Oil Prices Crash After Saudis Fail To Broker Global Production Cut
Shares in UK Oil and Gas Investments soared by as much as 77pc after the Aim-listed developer announced that oil from its well near Gatwick Airport in Surrey flowed at a faster rate than expected. UK Oil and Gas (Ukog) has claimed that oil from the so called “Gatwick gusher” at Horse Hill flowed from 900m below ground level to the surface without extra help from operators, and at a better rate than expected of 463 barrels a day. Ukog and its partners in Horse Hill have claimed that more than 9.2 billion barrels of oil lie under the 55 square kilometre licence area in the Weald Basin. –Jillian Ambrose, The Daily Telegraph, 16 February 2016
A spot in the south of England near Gatwick airport could hold a massive amount of oil even larger than that found at the North Sea oil fields. Investigations at the site in Horse Hill by UK Oil and Gas Investments (UKOG), have discovered the site could hold up to 100bn barrels of the black stuff – dwarfing the 45bn barrels produced by the North Sea in the last 40 years. –City A.M., 9 April 2015
The world’s two most powerful oil producers have reached a tentative agreement to freeze oil production at their current levels, dashing hopes of a supply cut for the world’s glutted market. Meeting in Doha, Russian, Venezuelan, Qatari and Saudi Arabian oil ministers reached a deal to not exceed production from their January levels, but only if it was followed suit by other producers such as Iran and Iraq. Forward prices for Bent crude plunged by as much as 3pc on the news to $33.68 a barrel, reversing days of gains. –Mehreen Khan, The Daily Telegraph, 16 February 2016
h/y to TheGWPF
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Peak oil my butt! I am mostly suprised that no one did not do exploration there much earlier.
Good to know, now leave it there, and buy the imported cheap stuff, until its no longer cheap, and you’re on a sure winner.
British Eco-Freaks will start yelling any minute now… ” Put it back, put it back or we are all doooooomed ” !! LOL
Already happening. Of course you will find most of the protesters got to th protest site by car!!!! Oil extraction in Hampsire has been happening since the 80’s, there is even an thread here at WUWT about it.
Gravimetric satellites now reveal exactly where to look.
Seismic data has always revealed exactly where to look.
seismic is better than satellite gravity, but is no silver bullet
Seismic data will tell you where you should drill, but it will not tell you if there is oil or gas there. Only by drilling a hole will you be absolutely sure.
greymouser you have obviously never drilled for natural gas based on seismic data or you would know what a “bright spot” is and would not be posting something so wrong. It doesn’t work everywhere but is pretty definitive where is does work.
@Steward Pid: I worked for many years in the oil and gas exploration business and from my geophysics classes I was taught that seismic data can tell you that there is a high probability that there are hydrocarbons where you are planning to drill, but you still have to drill the hole to be absolutely sure.
Can’t they just model where the Oil is (tehee).
Sun Spot, old Son,
See Greymouser70’s comment at 10.29 am.
Auto
[Yeah, I know – model – tee-hee!]
Their previous announcement’s were widely publicised, no one at the moment is investing in the oil exploration, to the contrary many projects are mothballed, could it be that they need some more research money?
Probably need to wait for a higher $ per barrel.
the article Anthony cited said it would run between $10-$30/bbl to produce, depending on how quickly the flow dropped off. It is profitable now (not including taxes, which could be as much as $20/bbl).
But we won’t be allowed to burn it….
Maybe you can turn it all into plastic.
No, the greens hate plastic too.
I object to this filthy black crude. Let’s do the right thing and leave it in the ground. Besides we would be hurting our peace loving middle eastern suppliers never mind hurting our Scotish/ Norwegian friend’s feelings by becoming energy independent. Let,s plant lots of beautiful wind and solar farm’s right above the Oil fields to show just how moral and green we really are. PM start writing subsidy and grant cheques immediately!!!!
Great news for the UK. With fracked gas as well, this has the potential to radically alter the economic outlook for the country. One more reason to go for Brexit.
Also pretty amusing if Scotland goes for independence as hugely expensive to extract North Sea oil dries up and it’s cheap hydrocarbon boom time in England.
