Post #36 tho

De-growth! An actual some-what prediction!

Jiggs, would you like to put a timeframe on that now? Like over the next 5 years you believe we will see global negative growth?

Lol what are you even talking about? I just posted a link to an article describing how 2 oil giants are raking it in even with tanking crude prices. Here's a non subscription link: Link

They're literally churning out all the refined crude they can get their hands on because it's insanely profitable for them, even at these prices. Some analysts are saying it could far lower and still be profitable.

I'm not gonna bother dissecting your nonsensical stance, I'm here just to point out that oil prices are tanking, major oil players are still raking it in, and you have your fingers in your ears screaming about how this is somehow exactly what your model is predicting.

It's nonsensical dude.

http://www.jsonline.com/business/ele...281190721.html

Oil is just another commodity. You could make a similar graph for gold or coffee or w/e.

Read the f***ing headline in your link, genius ... it literally reads: "... despite drops in production."

Post 36 shows they all dumped expenditures, sold assets and generally got smaller in an effort to maintain free cash flow... You're sitting here pretending it's all BAU. You know, while writing the word "nonsensical" a lot, and apparently not understanding what is being discussed.

Lol, keep on keeping on, jiggs. I really hope you don't have money wrapped up in this, because you write about it like you do.

Good punt. I guess you missed that part of your own story, and just pretended my response was "nonsensical!!" ... Par for the course around here.

Next time you enter the fray, be more certain about what your source material is actually conveying.

Once again... to begin to have a viable denialist argument, you'll need to show that production can just keep on increasing so as to meet the needs of ever growing population. That assumption is no longer workable.

Almost everything i've read from you on this topic is nonsensical. It's not a huge stretch to say that.

Estimates of shale oil in Russia are in the trillions of barrels, not even counting what we are producing here, prices are tanking, and this doesn't count as production to you because something something not "real" oil.

Like, ok dude. We get it. You're sold on this.

My link was just addressing your comment that oil would be far too expensive to produce at 80/barrel - and while refineries aren't physically dragging it out of the ground, it's a major part of the production process, and um, they're still raking it in.

Well, to the hard-wired, it's often difficult to grasp. You all think that if you throw enough money at a problem, and "invest wisely" without regulation, it will all work itself out.

Again, I can pretend I've found a trillion barrels behind the moon. But that says nothing of the logistics of getting it to market, nor the capacity of the average consumer to afford it.

No one said there wasn't plenty of crap-grade oil and gas from shale. What we've said is that it's not cost-effective to harvest it, and when these companies run out of borrowing power, they'll stop producing it.

Grunch much? The dip in prices is quite temporary, just like every dip in prices since the crash.

It is interesting watching you guys utterly ignore the posts where companies admit they need price closer to $100-125 to make a buck, yet trumpet the few that suggest "we can still make money (on certain wells) at $80!!!" ...

The easily manipulated are always swayed by industry propaganda. You being a perfect example.

Mmmm, yeah. Because I read, and don't lie to myself. Try it.

LOL... fail. Like I said, review post #36, and explain the contradiction you're trying to pass off with your WSJ link, which doesn't actually say what you think it says.



Once again, for emphasis:

"The vast majority of public oil & gas companies require oil prices of over $100/bbl to achieve positive free cash flow under current capex and dividend programs."

Jeezus, read your story... It admits share price is down, revenue is down, production is down. From your OWN link:

Exxon's production declined 4.7% on an oil-equivalent basis, while Chevron's dropped 0.8%. That led to a 4.4% profit decline at Exxon's upstream segment and an 8.7% decrease at Chevron.

So, yeah, thanks for supporting my argument.

What is overall CapEx spending on E&P for all companies? If its trending up, why do I care if an oil major develops a shale play rather than selling off the asset for someone else to develop?

jiggs, you'd be a fascinating case study. so how much money do you have wrapped up in this, exactly? from the frenzied tone of your posting and this thread being started in response to a one off comment about peak oil in the bad posters thread, I have to imagine it's significant.

unfortunately, you're as bad at soul reading as you are scanning news stories.

also, this post starting had nothing to do with ATF, but was in response to someone just like you calling me out in the economics forum. ... he hasn't shown.

well, in the case of the majors, they ARE spending more (up around 10% each year) while producing less. ... I imagine smaller companies/nations buy up some of their stuff, but it would be silly to assume they've secured the leases, and are running at optimal efficiency, and are producing more, proportionately, than the majors would have been.

