-->67% of Oil Unrecoverable

The following article was kindly contributed by
( From BFI Consulting - Switzerland )

C. Paul Davis, Senior Vice President of Titan Oil Recovery Inc. (www.titanoilrecovery.com). I was fortunate to meet Mr. Davis in Los Angeles earlier this year. I was intrigued by the business proposition of Titan Oil Recovery and the quality of its management and board. Since oil - not just commodities… - is"HOT" these days, I have invited Mr. Davis and the Titan Chairman, Mr. Ken Gerbino, to speak at the upcoming Inner Circle Wealth Strategies Cruise and look forward to learning more of what they have to share.

"Overview on the oil industry and the pending world oil shortage"
by C. Paul Davis, July 2005

I believe there are more articles being written today about the shortage of oil and the high cost of gasoline today than at any time in the past. At the same time very few people outside the oil industry really know and/or understand what is going on, why oil and gasoline prices are soaring out of sight, and what the future holds for all of us who depend on oil and gasoline to maintain our comfortable way of life.

Depending what experts you talk to there are three schools of thought on the status of world oil:

1. The production of oil has peaked (this is officially called"Oil Peak") where demand is greater than supply. The majority of the oil experts believe this has already happened, or will happen soon. There is a finite amount of oil and someday we will run out of oil. The big question is when?

2. Oil production has not peaked and there will always be enough oil to meet the needs of the world because the world's oil fields have always been able to meet demand. Unfortunately, this faulty thinking creates unrealistic expectations -"The Persian Gulf countries where most of the world's oil comes from can always increase production, if it has to be by finding new oil reserves." Not exactly true.

3. We really don't know.


My research has revealed the following:

Approximately 80 million barrels of oil are used each day in the world, or 29.2 billion barrels per year. This represents approximately $1.8 trillion dollars. The oil industry is the world's largest industry.

Approximately 67% of all the oil in oil fields cannot be recovered using today's equipment, techniques, and technology. This amounts to about 6.2 trillion barrels of oil for OPEC (Organization of Oil Exporting Countries) and Non-OPEC countries combined.

Seventy percent (70%) of all oil produced globally today is used to produce fuel for transportation purposes - automobiles, planes, buses, trucks, boats, and others. There is no known or accepted practical alternative energy technology available today that can replace gasoline.

If only ten percent (10%) of the 6.2 trillions of unrecoverable barrels of oil could be recovered this would provide approximately an additional 20 years of oil (at today's use rate) without having to use any oil from existing producing oil wells, or having to discover any new oil wells. This is definitively something worth pursuing.

The price of gasoline in the United States has risen to around $3.00 per gallon for premium grade. The price for a barrel of oil has risen to around $60 per barrel. This is an increase of about 50% over the past year. The demand for oil from China and India has increased significantly over the past few years. Some oil experts are predicting oil at $100 per barrel and gasoline at $10 per gallon in the United States. Will this happen? Who really knows, but it seems realistic to believe that oil and gasoline prices will remain at today's prices at a minimum and probably even go higher.

Saudi Arabia produces about 26% of the world's oil - 90% comes from five (5) giant oil wells and 85% of the remaining 10% come from (3) other wells. Aramco, Saudi Arabia's largest oil company, recently spent $18 billion searching for new oil wells and came up dry. Saudi Arabia has been the most reliable source for oil over the past 70 years. By comparison, the United States has over 800,000 oil wells of which tens of thousands are closed each year.

Oil in the ground, contrary to some beliefs, is not found in pools, streams, rivers, or ponds. Trillions of tiny oil droplets are stored in highly compacted sandstone or earth strata and are forced to the surface when wells are drilled, releasing the tremendous pressure that has built up over hundreds of millions of years.

Initially about 20% of the oil is captured this way. Another 13% is captured using secondary recovery methods that include injecting water, steam, CO2, and other additives in the oil well. This still leaves about 67% of the original oil in the ground.

The United States, with only 5% of the world population, consumes 26% of the worlds' oil production. The United States produce approximately 8.1 million barrels of oil per day, or 2.9 billion barrels per year.

All mature oil fields experience a 5% to 15% yearly production decline and this is a serious problem facing the world. Dealing with Mother Nature can be dangerous - oil production from an oil well can change from 50,000 to 1,000 barrels of oil per day in a very short period of time.

Globally over the next five years an offshore oil platform will close every other day and 127 major oil fields will close down.

Conclusions:

There is a finite amount of oil in the world. As each day passes we have less oil. The time to start finding and inventing new alternative sources of energy is now, not when the world runs out of oil.

None of us would like to live in a world that doesn't have oil, or a substitute for oil. Think about a world without oil for a minute. Experts say it will take over 50 years to convert from the type of gasoline vehicles we have today to something totally different. What that will be only time will tell.

I believe that most major oil companies and the major oil producing countries know what is happening regarding Peak Oil, but they aren't talking. It is clear that major oil companies are buying smaller oil companies to get more oil.

We must do everything we can to delay the day when the world runs out of oil. We must find new oil fields, as well as find a way to recover a portion of the 67% of the 6.2 trillion barrels of oil that is trapped or"stuck" in the ground. Our Company, Titan Oil Recovery is proud to contribute toward that objective with our innovative technologies and expertise.