cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Advisor

a wild speculation

although the reigning explanations of Saudi behavior with oil output don't entirely make sense to me.

 

Maybe the Ghawar oil field is about to head into sharp decline. The other 4 supergiants in the world are already there. Ghawar flow is now supported by the most sophisticated enhanced extraction methods in the world which, as much as getting more oil out tend to push it out faster, pushing peak off to the right on the graph, followed by a cliff.

 

Thinking around the business seems to be that Ghawar is already past peak- Saudi production is being supported by a couple of much smaller projects coming on line.

 

You reach a point at the end where you don't have any choice but to just keep pushing.

 

I'd go further to wonder if the Saudi royals, having used a bit of the moolah to feed a sharply growing population while radicalizing them, is preparing to decamp after they've extracted all they can.

 

I'm interested in certain energy investments and although I'm notoriously poor at picking bottoms I see the oil price and attitude toward comapnies in that space getting worse before they get better, and barring a severe shock (see above) probably aren't going anywhere fast.

18 Replies
Highlighted
Senior Contributor

Re: a wild speculation

I never worry about getting bought in at the absolute bottom, I just want to buy in on the bottom 1/3. I also never worry about selling at the absolute top, again if I can sell in the top 1/3 I'm pretty pleased.

Kind of a pigs get fat, hogs get slaughtered mentality.

 

Bottom has to be close, based on a few things I've been watching.

 

Highlighted
Honored Advisor

Re: a wild speculation

Oil prices don`t make sense.  If I`m sitting in a desert and the only commodity or product that I have that keeps me in tall buildings, Maseratis and trucked in water.  I sure wouldn`t be squandering the one thing that makes me valuable, just to get even with some North Dakota frackers.  

 

If this was a pure economic decision, the camel jokeys should pump just enough to keep oil at $80, that only allows the low hanging fruit to be pumped.

 

It could be alot of things at foot here, my top reason is Kerry went to the Saudis and told them to "pump like a son of a b***** for a few years to break Putin, after that you can go back to screwing the world with whatever price".  Just like in `73 when Bepissinger made the "Petro-dollar" deal.

 

Or it could be aliens are about to share with us a free energy source that`s created from air and the Saudis know this beforehand and are getting out while oil is still worth something.

 

Or oil is "abiogenic" and NOT fossil fuel there being a endless supply that the earth creates.  I wouldn`t dismiss this theory because how come they have oil rigs in the Gulf and go down 2 miles in the ocean ...how did dinosaurs get buried that deep?

 

https://en.wikipedia.org/wiki/Abiogenic_petroleum_origin

Highlighted
Veteran Advisor

Re: a wild speculation

In your "wild speculation" do you have any vision of how the world, this country in particular, is going to react, especially since it would appear that the majority of the loyal opposition is opposed to much of anything in the avenue of alternative energy sources, when this "end of oil" occurs?  I'm thinking that when that happens, as it surely will, you should be in a place that you truly love because unless you really like to walk or have a few really good horses, you ain't going no place!!

Highlighted
Veteran Advisor

Re: a wild speculation

One reason might be that the continents drifted apart so that what is now under 2 miles of water might have had solid land at one time????

Highlighted
Advisor

Re: a wild speculation

C'mon now, you know if land that is under 2 miles of water now that used to be dry land was put under water by global warming .

Highlighted
Advisor

Cantarell decline curve

What can be done to arrest conventional oilfield production decline?

 

Even faster than predicted. #2 field in the world.

Highlighted
Senior Advisor

Re: Cantarell decline curve

All that decline and oil is only $37/barrel. Let's out law it and make everyone use something more expensive.

Highlighted
Advisor

Re: Cantarell decline curve

Partly on the back of a half $T or so of "private" capital quickly heading off to the place where money goes to die.

 

We need fossil fuels as the bridge to building a system where we aren't as reliant on them. EROEI isn't extrememly high on the alternatives and you need energy input to get to energy output. But I suspect that along the way we'll see this pattern play out several more times- prices rise enough to bring high cost projects on line and then production rises/demand drops and the rug gets pulled. Production slowly drops and you do it again. Capital destruction on a vast scale.

 

That's what happens when you've built a world where there is no present alternative, and quite honestly there is no good alternative to good old fashioned high EROEI oil but unfortunately that stuff is running out. It was finite.

 

 

 

 

 

 

Highlighted
Veteran Advisor

Re: a wild speculation

Actually, I think global warming has melted the wax in your ears and your brain has flowed out!!