If majors are spending more CapEx and they are selling some of their projects to smaller players, then I don't understand the point about oil majors dumping CapEx. I think you are trying to say that oil isn't profitable at these prices so CapEx is going down, but if CapEx is actually going up than there isn't a lot of evidence for that.

Also, on a global basis, if that analysis is just of listed oil majors and ignores state oil companies then its missing the majority of the picture. NOC's control 75% of production and ~90% of reserves.

The visual effect of that graph is significantly reduced when you plot crude oil production on a 0-16.5 scale instaed of a 12.0-16.5 scale.

And of course it doesn't actually address anything at all about profitability or future production.

Jiggs, I think you missed this. Do you believe we will see global negative growth over the next 5 years?

Grunching, and didn't watch the presentation in the link, I see? Still working backwards from a conclusion you desperately hope to be true, huh?

The graph shows CAPEX spending through 2012. The cuts to CAPEX are a new development from late 2013, early 2014, going forward. You know, which is why it's kinda news.



It is interesting watching you rest your argument on what you don't see, as if private IOCs aren't as efficient as NOCs. Meanwhile, you're on record pretending a country past peak like Mexico is suddenly "saved" all because it finally has opened itself up to IOCs. So which is it?

When you're done being willfully obtuse, I think we can all agree that no one is more efficient, diversified nor innovative as the Western oil giants. It is axiomatic that as they scale back, so does world production. ... Sure, NOCs - which don't have to prioritize share-holder dividends - will continue to increase spending. But they're also running into the same natural limits that the giants have endured, and it's just a matter of time before they're also forced to admit this just isn't working.

Take Brazil, for example. Their No. 2 state-owned oil company - OGX - just went bankrupt last year. Meanwhile, their No. 1 - Petrobas - clearly needs oil price at $130 (per the chart in post #36 that you ignore). ... Then of course, there's Mexico's national desperation we've already covered. The Middle East? Well, hard to say, as they keep their books quite secret (with good reason, considering their sea water injections and push to offshore). Russia? Conventional production is already declining, so plans to maintain production are turning desperate (Arctic projects), and sanctions hammer their capacity to borrow.

Despite all that evidence just off the top of my head, if you can find a link showing how other NOCs can easily ride to the rescue and not only make up production to offset IOC downsizing, but still increase total global production, I'd love to see it. Unfortunately, all the evidence shows they're not special. They can pour money into the problem all they like. But that doesn't change the reality: All the sweets spots have been harvested.

The oil majors are the smartest, and they set the trends. To pretend state-owned companies can do what the XoM's of the world can't (proportionately) is pure hubris.

I saw your goalpost-shifting question, avoiding the destruction of your earlier post. Your attempt to pigeon-hole a response via a vague inquiry involving complex variables was noted, and ignored. It's impossible to say definitively that within a 5-year-window growth will turn negative. Within 10? Sure, I believe that moreso. 15? 20? Definitely.

But looking back 5-7 years, growth is already slowing, and will continue to slow as borrowing limits are reached. Do you deny this?

Lol, at destruction. You mean where you stated all the things that you don't believe alternative energy can do - even though its already doing them. Or where you claimed, without any proof, that Oil will magically stay between $80-$120/barrel where consumers will want more and suppliers won't produce any and the free market suddenly and inexplicably fails?

As I said earlier, I've got a pretty clear picture of where your arguments make no sense, so I'm not particularly worried about arguing around those points in big long blocks of text.

Anyway, I'd bet that growth will be higher for the next 5 years than it was for the past 5 years. And I'd bet that growth for the next 10 years will be higher than the growth over the last 10 years. I'd also bet that overall growth over the next 20 years will be positive.

But I find it funny that for something you so strongly believe and for something you think is so obvious, you still won't quite commit to actually definitively stating you believe your own crap over the next 5-10 years.

OK lets take a step back.

What is the point that your "the oil majors are dumping CapEx" statement trying to support?

