Thursday, 3 July 2008

Oil Megaprojects update indicates schedule slipping

As a confirmation to what IEA is reporting now in their Mid-Term Oil Market Report, Khebab of TOD has posted a new Megaproject update (July 2008).

The main finding is distilled in this image:

So, peak at 2010, very slightly declining plateau (from megaprojects) until 2012 or so and then a rapid decline. NB! The additions in the graph only accounts for big oil projects - smaller additions, non-conventionals and biofuels are not included.

A more telling graph is this animation whipped quickly together:

It shows how projects have been pushed forward in time in just six months. Completion of off-shore projects and other mega projects in difficult areas is apparently showing to be more complicated than expected.

Do note that the additions for later years are mostly project reductions from earlier years being pushed forward in time.

If one substracts reductions from additions, the overall real additions beyond 2012 that are visible now is basically abysmal.

This goes to show with how short horizon oil world is operating. Beyond 5 years, we are flying on a combination assumptions, hunches, extrapolation and wishful thinking.