[Leica] IMG: PAW 29 (ric)

[douglas.sharp at gmx.de (Douglas Sharp)]

Greg, you're right about the 'low hanging fruit'.

There very probably isn't going to be any considerable drop in the price 
per barrel ever again.

The main exploration targets are now on 'higher branches' in remoter 
areas and at previously inaccessible depths offshore, both on and beyond 
the continental shelf and in previously protected areas of the 
environment. (i.e. Alaska (already suffering), much of Canada (The 
Athabasca Tar Sands in Alberta have been in production for quite a 
while,. Similar deposits have since been found in Venezuela's Orinoco 
Basin), the Antarctic and South Atlantic Shelf (one reason for the 
Falklands 'War'), below the northern polar ice cap (however long it 
lasts), the Amazon Basin (by-bye rainforest), Central Africa (bye-bye 
Gorillas) etc.).

In fact, the recoverable oil content of the tar sands in Canada is 
estimated at around 300 Gb (billion barrels), even greater than the 
(estimated) Saudi Arabian oil reserves

Exploration and production costs for these will play their own part in 
maintaining currently exorbitant prices per barrel. When I left the 
business a few years ago, exploration companies were already downsizing 
their workforces because of rock-bottom barrel-prices of around 20 USD

When I was still in the business (until the beginning of 2003), 
exploration was already well under way in deep waters around the globe, 
like West of Shetland and the South China Sea, although the Pacific was 
as good as untouched at the time, with the exception of coastal areas, 
but speculative exploration is now seeing a boom there too.

So-called strategic reserves will soon begin to enter the game - mostly 
deposits that were not economical to exploit because OPEC oil was so 
cheap - as large deposits such as the Norwegian and UK North Sea are all 
but depleted. So we can soon expect more exploitation of tar-sands, 
oil-shales etc. deep or hard-rock reservoirs, requiring expensive 
hydraulic fracturing to increase pore size, as the economics of 
production become more attractive.

In the meantime, many companies are pinning their hopes on methane 
hydrates (a highly pressured ice comprised of methane and water) that 
are estimated to contain more than twice the energy of global reserves 
of oil and gas, though the actual extent of such deposits and whether 
and how they may become are exploitable remains more or less unknown.

It's a grim scenario. But the future scenario for drinking water looks 
even worse!!

Best from Hannover
Douglas (Ex-Senior Exploration Geophysicist)






Greg Lorenzo wrote:
> The low hanging fruit (wrt petroleum) is pretty much been picked over 
> except for Russia and the Middle East. This, plus growing demand from 
> China, India and other emerging economies doesn't bode well for future 
> energy prices.
>  
> In the US lower taxes mitigates this somewhat as compared to Europe and 
> Canada but the real hope for reduced prices in the near term is a 
> significant reduction in demand. In my two recent long distance road trips 
> it is real apparent that there is a major reduction in people driving 
> RV's, large SUV's and massive trucks. Both times I left the V8 road car at 
> home and my Honda Civic rewarded me with highway mileage in excess of 48 
> MGIG.
>  
>  
> Greg Lorenzo
> Calgary, Canada 
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