field 1998 26
Niban Field, Saudi Arabia, Discovered 1999, Giant Field 1999 25
Shaden Field, Saudi Arabia, Discovered 1999, Giant Field 1999 25
Ghazal Field, Saudi Arabia, Discovered 2000, Giant Field 2000 24
Takhman Field, Saudi Arabia, Discovered 2002, Giant Field 2002 22
Du'ayban Field, Saudi Arabia, Discovered 2005, Giant Field 2005 19
Karan Field, Saudi Arabia, Discovered 2006, Giant Field 2006 18
Yes, could well be less than what even I have here. Most people use 12. I have gone back and forth between 10, 10.5 ,and 11 over the years. This post uses 11. I am probably being a little loose with the word "demonstrated"...it is why I don't use 12. But they are in the process of reducing direct crude burn which will free up export capacity so have been in the mode of rounding up.
Appreciate the personal and travel travails. You just became more interesting to me. Mileage may vary.
thank you
Thank you Arjun. Always a delight.
Thank you Martin!
Always interesting to hear the stories about travel and the personalities and characters in the energy business. Sometimes meeting someone in person on their home turf can change your thinking in a way that no amount of spreadsheets ever can. Definitely we Westerners usually lack a good understanding of the Middle East, a good source I listen to is Dr. Anas Al Hajji, I've learned a lot about the Saudi perspective on energy markets from him (including the shift to other uses of petroleum in response to the strong messaging from the Western world about peak demand, whether that prediction peak demand pans out or not, it has not gone unnoticed by the Gulf producers). 'Out of the Desert' by Ali Al-Naimi is also a classic, well worth reading and re-reading every few years.
https://www.amazon.ca/Out-Desert-Journey-Nomadic-Bedouin/dp/0241279259
I am a big fan of Dr Anas. Have done a few Twitter Spaces together.
Send me a copy, haha. (Just kidding. Out of print, 116$.)
"a combination of rising oil production from US shale oil, Guyana, Brazil, and Canada can meet subdued oil demand growth."
1) PBR forecasts no production increase in 2025: See p19 of
https://api.mziq.com/mzfilemanager/v2/d/25fdf098-34f5-4608-b7fa-17d60b2de47d/9316441c-153d-6350-2c96-e454f38709ca?origin=1
2) US shale rig/frac counts have been falling as has productivity YOY. US shale has peaked. Reference Eric Nutall or HFIR's Twitter data. EIA data is biased to yield lower oil prices
3) Most of Exxon's production growth comes from their Pioneer acquisition. From mid-2024 through 2027, XOM is forecasting 900k+ bpd of liquids production of which Pioneer's pre-acquisition production was 715k boe/d:
https://d1io3yog0oux5.cloudfront.net/_242666f777c912ef7b673ee82ec3f848/exxonmobil/db/2288/22296/presentation/2Q24+Earnings+Slides_Final.pdf
From 2019 through 2023, XOM grew their liquids production at an average rate of 60k bpd/year. So where Guyana production grows, other XOM liquids production falls.
https://www.reuters.com/business/energy/pioneer-natural-reports-strong-fy-production-exxon-takeover-looms-2024-02-22/
oil bull, got it! I've been pushing my non-OPEC slows forecasts to the right for 3 years now. Don't think we tighten before 2025. but yes, it should slow in the out years of this decade.
The bottom line is the Oil Industry has become a victim of their own success and that will continue to improve and grow as they utilize A I , although I don’t know how you can improve on drilling a 3 mile lateral and hitting a shoebox . One of the major domestic constraints for oil and gas is the cost to comply with the massive amount of new regulations ( costs Increase )and the difficulty to build infrastructure in a timely manner if ever . The A I boys now have those issues you run everyone’s electric bill up see how the public reacts to that and putting a mini nuke next door or even a turbine not in my back yard !
LOL and well said!
