Chapter -1 final last new font final - petrofed.winwinho...

Bob MacKnight
Lead Analyst, PFC Energy
Non-OPEC Decline Rates
Accelerate
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declining at a global average rate of 9.4% a year
(6.58% including the FSU).
In other words, not only were higher oil prices
unable to arrest the drop in production, but the
decline rates actually accelerated in recent years.
The cumulative impact is that base oil production
outside OPEC and the FSU (for fields online before
2000) had declined by 40% between 2000 and
2008. New supply, therefore, was merely
offsetting drops in base production with most of
Decline rates in non-OPEC countries have risen that offset coming from production rises in the FSU
since 2002, despite the investment imperative of a – and even then, as decline rates kept rising, new
high price environment. By 2008, non-OPEC source was unable to offset declines leading to
fields outside the FSU which were producing in negative production growth.
2000 were declining at an average rate of 9.4% a
year. The rate would be 6.6% if the FSU were
Regional trends in decline rates
included. The decline rate has been increasing
steadily in the past five years, evidence of the • Europe shows the largest decline rates in the
industry's inability to arrest decline in mature non-OPEC world, primarily as the result of the
fields. Regional variations, however, are maturity of North Sea oil production. By
important. In Europe decline rates for mature 2008, the decline rate for fields producing oil
fields are in excess of 30%; in Asia Pacific rates are
as low as 4%. And just as high oil prices were
unable to reverse decline rates, it is unlikely that
low oil prices will accelerate them: aggregate
decline rates are driven by resource depletion.
in 2000 was over 30%, double the decline rate
in 2007. In fact, base production from these
older fields in 2008 was just 32% of what it
was in 2000 – a loss of approximately 3.5
million b/d.
Decline rates accelerate all over the non-
OPEC world
Decline rates in non-OPEC and non-FSU supply
have risen steadily in recent years, despite high oil
prices: fields that were online in 2000 have been
declining at an average global rate of 6.2% a year
in the period from 2000 to 2008. Even that
number aggregates lower decline rates in 2000-
2003 with rising decline rates thereafter. By
2008, fields in non-OPEC countries and outside
the FSU that were in production in 2000 were
• Non-OPEC Middle East and North Africa
(MENA) follows with decline rates for older
fields in 2008 being 9%. By 2008, non-OPEC
MENA fields were producing 40% less than in
2000 reflecting across the board declines in
Egypt, Syria, Oman, Tunisia, Yemen and
Bahrain.
• In non-OPEC West Africa decline rates were
6.6% in 2008 with drops coming from Gabon,
Congo and Cameroon. In total, the region's