Wednesday, March 02, 2005

The Elephant has Left the Building.

The biggest oil fields produce an inordinate amount of our overall oil supply. (See one of Matthew Simmons presentations for a fuller look at this, sorry, no time to link right now, but it's in a prior post.)

Each of the biggies has it's own timeline, depending on how big it was to start, when it was discovered, how hard it's been pressed, what technologies have been used, etc, but when they start to decline, they have a big impact on the overall Hubbert's Peak curve.

Here's an article from Bloomberg about one biggie in Mexico, declining faster than expected.

Salient points:

- It was discovered roughly 30 years ago. Most of the big discoveries are old. We are unlikely to find many more that big and the last few years have been disappointing.

- Since 2000, they've been pumping in nitrogen to increase pressure and keep the oil flowing. These technologies can cause a temporary spike in production, then later sharpen the decline.

- Smaller fields they are bringing on line probably won't make up for the loss of output from this big field.

PS. The largest oil fields are sometimes referred to as 'elephants'.