Somewhere between the Mesosphere (400 miles down) and the crust there has to be a layer in which oil is continuously manufactured because it just isn’t running out. There is no peak oil. Oil is going to continue bubbling up and spewing out all over the world. Rejoice. Take advantage of it. If you’re worried about too much CO2 in the atmosphere plant more forests, grow more crops and hold your breath.
John G …. at least take a first year level geology course before posting something so stupid and ignorant.
In fact, the idea he proposes is the “abiotic” theory, and it has professional geologists that are supporters in in several countries. It isn’t the preferred or consensus view, but it does have some empirical backing and and genuine science behind. The real problem may simply be that oil may be produced by both biotic and abiotic processes. The reality may not be an either-or situation. Oil was recovered in Sweden from bores that were deliberately sited to fail all standard site selection criteria. Admittedly it wasn’t much, but the existence at all was a surpirise. The short of it is that no “first year” level geology course would address a non-census theory like abiotic oil, any more than a first year “environment” course would address sceptical views of global warming seriously.
Geology is not needed. Advanced thermodynamics, especially a knowledge of chemical potential, is what is needed.
DUSTER:
“Oil was recovered in Sweden from bores that were deliberately sited to fail all standard site selection criteria. Admittedly it wasn’t much, but the existence at all was a surpirise.”
Paper Please.
Stewart,did he really need to put a sarc/ in?
Abiotic Oil?
http://www.viewzone.com/abioticoil
Nature Geoscience 2, 566 – 570 (2009)
Published online: 26 July 2009 | doi:10.1038/ngeo591
I did like the “hold your breath” idea to reduce CO2; since CAGW guys claim to believe this stuff, they ought to lead by example.
yea, yea; attempted sarc
But what about the property values…….? Much of Surrey being high priced ‘commuter belt’. Check out this up to date map of UK housing prices: Link to Zoopla.com http://www.zoopla.co.uk/heatmaps/
I think the ten trillion $ in oil may be worth pumping anyway.
It’s an English joke. Anything that affects property values is to be abhorred and reviled. Ten Trillion you say? That should just about pay off the UK’s national debt.
..they can do horizontal drilling for 100’s of miles…..
Well, they’d never get planning permission for a drilling rig in Surrey.
This is from 1958, it’s not unique
http://www.britishpathe.com/video/oil-in-surrey
I have a fairly large garden in Middlesex (Surrey near Heathrow) do you think I could get permission to drill for oil and if I found it would my house price rise or fall as a result. It would make interesting reading of the sales blurb if nothing else.
For sale.
Three bed semi with own oil well in garden!
James Bull
Check your property deeds. Do you own the mineral rights?
The Saudi Russian Venezuela freeze is a freeze at record high production rates… thus the price drop on the news.
We are not at peak oil and have decades of the stuff. Offshore Brazil is already huge and barely explored so far.
I can imagine Vlad’s face-palm. https://www.gunandgame.com/attachments/facepalm-putin-jpg.23214/
but but but……peak oil!
In a sane world, people are put in jail for price fixing.
How hard would it have been for the Telegraph article writer to look up the Kimmeridgian Age (152.1–157.3 Ma) of the Late Jurassic Epoch, rather than just checking when the whole Jurassic Period began? I mean, the entire ICS age or stage, penultimate of the Jurassic, takes its name from this formation.
During this age in Germany lived the famous feathered, maniraptoran dinosaur Archaeopteryx, related to birds.
That the North Sea oil fields are running dry while the Weald Basin is just getting started is another reason why socialist Scotland might want to stay in the UK rather than going independent.
Canada we are F- – k
Alberta there goes Pipe Line East.
We can send all of our ‘effluent’ though, Montreal has no problem with dumping that into the river.
100 bn barrels? That’s a lot of dead dinos.
Mostly comes from other carbon sources than dinos, but if BP or some consortium of Big Oil companies get to drill in the Weald, this could be there logo animal:
A big European stegosaur, the first of its family ever found. Would make a cute cartoon emblem.
Oops. Forgot its generic name, which is Dacentrurus.
Oilarausurus?
“Mostly comes from other carbon sources than dinos, …”
No, it comes ENTIRELY from other sources.
People come here for a proper discussion, please self-moderate the useless junk input.
Euroilasausurus?