Arjun:
Can you prove that the Saudis have nearly 2 million bpd of oil production spare capacity and the UAE almost 1 million of oil production spare capacity? Neither country has ever produced the supposed maximum levels of oil production for any sustained period:
See the Saudi and UAE historical production charts here as your comment section does not allow me to post the charts here: https://peakoilbarrel.com/opec-update-september-2024/
The Saudis have maybe 1 million bpd of spare capacity and the UAE has maybe 200k bpd of spare capacity when you compare their SUSTAINED historical production peaks to current production levels. Furthermore, Saudi and UAE oil fields are very old and as you know oil fields are depleted. Ask Matt Simmons for his opinion of Saudi spare capacity. The range of oil fields is from 30 to 50 years old: From Perplexity AI:
image.png
Look how old Saudi oil fields are:
Saudi oil fields
Year Started Age
Dammam Field, Saudi Arabia, Discovered 1938, Giant Field 1938 86
Abqaiq Field, Saudi Arabia, Discovered 1940, Supergiant Field 1940 84
Abu Hadriya Field, Saudi Arabia, Discovered 1940, Giant Field 1940 84
Qatif Field, Saudi Arabia, Discovered 1945, Supergiant Field 1945 79
Ghawar Field, Saudi Arabia, Discovered 1948, Megagiant Field 1948 76
Fadhili Field, Saudi Arabia, Discovered 1949, Giant Field 1949 75
Safaniya Field, Saudi Arabia, Discovered 1951, Megagiant Field 1951 73
Khursaniyah Field, Saudi Arabia, Discovered 1956, Giant Field 1956 68
Khurais Field, Saudi Arabia, Discovered 1957, Supergiant Field 1957 67
Manifa Field, Saudi Arabia, Discovered 1957, Supergiant Field 1957 67
Khafji Field, Saudi Arabia, Discovered 1959, Supergiant Field 1959 65
Abu Sa'fah Field, Saudi Arabia, Discovered 1963, Supergiant Field1963 61
Hout Field, Saudi Arabia, Discovered 1963, Giant Field 1963 61
Berri Field, Saudi Arabia, Discovered 1964, Supergiant Field 1964 60
Zuluf Field, Saudi Arabia, Discovered 1965, Supergiant Field 1965 59
Dorra Field, Saudi Arabia, Discovered 1967, Giant Field 1967 57
Jana Field, Saudi Arabia, Discovered 1967, Giant Field 1967 57
Karan Field, Saudi Arabia, Discovered 1967, Giant Field 1967 57
Marjan Field, Saudi Arabia, Discovered 1967, Supergiant Field 1967 57
Jurayd Field, Saudi Arabia, Discovered 1968, Giant Field 1968 56
Shaybah Field, Saudi Arabia, Discovered 1968, Supergiant Field1968 56
Barqan Field, Saudi Arabia, Discovered 1969, Giant Field 1969 55
Harmaliyah Field, Saudi Arabia, Discovered 1971, Giant Field 1971 53
Mazalij Field, Saudi Arabia, Discovered 1971, Giant Field 1971 53
Abu Jifan Field, Saudi Arabia, Discovered 1973, Giant Field 1973 51
Maharah Field, Saudi Arabia, Discovered 1973, Giant Field 1973 51
Rimthan Field, Saudi Arabia, Discovered 1974, Giant Field 1974 50
Dibdibah Field, Saudi Arabia, Discovered 1975, Giant Field 1975 49
Lawhah Field, Saudi Arabia, Discovered 1975, Giant Field 1975 49
Habari Field, Saudi Arabia, Discovered 1976, Giant Field 1976 48
Hasbah Field, Saudi Arabia, Discovered 1976, Giant Field 1976 48
Sadawi Field, Saudi Arabia, Discovered 1976, Giant Field 1976 48
Sharar Field, Saudi Arabia, Discovered 1976, Giant Field 1976 48
Suban Field, Saudi Arabia, Discovered 1976, Giant Field 1976 48
Qubqub Field, Saudi Arabia, Discovered 1977, Giant Field 1977 47
Suhul Field, Saudi Arabia, Discovered 1977, Giant Field 1977 47
Harqus Field, Saudi Arabia, Discovered 1978, Giant Field 1978 46
Jaladi Field, Saudi Arabia, Discovered 1978, Giant Field 1978 46
Wari'ah Field, Saudi Arabia, Discovered 1978, Giant Field 1978 46
Dhib Field, Saudi Arabia, Discovered 1979, Giant Field 1979 45
Hamur Field, Saudi Arabia, Discovered 1979, Giant Field 1979 45
Jawb Field, Saudi Arabia, Discovered 1979, Giant Field 1979 45
Lughfah Field, Saudi Arabia, Discovered 1979, Giant Field 1979 45
Samin Field, Saudi Arabia, Discovered 1979, Giant Field 1979 45
Hamd Field, Saudi Arabia, Discovered 1982, Giant Field 1982 42
Tinat Field, Saudi Arabia, Discovered 1982, Giant Field 1982 42
Jauf Field, Saudi Arabia, Discovered 1983, Giant Field 1983 41
Maghrib Field, Saudi Arabia, Discovered 1983, Giant Field 1983 41
Farhah Field, Saudi Arabia, Discovered 1984, Giant Field 1984 40
Sahba Field, Saudi Arabia, Discovered 1984, Giant Field 1984 40
Dilam Field, Saudi Arabia, Discovered 1989, Giant Field 1989 35
Hawtah Field, Saudi Arabia, Discovered 1989, Giant Field 1989 35
Hazmiyah Field, Saudi Arabia, Discovered 1990, Giant Field 1990 34
Raghib Field, Saudi Arabia, Discovered 1990, Giant Field 1990 34
Abu Shaddad Field, Saudi Arabia, Discovered 1996, Giant Field 1996 28
Wadayhi Field, Saudi Arabia, Discovered 1998, Giant Field 1998 26
Niban Field, Saudi Arabia, Discovered 1999, Giant Field 1999 25
Shaden Field, Saudi Arabia, Discovered 1999, Giant Field 1999 25
Ghazal Field, Saudi Arabia, Discovered 2000, Giant Field 2000 24
Takhman Field, Saudi Arabia, Discovered 2002, Giant Field 2002 22
Du'ayban Field, Saudi Arabia, Discovered 2005, Giant Field 2005 19
Karan Field, Saudi Arabia, Discovered 2006, Giant Field 2006 18
Joel
Yes, could well be less than what even I have here. Most people use 12. I have gone back and forth between 10, 10.5 ,and 11 over the years. This post uses 11. I am probably being a little loose with the word "demonstrated"...it is why I don't use 12. But they are in the process of reducing direct crude burn which will free up export capacity so have been in the mode of rounding up.