World oil: reserves, production, politics and prices

The assessment of the world's oil endowment is a sensitive subject with political implications and many vested interests. Some published reserve numbers are spurious, and lax definition has led to misconceptions. Study of the world's oil endowment involves the following elements: Cumulative Production (718 Gb; Gb = billion (109) barrels; numbers based on Oil and Gas Journal reserve data, updated for end 1993); Reserves (Reported less “political” — 722 Gb); Total Discovered (1440 Gb); Undiscovered (210 Gb); Remaining (932 Gb); Ultimate (1650 Gb). The rounded numbers in parentheses refer to conventional oil recoverable with today's technology and economics, excluding NGL, heavy oil, small fields etc., as of end 1993. Discovery (<8 Gb/y) and Depletion Rates (2.3%)are critical. Methods for assessing the Ultimate value include: intuitive; delphic; published trend; discovery pattern; and distribution pattern. An “ideal” resource constrained depletion model shows production rising in each country to the midpoint of depletion (half Ultimate) and falling at the then depletion rate, with a few Middle East countries acting as swing producers under alternative scenarios of world demand. It provides a valuable yardstick by which to understand the trends of actual production. It shows that the swing producers now providing almost 27% of the world's supply will pass 30% in 1995–1998, which is likely to herald another oil shock and the onset of a chronic new condition of declining supply as the world passes its midpoint in 1998. Some explanations for the current low prices in the face of these imminent storm clouds are suggested. Norway, through this conference, is invited to take the lead in promoting better disclosure of the world's discovered oil, as an essential first step to credible prediction of what remains. The situation is serious, and the political and economic implications are colossal.

Published in: Norwegian Petroleum Society Special Publications, Volume 6, 1996, Pages 1-20
Available from: ScienceDirect