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08 December 2011

Repsol CEO on Peak Reserves

Days ago an Oil industry service company published an article disguised as a journalistic piece with some interesting remarks. It makes me wonder if it refers to the same World I live in.

Peak oil debate losing relevance due to new upstream technology: Repsol CEO

The debate over whether the world's reserves of hydrocarbons have now peaked and are in decline has lost relevance over recent years as new technology allows oil companies to find and exploit new hydrocarbon sources, the CEO of Repsol Antonio Brufau said Tuesday.

When did Oil reserves peak? er..., well they peaked in 1850 when their large scale usage by Man started. It just happens that Oil and Gas are the produce of chemical processes that take millions of years to synthesize them from dead organic matter. The rate of consumption by Man is incredibly faster, hence world reserves of hydrocarbons have been on a continuous decline ever since the very first oil well was drilled (or excavated to be more precise). Unless of course these gentlemen have joined the holy church of abiotic oil.

It goes on:

"The speed at which technology changes and its consequences have taken us largely by surprise. The peak oil debate, for example, has lost a great deal of its relevance in the past three years," Brufau told the World Petroleum Congress in Doha.

I once wrote that predicting Peak Oil is no longer a relevant exercise, but for the simple reason that we were living it right now. And yes, the interest on the subject may wave waned in recent times, but because we just got ourselves into an economic maelstrom, that well, was triggered by rising energy prices. The fact that world Oil production has stalled during the meantime, in face of historically high prices, seems to be irrelevant for Mr. Brufau.

Still not satisfied:

"The possibility that usable resources under commercially viable terms will run out is no longer a concern in the short or medium term," he said.

Interesting, so Repsol was afraid that Oil reserves could end in the short to medium term. For someone that doesn't seem to understand that they peaked once Man started extracting Oil this is an enigmatic remark. It is the first time I ever heard of someone having this sort of doubts, even the most pessimistic forecasts point to Oil reserves still existing 100 years from now.

And the grand finale:

Brufau said Repsol's shale reserves in Argentina are currently profitable to develop at $30/barrel finding, development and operating cost.

One of these days some local leader may just get enough of these claims, go on a nationalization spree and then tell these smart heads: "Now give me 30$ Oil!"

It is an interesting world that of Oil executives, one where prices are always low and production for ever rises.

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