Dwindling oil reserves weigh on Malaysian growth

The recent decision by Petronas, the Malaysian state energy group, to take a stake in Rosneft, the Russian oil producer, underscores worries about Malaysia's dwindling oil reserves. The $1.1bn deal to gain access to Russia's oil fields comes as Petronas recently reported that domestic oil production last year fell by nearly 5 per cent to 700,000 barrels a day. Malaysia's is south-east Asia's largest oil producer after Indonesia.

(2006-08-11 18:58:56 SGT) [Energy] Permalink

Indonesia's LNG supremacy wanes as Chevron's fields run short

peakoil.com -> bloomberg.com :

Indonesia may lose its dominance of the world's liquefied natural gas market because fields operated by producers such as Chevron are running out of gas faster than expected. Chevron, which supplies gas to the world's largest liquefaction plant on the Indonesian part of Borneo Island, told Indonesia's government on July 17 there isn't enough gas to meet commitments to customers in Japan, South Korea and Taiwan. Indonesia's LNG sales will fall 19% this year.

Indonesia, the world's top LNG supplier for three decades, is failing to find new supplies of gas just as prices and demand for the cleaner-burning fuel have surged to records. Indonesia started exporting LNG in 1977. It shipped 23 million tons in 2005, more than Malaysia's 20.8 million or Qatar's 19.8 million. Indonesia will probably fall to third place next year.

Japan buys 40% of the world's LNG and depends on Indonesia for a quarter of its LNG imports. The gas is part of a strategy to reduce the country's reliance on Middle East oil. A contract to supply 12 million metric tons a year to Japan may not be renewed when it expires in 2010 because gas production are being earmarked for delivery to Java by pipeline, Energy Minister Purnomo Yusgiantoro said in February.

- Two of these Indonesian gas pipelines lead to Singapore. The Indonesian depletion situation is getting quite serious. First they are terminating LPG exports, now they are reducing LNG exports. How long before they are unable to supply the piped gas that powers Singapore's electricity?

For now gov.sg has decided we will import LNG (from Qatar, most probably). But I think Singapore's got to go nuclear. And wind, and solar, and ocean thermal/tidal, maybe even geothermal. A nuclear power plant at the edge of Tuas, wind turbines and nano-solar paint on HDB flats, thin-film translucent solar cells on skyscraper windows, offshore wind farms. Things like that. Well, it's either we really diversify our energy sources (LNG isn't much of a diversification) - or go back to the dark ages, and live in "interesting times".

BP's Prudhoe Bay a "giant water field"

peakoil.com -> resourceinvestor.com, adn.com :

BP's problem of corroding pipes is worsening as the nation's largest oil field ages and more water and less oil is produced during drilling. "Really, we are a giant water field," said Bill Hedges, BP PLC's corrosion expert, explaining that what comes up now during drilling is three-quarters water.

The shutdown this week of the Prudhoe Bay oil field because of severe corrosion found in transit lines is raising questions about the condition of the rest of the field. Oil first flowed at Prudhoe Bay on June 20, 1977.

- Having read Matt Simmons' "Twilight in the Desert" not too long ago, I am now able to appreciate just how ominous this is. A water cut of 75% is an absolute nightmare. This is what happens when an oilfield goes past peak and into decline - you get more and more water, and less and less oil. Alaska peaked in 1988 at 2.14 mbpd (million barrels per day). And it's now 2006 - 18 years past Alaska's peak date. Way, way, past peak.

I watched an Australian documentary recently on peak oil. The reporter was shown an old oilfield, still pumping away. But the content that came up was 99% water. A bucket was filled up with it, and poured away to show that it was almost all clear water, with just a tinge of brown. Not much useful stuff in there. And that is going to be the fate of all oilfields. Like I said, it's ominous.

(2006-08-11 12:56:33 SGT) [Energy] Permalink

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