"The world lacks the means to produce enough oil to meet rising projections of demand for fuel over the next decade, according to Christophe de Margerie, head of exploration for Total and heir presumptive to the leadership of the French energy multinational. The world is mistakenly focusing on oil reserves when the problem is capacity to produce oil, M de Margerie said in an interview with The Times."
World 'cannot meet oil demand'
London Times, 8 April 2006

"Gold hit $600 for the first time in 25 years on futures markets as the commodities boom continued, and a top Opec official admitted there was nothing the oil cartel could do about soaring crude oil prices."
Oil worries fuelling gold's 25-year high
Daily Telegraph, 7 April 2006

"Opec is powerless to bring down oil prices that are closing in on their record $70 a barrel high, United Arab Emirates’ oil minister Mohammed bin Dhaen al-Hamli said on Thursday. 'Fundamentally there is nothing we can do,' Hamli told reporters when asked how Opec might tame oil costs that are at their highest for a quarter of a century in real terms.... Opec, which accounts for over half the world’s oil exports, has been pumping almost flat out for months.... Hamli, in Paris for a major oil conference on Friday, expressed some concern at last week’s steep drop in US gasoline stocks. The United States, consumer of more than 40% of the world’s gasoline, is starting to gear up for the summer driving season when motor fuel demand peaks. 'The United States is a big and important market. When there is a drawdown we are a little bit concerned,' he said. OPEC still has some spare production capacity, primarily in Saudi Arabia, but Hamli noted this oil was the sort of heavy, high sulphur crude that refiners find difficult to process."
Opec toothless to tame high oil prices : UAE
Reuters, 7 April 2006

"High oil prices have helped to spur investment needed to calm world markets, but soaring project development costs could stifle production activity, Opec ministers warned on Friday. 'Cost is a problem,' said Qatari energy minister Abdullah al-Attiyah. 'Costs can sometimes kill the project. I am concerned about that. You see the contractors trying to increase the cost very dramatically. Costs may triple from estimate costs,' Attiyah told a conference in Paris. While US crude is trading at around $67, within sight of the record of $70.85 a barrel hit in August last year, other raw materials, including metals have also soared, driving up the price of projects in the oil industry."
High costs threaten oil projects: Opec ministers
Financial Express, 7 April 2006

"The world was told that the Russians would save us. The Soviet Union and its pathetic 14 million barrels a day was dead. When they upgraded their extraction techniques, oil was going to be around $10 a barrel, we would be swimming in it. In 2004, Russian production grew by 675,000 barrels a day, in 2005 by 222,000 barrels a day and this year the Russian government told us it was going to put on another 240,000 barrels a day. So far they have put on 170,000 barrels a day. It is about 9.4 million barrels a day and it is not enough."
Peak Oil Passnotes: Oil Prepares to Push On
Resource Investor, 7 April 2006

"My view is that 'easy' oil has probably passed its peak."
Jeroen van der Veer, CEO of Royal Dutch Shell
Financial Times, 24 January 2006

"We have entered the post-oil era. I want to draw all the consequences of this and give a real impulse to energy savings and to the use of renewable energies."
Dominque de Villepin, French Prime Minister
France promises aid to households over oil price
Reuters, 1 September 2005

"As old wells become depleted their pressure drops.... So although there may be plenty of oil left in a reserve, its later production can only be extracted more slowly. For example, the biggest field in Saudi Arabia already has to be pumped with large quantities of seawater to maintain pressure and daily production levels.... What forecasters want to know is when global daily production capacity will peak and at what level. At the point that oil (and later gas) demand exceeds the daily capacity to pump, major adverse dynamics will come into play such as large increases in prices and supply tensions, which will have a major impact on all economies. The most pessimistic scenarios from credible analysts put the advent of global peak oil as early as 2008, with a maximum daily production level of not much greater than the current level. As anticipated oil demand growth is around two per cent per year, this is a precarious prognosis."
The Energy Timebomb
RICS Business, January 2005

http://business.timesonline.co.uk/article/0,,13130-2124287,00.html

The Times, April 08, 2006

World 'cannot meet oil demand'

By Carl Mortished, International Business Editor

THE world lacks the means to produce enough oil to meet rising projections of demand for fuel over the next decade, according to Christophe de Margerie, head of exploration for Total and heir presumptive to the leadership of the French energy multinational.

The world is mistakenly focusing on oil reserves when the problem is capacity to produce oil, M de Margerie said in an interview with The Times. Forecasters, such as the International Energy Agency (IEA), have failed to consider the speed at which new resources can be brought into production, he believes.

“Numbers like 120 million barrels per day will never be reached, never,” he said.

The IEA predicted in its World Energy Outlook that global demand for crude oil would reach 121 million barrels per day by 2030, of which more than half would be supplied by Opec. The agency predicted that more than $3 trillion (£1.72 trillion) of investment in wells, pipelines and refineries would be needed to raise output to such levels.

However, Total’s exploration chief reckons the output rise is impossible, given available resources and geopolitical constraints on gaining access to reserves in Opec countries.

