The Anatomy of Oil Decline

I spend a lot of words talking about oil decline without explaining what it is or how it works… well. If you’re looking for a slightly more technical take… here’s one on Cantarell.(Gerson Lehrman Group)

An average well in 1981 would produce 29,000 bbl/day. Development continued with production coming from many of the fields including Ixtoc, but as flow rates fell, gas lift equipment was installed. By 1995, the average well would produce 7,000 bbl/day. The gas lift program was expanded and by 1999, total production from the complex was 1.4 million bbl/day.


Had there been no pressure maintenance installation, by 2004, production per well would have been about 3,200 bbl/day.
Pemex decided to inject nitrogen gas into the dome of Cantarell. That began in May of 2000 at an initial rate of 300 million cubic feet/day and was expanded through the year with a total of four stages to 1,200 million cubic feet/day.
The original estimate of reserves was 17 billion barrels but this was raised to 19.3 after the nitrogen gas had pushed the original oil/water contact back to its original position. By 12/31/2006, cumulative production was 16.6 billion barrels. In 2004, the complex produced 2.136 million bbl/day which declined to 1.525 million by 2007. Production declines as the expanding gas cap intersects the well bores.

Today the end is near with expectations that Cantarell will become uneconomic as early as 2014 and no later than 2019.

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