This has to be a knife in the back to all those Greenies. Every global warming rally or protest gets snowed or frozen out, fixing the temperature data hasn’t worked out too well (thanks to Anthony et al), the climate models are a joke, most of the global population has lost interest .. and now billions of barrels of oil in England of all places!!
The Greenies remind me of the little boy trying to plug leaks in the dike. Stick your finger in one and another two pop up. It will be interesting how they attack this. I’m sure the fracking/pipeline/pollution hysteria will commence shortly.
If global temperatures start to decline over the next 5 – 10 years as several of the real climatologist pundits are predicting, I further predict the greens are going to vanish in the stampede.
Looking into the future will we go back into the good old days,…10cents a gallon for premium gasoline
wow… you must be older than me. I remember paying $0.17 a gallon – and only buying a quarter’s worth. (I just had to get from my girlfriend’s house and back.) Most of my young friends assume I’m exaggerating. They blow me off.
I was ripped off. I only have a faint memory of 25.9 cents/gallon.
Gasoline hovers aroud $0.25/gal., that is, with a silver quarter. It’s on the low side right now.
100 Billion times $33 is $3.3 Trillion bucks
That’s a lot of dough.
Per the article, only 3 to 15% of that 100B BBL is recoverable. Historically, future yield estimates from oilfield producers have been overestimated in many basins. At 3% the oil could cover current UK consumption for a bit over six years.
Note also that to recover the marginal BBL the EROEI becomes very close to unity (more than 60:1 in the 50’s, less than 10:1 now and closer to 3:1 for shale plays).
One might also point out that:
Waiting until world oil production peaks before taking crash program action leaves the world with a significant liquid fuel deficit for more than two decades.
As per abiotic, as I understand it, abiotic generation produces methane, not crude and and the amounts are quite small relative to what’s being extracted daily.
Frack it
Mr Kbetcha (1:19) is quite right if it were the only field operating. Another view would be that from this one addition to its domestic supply (at 3%) the UK could stop importing for 12 years.
The little fact-file caption indicatives 1bbl = 35 gal. I wonder if the 1 bbl = 42 gal conversion factor I have been using for the past 30 years is wrong?
New math?
unless that is an imperial gallon.
Steve R, imperial gallon compared to US gallon. Us is a bit smaller.
OK, that makes sense: 35*1.2 = 42. My bad.
Sure that isn’t in metric gallons?
One calculation is in metric gallons and the other in Imperial.
There are several different gallon standards. It really could mean almost anything. That is why most of the world uses cubic meters rather than barrels.
https://en.wikipedia.org/wiki/Barrel_(unit)
Sorry, forgot this part –
” An oil barrel (abbreviated as bbl) is a unit of volume whose definition has not been universally standardized. In the United States, an oil barrel is defined as 42 US gallons, which is about 159 litres[10] or 35 imperial gallons”
And then, there’s the Central English Channel Basin.
http://www.southampton.ac.uk/~imw/jpg-Petroleum-Geology/11PGS-Depth-to-Basement-Oil-Shale.jpg
There is no doubt that the UK has several attractive source rock (shale) basins to be horizontally drilled and fracked.
As a rule of thumb from US basin experience (Williston, Permian, Barnett, Niobrara) and Russia’s Bahzenov shale, for oil (not gas), only 1/4 of the basin geology will be commercially productive with oil at $100/bbl. And oil (not gas) recovery factors will be less than 5% of estimated OIP in that 1/4 of the geology.
For natural gas, the numbers are much more favorable. In the Marcellus, for example, it looks like about 2/3 rather than 1/4 of the basin is commercially productive even with the low US gas price the glut has caused. And recovery factors are running 11-12% with some sweetspots hitting 15%. The UK will desperately need CCGT fast and in quantity as its disastrous electricity policies hit home. So the gas numbers are a UK blessing if it would just get fracking.
Mr Lenigas serves lunch …
http://www.davidlenigas.com/uk-new-global-oil-powerhouse
The 100Bbbl was an unjustified extrapolation that the Weald Basin Kimmeridge is like Horsehead, the geological sweetspot. Which is why that location was chosen for the discovery well. If Weald is like the Bakken in the Williston basin, then half won’t contain sufficient TOC to form recoverable oil, and half the remainder wont comtain cemmercially recoverable oil at $100/bbl. so divide by at least 4 for OIP.
