Remember this inconvenient chart of Australia’s oil production? Well, it looks like Shell believes it’s real too…. they are going to close their Clyde refinery in Sydney. Is this the start of a rout..? Time will tell, but I’m sure keeping an eye on this one.
Updated: 20:38, Wednesday July 27, 2011
Shell has confirmed it will stop refining at its Clyde Refinery and will import petroleum products into Sydney because it can’t compete with Asia’s mega refineries.
Shell announced on Wednesday it will convert the Clyde Refinery and Gore Bay Terminal in Sydney into a fuel import facility by mid-2013.
Now of course, the question is why can’t shell compete with Asia’s mega refineries? Could it be lack of oil? Or that perhaps as we start scraping the bottom of the barrel the cost of bringing the dregs to the surface is too costly? it will be interesting to see just what the other oil majors do next..
I have found more proof we are in deep shit at http://crudeoilpeak.info/wa-crude-oil-depleted-by-75-pct
According to statistics published by the WA government in April 2011, WA’s crude oil resources including contingencies are depleted by around 75% at end 2010 up from 63% at end 2006. The annual depletion rate is therefore around 3% pa. Crude oil production in 2010 has increased from new fields (Van Gogh, Pyrenees) but the reserve/production ratios in some of these new fields are only 4-5 years. Fields which started in 2004-2008 (Mutineer, Enfield, Styborrow, Vincent) have already peaked and are in decline.
Conclusion: Barring new substantial discoveries, WA’s crude oil has entered its last quarter. As extraction rates in new fields are very high (offshore environment) depletion levels will increase by between 3-4% pa on current trends to reach around 85% – 90% by 2015. This will dramatically worsen Australia’s net oil import balance. Given that global crude oil exports have already peaked in 2005 there is a major oil import crisis ahead. Neither banks – who are still financing new tollway projects like the M2 widening in Sydney – nor the general public have been properly informed about these facts.