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BP study

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BP study

  1. 1. Oil Peak – A Geologist’s View Francis Harper, BP plc Energy Institute, November 2004
  2. 2. How long will current reserves last? A 40 year supply? 1000 bn bbl 25 bn bbl p.a. Reserve Adds: <ul><li>Exploration </li></ul><ul><li>Reserves Growth </li></ul><ul><li>Nonconventionals </li></ul>
  3. 3. Exploration Exploration Potential – Discovery Trend Data based on those of IHS Energy <ul><li>Decreasing trend in volumes found from the early 60’s (peak) to the early ’90’s. </li></ul><ul><li>Slight increasing trend over the last decade. </li></ul><ul><li>Production exceeds discoveries for last ca. 20 years </li></ul><ul><li>Are these numbers consistent? </li></ul>
  4. 4. Failure Uneconomic Success Economic Success Exploration Deepwater Basins – Success and Failure Lwr. Congo Niger Delta Campos GoM Ca. 1500 Exploration wells Ca. 120 basins tested Ca. 30 with discoveries Ca. 20 w. economic disc. Deepwater = >500m Data based on those of IHS Energy
  5. 5. Exploration Oil and Gas Fields >= 10 bn bbl oil equiv. <ul><li>Ca. 50 Fields with >10 bnboe ultimate Potential </li></ul><ul><li>Kashagan is the only new supergiant oil field found in the last 25 years </li></ul>Volumes overviewed for field growth potential Data based on those of IHS Energy
  6. 6. Exploration Oil and Gas Basins >= 10 bn bbl oil equiv. Volumes overviewed for growth and YTF Data based on those of IHS Energy <ul><li>Ca. 50 Basins with >10 bnboe ultimate Potential of which ca.5 discovered pre-1900 </li></ul><ul><li>No major new oil province found since the North Sea other than as deepwater extensions of known basins </li></ul>
  7. 7. Exploration Field Sizes and Success Rates Average discovery sizes have tracked total discovery volumes declining to about 50 mmbbl by 1980. Data from IHS Energy Success rates from new-field wildcats has increased from ca 1 in 6 to ca 1 in 3 over the last 50 years
  8. 8. Exploration Exploration Potential Summary <ul><li>Discovered volumes have been declining since the end of the ’60s </li></ul><ul><li>The deepwater theme of the ’90s has helped to reverse this trend but this will not last indefinitely </li></ul><ul><li>The number of supergiant oil fields and the number of giant oil provinces have fallen off markedly in recent years </li></ul><ul><li>Maximum and average field sizes are declining </li></ul><ul><li>BUT </li></ul><ul><li>Drilling success rates are rising, driven by advances in the technology of imaging </li></ul>
  9. 9. Reserves growth Discovery estimates grow with time <ul><li>Ca. 200 billion bbl added to discovery estimates (’50-’96) between ’97 and ‘03 </li></ul><ul><li>Growth applies primarily to the bigger, older fields </li></ul>Data from IHS Energy annual reports
  10. 10. Reserves Growth Growth in IHS Reserves – World Data from IHS Energy annual reports
  11. 11. Reserves Growth Sources of Field Reserves Growth Fields grow either by increases in Hydrocarbons-In-Place (extensions, additions) or by increases in Recovery actor (revisions, improved recovery) Extension (Stratigraphic) Extension (Structural) Addition (Shallower Pool) Addition (Deeper Pool) Addition (Satellite) Revisions/ Improved Recovery
  12. 12. Reserves Growth Growth by Improved Recovery Data from IHS Energy database <ul><li>The average global oil recovery factor is about 30-35% </li></ul><ul><li>Original Discovered Reserves are about 1950-2200 billion bbl </li></ul><ul><li>Original Discovered In-place volumes are about 5500-7000 billion bbl </li></ul><ul><li>Every 1% increase in average global recovery factor adds about 55-70 billion bbl reserves, almost equivalent to a UK North Sea </li></ul>Plots below based on ca. 9000 fields worldwide with recovery factors - containing ca. 1400 bbo with average RF of 30%
  13. 13. Reserves Growth Reserves Changes in UK Oil Fields All fields with >100 mmbbl and >7 years data Data from DTI Brown Book reports Average Individual field reserves changes may be positive or negative and can easily half or double the size of a field. On average, however, fields tend to grow.
  14. 14. <ul><li>Reserves estimates are uncertain and will change with time – these can go up or down but on average will be positive. </li></ul><ul><li>Reserves growth is primarily a function of big, old fields. </li></ul><ul><li>Growth occurs both by increasing hydrocarbons in-place and by increasing recovery factor. </li></ul><ul><li>Most of discovered oil remains in the ground – this is potentially an enormous prize with a 1% increase in global recovery adding about 55-70 bn bbls. </li></ul><ul><li>BUT </li></ul><ul><li>Increasing recovery is difficult and expensive and most of reserves growth adds may not affect global peak production </li></ul>Reserves Growth Reserves Growth Potential Summary
  15. 15. Nonconventional Oil Resource Type and Distribution Data from IEA 2004 (WEO) 7 trillion bbl Oil-in-Place Canada 36% Venezuela 19% Others 9% MidEast 1% Africa 3% USA 32%
  16. 16. Nonconventional Oil Production Potential <ul><li>IEA projects nonconventional production growing at ca. 8% p.a. to about 10 mmbpd by 2030 </li></ul><ul><li>in 2030, 23% of this is expected to be GTLs (+CTL, Biofuel?) </li></ul>
  17. 17. <ul><li>Nonconventional Oil sources include </li></ul><ul><ul><li>Heavy oil </li></ul></ul><ul><ul><li>Bitumen </li></ul></ul><ul><ul><li>Oil shale </li></ul></ul><ul><ul><li>Fractured source rock </li></ul></ul><ul><ul><li>Gas-to-liquids </li></ul></ul><ul><ul><li>Biofuels </li></ul></ul><ul><li>Heavy oil and bitumen are the most important in resource terms and are dominated by Venezuela and Canada respectively </li></ul><ul><li>The resource base is very large and it will become an important part of future supply </li></ul><ul><li>BUT </li></ul><ul><li>There are large monetary and environmental costs involved and the rate of growth relative to the demand is limited </li></ul>Nonconventional Oil Summary of Nonconventional Potential
  18. 18. N.America 3 6 0 bnbl S.America 200 bnbl FSU 33 0 bnbl MidEast 810 bnbl AsiaPacific 1 3 0 bnbl Africa 1 9 0 bnbl Europe 80 bnbl World 21 0 0 bnbl 2 Distribution, Maturity of Conventional Oil <ul><li>Most regions of the world are either at or past the mid-point of depletion </li></ul><ul><li>MidEast (and FSU and Africa) have produced <50% of their known resource </li></ul>
  19. 19. <ul><li>Existing discovered reserves are unlikely to sustain demand for more than about 15 years </li></ul><ul><li>Exploration cannot be expected to replace production and its contribution may continue to decline </li></ul><ul><li>Reserves Growth is likely to continue as the dominant form of reserve adds but much of it will only slow post-peak production decline </li></ul><ul><li>Nonconventional oil will become increasingly important – there is a very large resource but converting it into reserves has significant financial and environmental costs </li></ul><ul><li>Non-OPEC is likely to reach a resource-constrained production peak from conventional oil in the next 10 years – thereafter production capacity will be concentrated in progressively fewer countries </li></ul>Summary

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