I assumed you were trying to say it was because it wasn't profitable to drill at $80, which is why I asked about all CapEx spending and not just oil major CapEx.

Not sure why you provided a link to CapEx spending through '12 if you thought it was irrelevant, but agreed we should look at an updated number, what's the number through '14 for total CapEx spend?

Majors selling off rights and others spending the CapEx instead doesn't necessarily change much from a production standpoint.

State oil companies that don't have strong capabilities in deepwater or shale opening up their markets to bring in players with those capabilities will help increase production. That doesn't mean that if we're arguing that CapEx is plunging because oil prices are at $80 that we can ignore 3/4 of the market.

Not sure what link you are talking about either. If its the Douglas-Westwood presentation I didn't see the link to the full report and, while a consulting report is a useful data point, I wouldn't call it gospel either. Im looking at a consulting report right now showing Permian Basin shale break-even prices at $55, but somehow Im guessing if I posted that it wouldn't be taken as fact....

EDIT: Found that presentation link, its pretty terrible, assumes the conclusion and has a lot of really funny evidence for why the oil price spike they predicted didn't come to pass. As one example, oil prices aren't driving the decline in commercial flights in the US since 2005, industry consolidation is driving that.

No, the part where I stated none of them, together, can do what oil does, nor as efficiently. Your reading continues to betray you.

Holy crap. Where did I claim oil would stay between $80-120? I simply said that's where it has stayed, and it's not working for consumers NOR producers. Oil could easily spike beyond $120, or plunge below $80. ... And in doing so, the economy you so fervently worship would crap its pants in short order.

When you can actually get my argument correct, get back to me. Right now, you're arguing with straw men, while still pretending "the free market" will seamlessly sort everything out... You know, while not really sure what the market will turn to.

lol... mmmkay... remember this discussion when it doesn't.

Translation: "I've created a straw man for you... if you don't agree to it, lolyou!!!"

Growth is already slowing. Conventional production is flat for 9 years. Oil majors are downsizing. Shale wells average decline at 70% per year. Foreign investors bailing. Cash injection has run its course. ... But to free market trolls, the future has never looked brighter! ...

'14-'18 growth being better than '09-'13 is a snap call if only because the odds of seeing something as severe as the financial crisis that soon is exceedingly low.

Not sure how you had trouble finding it, considering I've posted it numerous times, and referenced the post in which it was last linked numerous times.

I doubt you actually watched it. Just jumped right to your surface diagnosis, like always, never going any deeper. You're like a doctor telling a patient, "your symptoms are caused by these symptoms."

It is funny seeing someone like you suggest a power point presentation at Columbia U. from the managing director of Princeton Energy Advisors, a former investment banker focusing on raising capital for energy companies, and a regular contributor to Foreign Policy, Oil & Gas Journal, and World Oil magazines would be "terrible," ... as if you know better. As for the one (1) example you cite, are you completely serious? ... You couldn't be more wrong. What in God's name do you think caused the industry consolidation in the first place?

Fuel Prices Threaten Airlines' Recovery

The International Air Transport Association, which represents more than 240 carriers world-wide, Monday lowered its industry profit forecast for next year to $7.8 billion from its June estimate of $9.6 billion, citing fuel prices and the broader market credit crunch.

Airlines Expected To Shrink As Peak Oil Bites

To fully appreciate the impact that soaring oil prices have had on the nation's beleaguered airline industry, consider that U.S. carriers will likely spend $60 billion on jet fuel this year—nearly four times what they paid in 2000. Because of the spike in fuel costs, airlines now lose roughly $60 on every round-trip passenger, a slow bleed that puts the industry on pace to lose $7.2 billion this year, the largest yearly loss ever.

Few industries spell out peak oil quite as clearly as the story of air travel the past 6-7 years, and yet deep-thinker here steps right in it, pretending fuel price somehow isn't what has led to less flights. ... Jeezus, dude.

Its not. The flights aren't coming back if oil goes to $50.

Good to know investment bankers are now Jiggs approved sources though...how much time have you spent reading through banker presentations that you haven't learned they are mostly bull****?

Picking things that are happening in the economy and saying "see that? Peak oil" is not a very convincing argument and sort of the crux of what you have been doing going on five years now.