Then the recovery factor needs to be estimated from cores and the behavior of this well over time. Note the flow rate has already dropped from 700 bbl/day to ~450. That indicates low porosity, low permeability, or both in this clay formation. Best is sandstone reservoir. Next best is fossiliferous limestone reservoir. This is a clay based shaley source rock. The recovery factor for Bakken is 1.5% after fracking. The recovery factor for the ‘best’ shale (Eagle Ford) is 3%. MSM doesn’t bother to understand geophysics, and a small exploration company like has every incentive to see yue discovery through rose tinted glasses.
The comparison to the North Sea is just absurd. For example, the UK’s Brent field alone (sourced from the same Kimmeridge Clay source rock) has by itself produced 2Bbbl of crude since 1976, with an estimated recovery factor of about 50%. Brent was reworked in the 1990s at a cost of $1.5 billion to produce mostly natural gas, is now exhausted and being decommisioned by Shell. To date cumulative North Sea production is about 40Bbbl from conventional reservoirs. The Weald will never reach that. Too small geographically, too low a recovery factor.
The population density of England is about 100 times greater than S Dakota, I don’t know where you got your idea from! The population of the UK is about 65 million compared with the US 320 million and the US has a much bigger area 3 million sq miles vs. 94,000 sq miles for the UK.
Phil, it wasn’t my post, and was sarcastic.
1.5% recovery is based on old data. They are now doing 50 stage fracs and well spacing has dramatically decreased.
James D, so what is the Bakken recovery factor after all that technology you cite? Include refracs. Uhh… NorthDakota has data since they tax extraction. So does Oil and Gas Journal, an industry trade rag. Why rely on one source when there are several?
Did you know that multistage fracs are mostly related to the longer lengths of the laterals? Something about hydraulic pumping power…Uhhh. You want to argue, at least show up with oil field data rather than warmunist faith based evident ignorance.
Yes, that is deliberately insulting. Please study geophysics more, and comment less ignorantly after.
Yes indeed. Conventional (lol) oil has much greater oil density than shale. Frack a conventional deposit and who knows what recovery factors can be achieved. Ad in multilevel and multi-directional wells, the skys the limit.
Irony seems to have more than a whimsical dimension. Like the Al Gore effect: wherever he goes it snows, the loud unremitting assault on fossil fuels seems to have destroyed peak oil and and brought forth an enormously larger, more commonplace resource than was imagined. Some huge coal seams will be next on the discovery ledger. Offshore oil around the Maldives will be next to put an equivocal quaver into the islands’ strident anti-CO2 chorus. And ya know, when something like the Gatwick discovery comes along, it will be so irresistible to a government which has been casting about to rescue itself from the disastrous idiocy of its energy and enviromental policies that it will just ignore the greens and even their own family members whose renewable investments will be going down the tubes. Even I, when I hear that the planet is being killed off by eating meat, find an almost uncontrollable urge to throw a steak on the barbecue and pop the top off a gassy bottle of Rickard’s Red.
The health benefits of eating meat far outweigh the resources needed for producing it. http://nutritionfacts.org/?s=meat
Hi Chris_B: can you point to the exact video? I could not figure it out. Thanks!
Wonder what the future King Chuck has to say about all this talk of oil & steaks…remember, about 10 years ago he stated we only had 6 years to save the planet.
And oil off the Falklands – in deeeeeep water.
Argentina may take an interest . . .
And it will make he Shetland Basin look like your hand basin; technical difficulty cranked up to 11!
Auto
Argentina is VERY ineterested in that oil already and a while back started making claims to the Falklands. There is a real risk of another war there.
…at a better rate than expected of 463 barrels a day
Let me see. You are probably looking at a depletion rate of 65% or so and the well is producing $15K of oil per day on its best day. Out of that cash you are looking at royalty payments of say 20%, which brings down the take for the company to around $12K. But in a week you could be looking at $9K per day and a week after that $7K per day. And so on and so on. In the meantime you have to pay for the acquisition cost and the development costs. You have to pay the employees who help you get the oil out of the ground. And most of all, you have to pay the lenders their 8% or so for the money they gave you to pay for the drilling costs. To get 500,000 barrels of production per day you will need to get up to around 1,500 wells or more depending on the drill rates and those 1,500 wells will probably cost you close to a billion dollars, perhaps more.
