Oil Found Everywhere, But Still Not Enough Of It

Yesterday Carlos Ghosn, head of Nissan/Renault, said that oil needs to stay above $70 a barrel or no-one will end up buying his fab new Better Place-assisted electric cars. So he won’t be pleased to hear about the latest in a recent flurry of oil finds that seem destined to drive prices down, or at least not towards the $200 that might push electric cars into widespread popularity.

The latest bunch of impacted fossils to be brought gurgling to the surface is in Uganda, where Tullow Oil says it’s found a “significant” amount, probably in the hundreds of millions of barrels – not that significant then, but pretty big news for a company of Tullow’s size. This is added to their other big find, in partnership with Andarko, Woodside and Repsol, of a major region of oil off the coast of Sierra Leone. Tullow shares rose throughout yesterday and today as a result of the news, from £10.89 to £12.44.

Meanwhile Brazil’s Santos Basin has yielded some more hydrocarbons for Petrobas, after a new well, Abare Oeste was drilled this week – it’s the latest bonanza for the state-owned oil company, whose manoeuvreing into the “pre-salt” oil fields off Brazil’s coast looks set to make the country very rich indeed, if it can find a legal way to dominate the region. Once you had President Lula describing Brazil’s biofuel production as turning the country into a “green Saudi Arabia” – whatever the potential environmental wonkiness of biofuel, Lula is now clearly putting carbon-rich fuel at the heart of his country’s development, much to green campaigners’ concern. It’s the same question that cropped up a week ago – how can developed nations, whose growth has been dependent on carbon emissions, prevent a developing nation from increasing its carbon output with being hugely hypocritical? And in this case, if Petrobas didn’t move aggressively, then one of the other companies would have done.

Take a look at the further recent prospecting for proof. BG, who helped find Abare Oeste, have also recently bagged their own bit of offshore Brazil with the Guara field; Repsol, who are also in on the Abare Oeste deal, said this week that they’ve also found more natural gas in Venezuela. Desire Petroleum, not the catchphrase for the pro-carbon lobby but a UK-based oil company, is getting ready to tow a rig all the way to the Falklands, where it believes it can tap 3bn barrels. And of course there’s BP, who after drilling one of the deepest wells of all time found a “giant” field in the Tiber region of the Gulf of Mexico. Sucking up all the oil from depths greater than that Mount Everest is tall is going to be difficult though, and there are some pessimistic projections that suggest Tiber could yield just 150m barrels out of the 3bn believed to be down there; Goldman Sachs analysts said the find was “hardly transformational and does not provide a solution to their thin pipeline of new projects in the 2010-13 period”.

This recent flurry has been enough to have people saying that peak oil theories are damaged by them, but in reality it’s a condensed little patch of discovery that doesn’t do justice to the lack of investment in prospecting from major oil companies in recent years. If we need to find, as is claimed, 45 million (as yet completely undiscovered) barrels a day from 2030 onwards, these finds barely begin to cover that kind of demand.

But carbon fans can take heart from this research done in Sweden, that says that fossil fuels don’t actually have to be made from fossils, but out of any old crap floating around the inner crust of the Earth that succumbs to the great heat and pressure down there. They say that drilling to these depths will be worthwhile because of the high success rate, and that “all types of rock formations can act as hosts for oil deposits”, so countries that haven’t previously enjoyed oil millions might start to be able tapping into that market. The scientists would have said more but they were silenced by a blow-dart fired by a Greenpeace protestor. Not really, but jeez, this is bad news for emissions if it turns out to be true.

Posted by Ben Beaumont-Thomas in Green Rush | September 17, 2009 12:38PM |