M de Margerie argued that the resources were simply not available. He said: “Take Qatar. How many projects can you have at the same time? You have more than 100,000 people working on sites. It’s a big city of contractors. Now they have the problem of having to build a new power plant to supply a city of contractors.”

The IEA was mistaken in using recovery factors that failed to consider the timing of new resources coming on stream. M De Margerie said. The world was confusing the issue of reserves with the scale of the problem in producing those reserves. He said: “The oil reserves are there, that is the good news, but what we can bring on today to meet demand is limited by factors other than what scientists see in a lab or think-tanks.”

The Total exploration chief said he was the likely successor to Thierry Desmarest, the current chairman and has been nominated to join the company’s supervisory board.

"Whilst the situation in relation to post-peak UK oil production in the North Sea is reasonably clear, the British government’s position in relation to global oil supplies is more opaque. Claire Durkin, head of the Energy Markets Unit at the Department of Trade and Industry, spoke at a conference on oil depletion organised by the Institute of Energy in London on 2 November 2005. She has responsibility for international energy policies, and in particular for securing a safe and secure supply for the UK. Although the meaning of ‘imminent’ was not defined, the text of her formal presentation concluded that 'There are uncertainties but we are not in imminent danger of global oil production peaking…. But the world faces serious energy challenges…'. The principal challenge identified was the need to ensure that the development of global oil reserves 'is timely, sufficient and sustainable' bearing in mind that a 'Huge amount of investment is needed throughout the global oil supply chain' and that 'A greater proportion of future supply will come from countries currently perceived as politically or economically unstable'. However, Ms Durkin also spoke beyond the text of her prepared presentation. In discussing when the global peak might be she said: 'We just don’t know… I don’t think OPEC is a given…. We are not talking comfort zone…'. She also referred to the difficult dilemma that government faces between 'waking people up to the realities' and 'not scaring them'."
'Power Politics' - The Dash For The World's Energy Resources
RICS Valuation Conference, 29 November 2005

"The press headlines for this story — US Govt. slashes 2025 forecast for OPEC production by 11 million barrels per day — focus on the increased long term forecast for the price of oil (which many will regard as still too optimistic), but the real news is that the EIA has downgraded its long term forecast of production for 2025 from OPEC by 11 million bpd : ' OPEC production is now likely to be about 11 million barrels a day less than what the EIA projected in its 2005 report. ' (Associated Press). To put this in perspective, this is more than the whole of current Saudi production (9.5million per day). There is some reference in the report to 'lack of investment', but if this is the reason for the poor outlook, the report does not go on to explain why this might be the case in an environment of high oil prices. Some might say that OPEC wants to keep the oil price high; others that there is a shortage of manpower and equipment; others that OPEC knows the oil isn't there in the first place. Whichever it is, the outcome is the same: less oil available going forward than had previously been assumed. The net result is that global production/consumption between now and 2025 will not exceed 111 mbpd according to the EIA (a couple of years ago in its 2004 International Energy Outlook the EIA forecast a total global production capacity of 126 mbpd by 2025), although it also forecasts 118 by 2030 (compare this with Peak Oil 'pessimists' who tend to be in the range of 90 - 100 for maximum production somewhere between 2010 and 2020).... It seems the only way the forecasters can now deal with this situation is to trim their figures for future oil demand (which is what PFC said would be necessary back in September 2004). EIA oil consumption growth forecasts therefore now seem to have been cut from 1.9% pa down to 1.4%. Basically this is a 'demand destruction' scenario driven by tightening supply/demand imbalances pushing up prices and in turn reducing consumption. Total global non-conventional oil production is shown by the EIA as increasing from 2.49 million barrels per day in 2004 to 9.25 in 2025, with most coming from 'Other North America' (presumably Canadian tar sands), Asia (China and India?), and South and Central America (presumably Venezuelan heavy oil).... Meanwhile somehow losing 11 million bpd of forward OPEC production doesn't seem to have made the front pages! "
Comments on revised US Govt forecast for OPEC
From The Wilderness Publications, 13 December 2005

"OPEC producer Kuwait's oil reserves are only half those officially stated, according to internal Kuwaiti records seen by industry newsletter Petroleum Intelligence Weekly (PIW). 'PIW learns from sources that Kuwait's actual oil reserves, which are officially stated at around 99 billion barrels, or close to 10 percent of the global total, are a good deal lower, according to internal Kuwaiti records,' the weekly PIW reported on Friday. It said that according to data circulated in Kuwait Oil Co (KOC), the upstream arm of state Kuwait Petroleum Corp, Kuwait's remaining proven and non-proven oil reserves are about 48 billion barrels."
Kuwait oil reserves only half official estimate-PIW
Reuters, 20 January 2006

"The IEA predicted in its World Energy Outlook that global demand for crude oil would reach 121 million barrels per day by 2030, of which more than half would be supplied by Opec. The agency predicted that more than $3 trillion (£1.72 trillion) of investment in wells, pipelines and refineries would be needed to raise output to such levels. However, Total’s exploration chief reckons the output rise is impossible...."
World 'cannot meet oil demand'
London Times, 8 April 2006