Another headache for OPEC: Old fields find new life

[thackney]

Another headache for OPEC: Old fields find new life
https://www.chron.com/business/energy/article/Another-headache-or-OPEC-Old-fields-find-new-life-12740778.php
March 10, 2018

Bob Dudley, in his 38 years in the oil industry, has never seen anything like what happened with BP Plc's old fields last year: They gushed more crude.

"I cannot remember ever in my career having seen a negative decline rate," the British oil-giant's chief executive officer said in an interview on the sidelines of the CERAWeek by IHS Markit energy conference in Houston.

Dudley isn't alone in seeing mature fields dwindling less than expected --in BP's case surprisingly increasing -- giving the OPEC one more thing to worry about. As if the shale boom wasn't enough of a headache.

Better results from legacy fields, also observed by producers like Royal Dutch Shell Plc and countries like Norway, further complicate efforts by petro-states like Saudi Arabia to push prices higher by curbing supplies....

...But the need to stretch each dollar spent is exactly why Big Oil is getting more from those fields, according to Wael Sawan, executive vice-president for deep water at Shell. The lower decline rates are part of the response to low oil prices.

"Companies are focusing on the basics," Sawan said in an interview in Houston. "So there was a massive re-focus on existing wells. It's the cheapest and most profitable barrel that companies can access."...

[DB]

And just perhaps petroleum creation is a natural process of the earth and not just "fossil fuel" with a finite supply.

[thackney]

And just perhaps petroleum creation is a natural process of the earth and not just "fossil fuel" with a finite supply.

More likely:

Often, the key is simply to make sure the fields pump every day of the year, reducing downtime, executives said. Producers can, for instance, postpone maintenance to keep fields running.

"Oil companies with tighter capex budgets are striving to extract every last drop from mature assets," the IEA said in a report presenting its oil supply and demand outlook for the next five years.

But it is also very short term solution.  In the long run it costs to postpone maintenance and exploration.

Let me know when the trend continues decade after decade like normal declines in fields do all over the world.

[IsailedawayfromFR]

And just perhaps petroleum creation is a natural process of the earth and not just "fossil fuel" with a finite supply.

I doubt that tremendously as the rationale of this article.  After +40 years in the business as a Reservoir Engineer, primarily estimating reserves, there are other more salient reasons.

Chiefly, I suspect several things, such as

1. It is a truism I have found that the biggest fields almost invariably out-produce their estimated Ultimate Recovery.  In other words, the best place to find more oil is where it has been found previously.  This means decline rates are lessened compared to what they were estimated previously.

2. Decline rates are dependent upon what the previous production rates have been.  Sometimes producers scale back production rates due to lessened cash flow so basic declines can be less.  Look at previous periods of low oil prices.  Since production is slowed, so are decline rates.

3. One is not overly surprised if 'More' reserves appear as a result of improved estimates of decline rates when these same companies/countries substantiate what their reserves are for financial reasons.