The West Australian Department of Mining and Petroleum published its latest statistics for 2009 on 27/4/2010 http://www.dmp.wa.gov.au/7105_10347.aspx
Crude oil production dropped from 13.1 GL in 2008 to 9.5 GL in 2009. The following graph shows the stacked production profiles of all oil producing fields in WA:
We can clearly see the production battle out there in those offshore oil fields. The pre-2004 fields have been declining at around 10% pa since their peak in 2002 and would peter out in the 2nd half of this coming decade.
New fields have come on-stream since 2004 which stabilized production at a 15% lower level in the years 2004-2008, but these new fields themselves decline fast, after impressive ramp-ups.
Maturing fields
A good example for the decline in maturing fields is the shut-in of the Griffin field >>>
in October 2009 which was no longer economic to produce despite its remaining P90 reserves of 1.262 GL (equivalent to 7 years of 2008 production at 183,506 Kl, see page 46-47 in PWA April 2009).
Cyclonic activity was also given as a reason for the timing of the closure.
www.dmp.wa.gov.au/documents/oilandgas05.pdf
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New fields
An example for the rapid decline in new fields is the Stybarrow field (850 m water depth, discovered 2003) which started in late 2007 with contracts to supply oil to a Japanese power station (one wonders why they can’t manage with nuclear power), to Singapore for fuel blending and to refineries in Korea and Japan.
<<< Map of fields 135 km NW of Dampier
Green dots = oil, red dots = gas
Original reserves estimates ranged between 60 and 90 million barrels or 9.5 to 14.3 GL but by end 2008 already 4.093 GL had been produced with published P90 reserves down to 5.605 GL (P50 at 7.805 GL). Production dropped 55% from 3.794 GL in 2008 to 1.729 GL in 2009. The field was shut down in the 1st quarter 2010 and gross output was just 22.25 Kb/d instead of the maximum of 80 kb/d
Technical challenges and accidents
The Vincent oil field started to produce in August 2008 with an expected initial production of 50 kb/d (= 2.9 GL pa) and a natural decline to 40 Kb/d by the end of the year.
Vincent’s floating production storage and offloading vessel (FPSO) is an impressive facility with state of the art technology best described in this slide show:
Recoverable reserves are 73 million barrels – at Australia’s daily consumption of 950 kb/d
http://tonto.eia.doe.gov/country/country_energy_data.cfm?fips=AS
this is the equivalent of about 80 days supplies!)
But these FPSOs are vulnerable. In April 2009, there was an explosion and subsequent fire in the gas compression module, an event which is assessed in this accident report:
“Denmarks’s Division for Investigation of Maritime Accidents says that the crew of the Floating Production Storage and Offloading vessel, FPSO, Maersk Ngujima-Yin handled emergency response and fire fighting effectively and competently with what they had during a fire onboard but identified a lack of safety culture and criticised management for not providing the means necessary to accommodate and coordinate the interests of the project team and the operations team, acted inadequately on the feedback from the FPSO crew during the project and has not been able to re-establish a healthy safety climate on board and says that the support for maintenance on board provided by management has been inadequate.”
Just 4 months later the West Atlas rig caught fire in the Montara field. >>>
“A federal inquiry into an oil spill off the northern coast of Western Australia last year will begin in Canberra today.
Oil and gas from the Montara well began leaking into the Timor Sea last August, causing thousands of barrels of oil and gas to spill into the ocean off the Kimberley coast.
The leak, which continued for more than 10 weeks, was eventually stopped when heavy mud was pumped down a relief well.”
http://www.abc.net.au/news/stories/2010/03/15/2845752.htm
And the deep water Horizon fire and oil spill in the Gulf of Mexico
http://en.wikipedia.org/wiki/File:Deepwater_Horizon_offshore_drilling_unit_on_fire_2010.jpg
show that we may have reached the environmental and technical limits to offshore production.
Read about the blowout here: http://www.theoildrum.com/node/6421?nocomments
Outlook 2010: These 2 oil fields started production in early 2010
- Pyrenees (170-250 m, 80-120 million barrels reserves, max production 90 Kb/d)
- Van Gogh (340-400 m water depth, 1,300 m true vertical well depth plus long-reach horizontal wells, 59 million barrels reserves, max production 40 Kb/d, the FPSO’s delivery was also delayed by a fire while at Singapore’s Keppel shipyard)
Condensate
Condensate comes from gas fields and their development depends on LNG projects. Most of it is exported (into the bottomless pit of the global oil markets) as Australian refineries don’t have condensate splitters.
What is condensate? This is the composition from the Bayu-Undan field:
| LPG | 1.8 % | Light Naphta | 21.4 % | Heavy Naphta | 34.1 % |
| Jet Kerosene | 27.4 % | Diesel | 9.7 % | Other carbonhydrates | 5.6 % |
http://www.santos.com/activities-browser/liquids-marketing/bayu-undan-condensate.aspx
Given the offshore challenges, how will these oil and gas fields perform? As an example, the following graph shows a superimposition of actual production (from PWA April 2010) on an estimate published in the Western Australia Oil and Gas Review 2005, page 7.
Underlay for this graph from: www.dmp.wa.gov.au/documents/oilandgas05.pdf
We can see that the predicted 2nd peak didn’t happen.
Not only has production become a challenge but we have to ask for which purpose is the rest of this precious oil produced? Will the proposed resource rent tax
Henry review recommends resource rent tax
http://www.theage.com.au/business/henry-review-recommends-resource-rent-tax-20100121-moc5.html
be properly used? If it is spent on new freeways, the oil is gone, the tax wasted and nothing is built up to get away from oil and to replace the existing energy and transport system.
28/3/2010
Report Card 2009 (part 3) Nation Building Program spends only 23% on rail, long list of motorways
http://www.crudeoilpeak.com/?p=1282
Governments and the public still have to wake up to what oil decline really means.
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