Peak Oil 2009

"In the last few months, virtually every speech on this subject started with criticism of the United States. But I will do nothing of the kind.

I just want to remind you that, just a year ago, American delegates speaking from this rostrum emphasised the US economy's fundamental stability and its cloudless prospects. Today, investment banks, the pride of Wall Street, have virtually ceased to exist. In just 12 months, they have posted losses exceeding the profits they made in the last 25 years. This example alone reflects the real situation better than any criticism.

In the 20th century, the Soviet Union made the state's role absolute. In the long run, this made the Soviet economy totally uncompetitive. This lesson cost us dearly. I am sure nobody wants to see it repeated.

Nor should we turn a blind eye to the fact that the spirit of free enterprise, including the principle of personal responsibility of businesspeople, investors and shareholders for their decisions, is being eroded in the last few months. There is no reason to believe that we can achieve better results by shifting responsibility onto the state.

And one more point: anti-crisis measures should not escalate into financial populism and a refusal to implement responsible macroeconomic policies. The unjustified swelling of the budgetary deficit and the accumulation of public debts are just as destructive as adventurous stock-jobbing.

......unfortunately, we have so far failed to comprehend the true scale of the ongoing crisis...we must assess the real situation and write off all hopeless debts and "bad" assets.

True, this will be an extremely painful and unpleasant process. Far from everyone can accept such measures, fearing for their capitalisation, bonuses or reputation. However, we would "conserve" and prolong the crisis, unless we clean up our balance sheets. I believe financial authorities must work out the required mechanism for writing off debts that corresponds to today's needs.

Second. Apart from cleaning up our balance sheets, it is high time we got rid of virtual money, exaggerated reports and dubious ratings. We must not harbour any illusions while assessing the state of the global economy and the real corporate standing, even if such assessments are made by major auditors and analysts.

In effect, our proposal implies that the audit, accounting and ratings system reform must be based on a reversion to the fundamental asset value concept. In other words, assessments of each individual business must be based on its ability to generate added value, rather than on subjective concepts. In our opinion, the economy of the future must become an economy of real values.

I propose we start laying down a new international legal framework for energy security. Implementation of our initiative could play a political role comparable to the treaty establishing the European Coal and Steel Community. That is to say, consumers and producers would finally be bound into a real single energy partnership based on clear-cut legal foundations.

Every one of us realises that sharp and unpredictable fluctuations of energy prices are a colossal destabilising factor in the global economy. Today's landslide fall of prices will lead to a growth in the consumption of resources.

On the one hand, investments in energy saving and alternative sources of energy will be curtailed. On the other, less money will be invested in oil production, which will result in its inevitable downturn. Which, in the final analysis, will escalate into another fit of uncontrolled price growth and a new crisis.

It is necessary to return to a balanced price based on an equilibrium between supply and demand, to strip pricing of a speculative element generated by many derivative financial instruments."
- Russian Prime Minister Vladimir Putin speaking at the World Economic Forum in Davos, Switzerland. Emphases added.

Jan - Mexico - Output from the massive Cantarell field has now dropped to 772,000 barrels a day, down 39,000 barrels a day in just one month. Its decline rate over the last year is now a massive 38%.

Jan - Mexico - Pemex hopes to maintain oil production at 2.75 million bpd over 2009 by increasing production from Ku Maloob Zaap and the onshore Chicontepec project. Cantarell production is expected to have fallen to 700,000 bpd by the end of 2009.

The fall in oil output dragged down oil exports to 1.366 million bpd in January, compared with 1.434 million bpd a year earlier.

Gasoline imports averaged 329,700 bpd in January, up from 303,870 bpd in January 2008. (Reporting by Robert Campbell; editing by Jim Marshall)

Feb 4 - Saudi Arabia raises the price for all of crude oil grades available for export purchase in March. Price of Heavy crude to the USA increased most, adding $US4.70 to the price per barrel. Saudi Arab light is now $US1 a barrel more expensive than West Texas Intermediate. It is suggested that Saudi Arabia is reducing their exported oil quantity by raising prices slightly over competing crudes, including Gulf crudes.

March 2 - Russia - The St. Petersburg Commodity Exchange which opened september 2008 is due to expand trade this month. The Russian energy minister proposes that Iran "consider the possibility of selling a part of Iran's oil at the St. Petersburg Commodity Exchange". The St. Petersburg Commodity Exchange

March - UK - UK gas storage levels are low and declining. Storage for the time of year continues to decline at a rate of about 100 mcm/day faster than 2008. The low level of storage in the UK was raised in parliament. Opposition MP Greg Clark said:

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