The Hydrocarbon Law for Dummies

[Jcrowley]

Hydrocarbon Law for Dummies
Posted on March 24, 2007

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Invisible in the smoke screen of civil war in Iraq, the current US ambassador to Iraq Zalmay Khalilzad has been working feverishly on Iraq’s first post-invasion Hydrocarbon Law.

The fancy name not withstanding, the law is simply about Iraq’s 112 billion barrels of proven, close to the surface and easily extractable oil reserves, the second largest in the world after Saudi Arabia, along with roughly 220 billion barrels of other probable and possible resources. Add to this another fact of equal importance. Iraq’s true potential is said to be far greater than this as the country has remained relatively unexplored due to years of war and sanctions.

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Khalilzad’s untiring efforts were rewarded recently by the passing of the proposed law by the puppet Iraqi government. The lolly in the law is hidden in some of its provisions that are said to be a “radical departure from the norm for developing countries”. And that is that under the new law oil majors such as BP and Shell in Britain, and Exxon and Chevron in the US, would be able to sign deals of up to 30 years to extract Iraq’s oil, a kind of contract which other oil producing countries do not want to touch by a mile long pole.

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So the gist of the story so far is that Iraq’s Hydrocarbon Law, passed recently by a weak Iraqi government, gives long term concessions to Western oil giants, among them not just Khalilzad’s but many Neocons’ former employers. These oil giants, however, cannot operate on their own in Iraq and need protection from ‘overzealous’ national and regional forces that tend to unbalance the gravy train.

That brings us to Anwaar’s First Universal Law of Hydrocarbon. It states, “Hydrocarbon at rest tends to stay at rest and Hydrocarbon in motion tends to stay in motion with the same speed and in the same direction unless acted upon by unbalancing forces.”

http://truthspring.info/2007/03/24/hydrocarbon-law-for-dummies/

[nam78_two]

1. K&R.nt

[Jcrowley]

2. Interesting comments here

There is more to add here; the widespread use of advanced extraction techniques like water-injection and horizontal-brush drilling are the hallmarks of field maturity and imminent production collapse. It is important to note that Iraq’s oil fields are easily extractable because the other great world oil fields are at death’s door, including Saudi Arabia’s great mother, Ghawar. Ghawar is by far the largest conventional oil field ever discovered. Since first tapped in 1948, Ghawar has produced some 60 billion barrels of oil and accounted for 60-65% of Saudi production from 1948-2005. While actual field by field production numbers remain a Saudi State secret, Ghawar is estimated to produce more than five million barrels per day or 6.5% of the planet’s daily production total of 84 million barrels.

The writers at the Oil Drum, a data driven oil analysis website, after assessing the production data from several independent reporting agencies, claim that Saudi production is down a whopping 8% in 2006 from 2005 numbers. The decline would have been closer to 14% without the addition of the Haradh III mega-project. They assert that Saudi Arabia has now officially peaked and that the pace of production decline there is likely to accelerate. Remember, Ghawar accounts for 60% of Saudi production.
Here’s the latest on other fields around the globe:

“Kuwaiti oil production from the world’s second-largest field (Burgan) is ‘exhausted’ and falling after almost six decades of pumping” according to the chairman of the Kuwaiti state oil company. The L.A. times tells us that “Production at Cantarell, the world’s second-largest oil complex, which provides about 60% of Mexico’s crude, averaged 1.78 million barrels a day in 2006. That’s a 13% drop from 2005.” The famous North Sea basin and it gigantic Forties Field, the oil find that made Britain a petroleum exporter for the past 20 years, is about to experience a precipitous production decline. These fields and others like them have fueled the global capitalist system now enshrined and deified in American mass-culture. Our own Southern oil fields took only 40 years to outlive their usefulness from 1930 to 1970.