Note that my back-of-the-envelope calculation depends on an assumption that the company managed to produce an average well in the formation. But that is very unlikely to be true because if the American producers are a guide, the company hit the sweet spot in the core area of the shale formation first. What the company has going for it is the low population density of England, which is not as crowded as South Dakota or Texas. As such, the drilling will not be all that visible and interrupt daily life in England and the company can be sure to operate free of pressures and scrutiny so that it can concentrate on making its shareholders as rich as the shareholders of Chesapeake, the pioneer in the shale space in the US.
Mouse over this for a while …
http://www.neighbourhood.statistics.gov.uk/HTMLDocs/dvc134_c/index.html
England, which is not as crowded as South Dakota or Texas.
Vangel, I’ve never been to England, so I’ll have to take your word for its population density. I have been to both South Dakota and some of the oil producing areas of West Texas. You should come over and do some sight-seeing some time. Just be sure you have a full tank of gas before you leave town….
: > )
And don’t forget a couple of these:
quick check shows the population density of England is 1142 people/ sq mile. Pop Density of S Dakota is 11. That’s greater than 100:1 difference!
“What the company has going for it is the low population density of England, which is not as crowded as South Dakota or Texas”
http://pre12.deviantart.net/e690/th/pre/f/2011/110/9/5/uk_vs__texas_by_sigrdrifa1-d3egqj5.jpg
Oy….you missed off the most important bit of Britain…..the Isle of Anglesey (Ynys Mon) North Wales, https://en.wikipedia.org/wiki/Anglesey
it’s a geologists wet dream (it rains a lot!!)
We do all right for a itty-bitty island.
Stewart Pid, 10:14
If you had gone to school in Russia, you would understand the abiotic discussion.
Russia has been very successful with Mendeleev’s theory, including producing
natural gas from 40,000 ft deep wells. I believe that this fact supports Mendeleev.
Nope. The oil and gas well you refer to is the Odoptu OP11 in the north Sakhalin basin. Deepest oil/ gas well on Earth. Exxon/Neftgas JV. According USGS 2011, the source rock for this basin is an Upper Oligocene to lower Miocene diatomaceous mudstone. A quite conventional marine sediment. Nothing abiotic about it at all. Abiotic natural gas (methane) does exist, but not in commercial quanties. Only major ‘deposit’ is methane hydrate on the floor of the Framm Strait. Abiotic petroleum is bunkum. The supposed Ukraine discovery was only bad geology.
Geology is not what is at issue. Chemical potential is what counts. Geologists don’t study chemical potential.
Huh?
Oil is simply polymerized hydrocarbon molecules, with methane being the simplest of the hydrocarbon molecules. Once you have methane, you can form any hydrocarbon all the way up to asphalt.
We know methane forms from organic materials, but it’s also clear that abiotic processes produce methane (and other hydrocarbons) as well:
http://www.pnas.org/content/101/39/14023.full
https://en.wikipedia.org/wiki/Lakes_of_Titan
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2829962/
The bottom line is that we are relatively ignorant about the various ways methane (and other hydrocarbons) form. I never cease to be amazed (or disappointed) by seemingly smart people who insist hydrocarbons cannot form through abiotic processes. They are spouting drivel from their lowest orifice.
Nope. LHl, you have it backwards. From kerogen we can via catiagenesis recover progressively lighter hydrocarbon fractions depending on the oil window, up thru the lightest, methane. NOT elsewise. Learn fossil fuel geophysics, and then provide less comment nonsense.
Nothing abiotic about it at all. Abiotic natural gas (methane) does exist, but not in commercial quanties.
======================
All oil must be abiotic since the fossil fable violates the 2nd law of thermodynamics:
http://www.pnas.org/content/99/17/10976.long
The abiotic reality an inconvenient truth for those who wish to maximize profit by fostering the illusion of scarcity, which is why fossil enthusiasts refuse to:
(i) acknowledge thermodynamic constraints, or
(ii) specify the reproducible “reducing conditions” that convert low energy carbohydrates into high energy hydrocarbons.
Petroleum feeds biology:
It is not made from biology.
Re: Kwarizme:
https://en.wikipedia.org/wiki/Thermal_depolymerization