OECD Oil Production

OECD Fig 1 The OECD has only 4 significant oil producers: the USA, Canada, Mexico and Norway. The UK has now become a small player with production ~ 1 Mbpd alongside small producers Denmark and Australia. The revival in OECD oil production began at the beginning of 2012, led by US light tight oil (LTO) and Canada. Production in Mexico and Europe are actually in decline. The near term peak in OECD production was 24.13 Mbpd recorded in November 2015. The slow decline since then reflects the oil price crash and dramatic slowdown in US drilling.

OECD Fig 2 The shape of the N American stack is dominated by the USA where LTO production began to accelerate early in 2012. The near term peak was in April 2015 at 20.12 Mbpd.

OECD Fig 3 European oil production is dominated by the North Sea and in particular by Norway. The “other” category is dominated by Denmark with a contribution from Italy. The steep decline since 2000 reflects what may eventually happen to all offshore provinces. Record high oil prices, 2004-2014 leading to high investment levels, were eventually able to arrest and to a limited extent reverse the declines. The high on this chart is 7.1 Mbpd in April 2002, the low is 2.94 Mbpd in September 2013.

OECD Fig 4 Oceania oil production is dominated by Australia, a continent rich in coal and uranium, it lacks substantial oil resources. Australian production shows ragged decline since 2002 with highs of 730,000 bpd in 2002 and lows of 320,000 bpd in 2016. The other category may include New Zealand hence the inclusion of “other” with the OECD. “Other” is currently <100,000 bpd.

OECD Fig 5 The dips in US oil production in September 2005 and September 2008 reflect storm damage to offshore Gulf of Mexico production facilities by hurricanes Rita and Ike (requires verification). After many years of decline and stagnation, US oil production took off in 2012 on the back of the shale revolution only to stall on the back of the oil price crash of 2014. US oil production has long been held up as a shining example of peak oil. Fracking and LTO production meant that US production surpassed the 1971/72 peak in 2014. The USA regained and retains its position as world number one producer.

OECD Fig 6 Canadian oil production has grown steadily since 2002 and now stands at over 4.5 million bpd. Canada is the 4th largest producer in the world. Canadian production  comes mainly from on-shore Alberta and is a mix of conventional oil, LTO and tar sands. Since 2014, Canadian production has been on a plateau. The sharp temporary drop in May 2016 was caused by the Fort McMurray wild fire that damaged facilities linked to tar sands production.

OECD Fig 7 Mexico’s oil production used to come mainly from the giant Cantarell field located offshore Gulf of Mexico which produced at a rate of 2.1 Mbpd in 2003. Production from that field was boosted for many years by a massive nitrogen injection program, that is until the injected nitrogen hit the producing wells and production went into steep decline. Around 2009 nitrogen was diverted to neighbouring Ku-Maloob-Zaap field that arrested national declines for a while but since 2014 these declines have resumed. The high point of 3.9 Mbpd was reached in April 2004. Production has since declined to 2.39 Mbpd. State run Mexican oil production is in deep trouble and the government is currently trying to open offshore areas in the Gulf of Mexico to IOCs.

OECD Fig 8 Norway is Europe’s largest oil, gas and hydroelectricity producer. The oil production peak on this chart is 3.49 Mbpd reached in July 20o2 and the low point 1.78 Mbpd recorded in June and September 2014. The decline in Norwegian oil production comes down to natural reservoir depletion combined with a shortage of new fields coming on line to compensate for the natural decline process. The period of sustained high oil price leading to higher investment eventually turned things around beginning in 2012. The Giant Johan Sverdrup oil field is scheduled to come on line in 2019 that at peak will produce around 600,000 bpd. This will have a large positive impact upon Norwegian production.

OECD Fig 9 The all time high in UK oil production was 2.93 Mbpd in 1999 (annual average from BP). The high point on this chart is 2.68 Mbpd recorded in December 2002. The low point 730,000 bpd in September and October 2012. A period of frantic activity has seen the declines reversed but with the oil price crash, offshore activity has crashed too that bodes ill for future production prospects. The UK is tooling up to decommission much offshore infrastructure. The cycles in UK production are due to annual maintenance schedules with the lows centred on the late summer.  I’m unsure why these cycles are absent Norway.

OECD Fig 10 The “other” category is dominated by Denmark and Italy. The decline mirrors the UK and Norwegian North Sea production.