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U.S. Top Shale Oil Fields Decline 10 Times Faster Than Global Oil Industry
U.S. Top Shale Oil Fields Decline 10 Times Faster Than Global Oil Industry
The Global Economy is heading for serious trouble when the disintegration of the U.S. Shale Oil Industry begins, likely within the next few years. With Global GDP growth based on world oil production growth, the main driver has been the U.S. shale oil industry. This is terrible news because the top U.S. shale oil fields are declining ten times the rate as are the world’s mature oil fields.
According to the IEA, the International Energy Agency’s 2018 Executive Summary:
Natural production declines are slowing, but more investment will be needed. Each year the world needs to replace 3 mb/d of supply lost from mature fields while also meeting robust demand growth.
I have seen higher estimates of 4-4.5 million barrels per day of annual production declines from the world’s mature oil fields. Either way, annual oil production declines from the world’s mature oil fields is a tenth of the rate from the top four U.S. shale oil fields.
If we look at the data taken from Shaleprofile.com, the top 4 U.S. shale oil fields (Permian, Bakken, Eagle Ford & Niobrara), 2018 production reached 6.6 (mbd) million barrels per day by December and then declined to 3.7 mbd by October 2019:
The top 4 U.S. shale oil fields experienced a 44% decline rate from Dec 2018 to Oct 2019… and this isn’t for the entire year. It will take another month or so before Shaleprofile.com releases the total production figures up until December 2019. Thus, the total-year decline rate may be closer to 46-48%.
If we assume a conservative 45% decline rate from these top U.S. shale oil fields and compare it to the average decline rate from the world’s mature fields, here is the result:
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THE END OF THE OIL GIANTS: And What It Means
THE END OF THE OIL GIANTS: And What It Means
Recently, Saudi Aramco, the world largest oil exporter, has acknowledged that Ghawar, the world largest oil field, is in decline. The news went mostly unnoticed except in the specialised media. OK, so the Saudi have a bit of bother, so what? In fact, this piece of news is extremely important. Previously the oil world had been led to believe that Ghawar was producing over 5 Million barrels/day (Mb/d).[1] As part of its fund-raising, Aramco has disclosed that it is in fact down to 3.8Mb/d.
THE END OF THE OIL GIANTS: And What It Means
GUEST POST: By Dr. Louis Arnoux
The meaning of this news snippet takes a bit of explaining. What the specialised media did not emphasise is what follows:
When giant oil fields go into decline, they usually decline abruptly. Ghawar’s decline is ominous. It was discovered in 1948 and until recently represented about 50% of the oil crude production of the Kingdom of Saudi Arabia (KSA). Ghawar is representative of some 100 to 200 giant oil fields. Most of them are old. The most recently discovered giants are of a diminutive size compared with those old giants.[2]
Giants represent about 1% of the total number of oil fields and yet produce over 60% of conventional oil crude.[3]Very few real giants have been discovered in recent years. The geology of the planet is now known well enough and prospects for new significant giant oil discoveries are known to be low. In recent decades, discoveries of smaller oil fields have not been able to compensate for the eventual loss of the giants. Figure 1 illustrates the matter. It shows the net flux of addition to reserves per year (additional volumes less volumes used).
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