New estimates boost worldwide oil, gas reserves
Larger estimates for Venezuela have increased worldwide oil and gas reserves from previous estimates, according to Oil & Gas Journal’s annual survey of proved reserves.
Worldwide oil production declined slightly in 2007. But preliminary estimates indicate that worldwide crude and condensate production increased 1.1% this year, spurred by robust demand in late 2007 and early 2008, and record high oil prices that peaked in July.
New estimates of the world’s oil reserves total 1.34 trillion bbl, up 10.5 billion bbl from those reported a year ago (OGJ, Dec. 24, 2007, p. 22). The latest estimates of gas reserves total 6.254 quadrillion cu ft, up 68.67 tcf from those reported a year ago.
The increases in total oil and gas reserves come in large part as a result of higher estimates for Libya and Venezuela, as reported by the Organization of Petroleum Exporting Countries. OPEC also reported larger gas reserves and smaller oil reserves for Iran.
OGJ does not make its own estimates of a country’s reserves but rather compiles the estimates of proved reserves from an annual survey of official sources, including government agencies and ministries. Since most countries do not assess their reserves annually, many of the figures in this report are unchanged from a year ago.
Reserves changes
Other than those mentioned above, there were no other large changes in reserve volumes on the country level. Most of the adjustments recorded from a year ago were related to production, but some reevaluations pertained to economics as the price of oil climbed.
The region with the largest changes in reserves is the Western Hemisphere, as was the case in the previous edition of this report. Led by Venezuela, collective oil reserves in North America and Latin America are up 3.6% and gas reserves are 5.6% higher than reported a year ago.
Most of the additions to Venezuela’s reserves are the result of additions of extra-heavy oil. The country’s reserves at the end of 2007 stood at 99.377 billion bbl, including 58.173 billion bbl of extra-heavy crude, according to PDVSA. This total is up 12.3 billion bbl from that reported a year ago.
Libya’s new oil reserve estimates are up 2.2 billion bbl to 43.66 billion bbl. Indonesia, which has been facing declining output for some time and is leaving OPEC in January 2009, holds 3.99 billion bbl in oil reserves, down 9% from previous estimates, although its gas reserves are revised 13% higher at 106 tcf.
Argentina, Brazil, Ecuador, and the US show larger oil reserves, while oil and gas reserves in Canada, Mexico, and Colombia are lower.
Canada’s oil reserves include 5.392 billion bbl of conventional crude oil and condensate, according to the Canadian Association of Petroleum Producers, and 172.7 billion bbl of oil sands reserves. The total is down 500 million bbl from previous estimates.
OGJ subscribers can download, free of charge, OGJ Worldwide Report 2008 tables from the OGJ Online home page at www.ogjonline.com. Click “OGJ Online Research Center,” then “OGJ Subscriber Surveys,” then “Worldwide Production” or “Worldwide Refining.”
Reported oil reserves declined 4.6% in Western Europe, and gas reserves for this group of countries declined almost 2%. Denmark, France, Germany, and UK each reported lower oil and gas reserves.
US reserves
With proved reserves additions of 46.1 tcf and production of 19.5 tcf, the latest estimate of US natural gas reserves by the US Energy Information Administration is 237.7 tcf, up 13% from the previous estimate.
EIA said that in 2007, discoveries accounted for 63% of reserves additions. Exploratory gas well completions in 2007 rose 21% from a year earlier, and these exploration efforts led to 29 tcf of total discoveries in 2007.
US oil reserves are up much more modestly than gas reserves. Oil production in 2007 totaled 1.7 billion bbl, EIA said, but proved reserves additions were 2 billion bbl. This puts proved US oil reserves at 21.3 billion bbl, a 2% climb from a year earlier.
At 66 million bbl, new field discoveries of crude oil reserves doubled in 2007 over 2006, and 45 million bbl of these discoveries were in Alaska.
Up 7% from a year earlier, Alaska recorded the largest increase in proved oil reserves to 284 million bbl, followed by Texas with a 5% increase in year-end proved reserves to 251 million bbl.
EIA reported that reserves of natural gas liquids climbed 8% in 2007 to 9.14 billion bbl, as operators replaced 181% of production with reserves additions.
Oil production
OGJ estimates that 2008 worldwide crude and condensate production will average 73 million b/d. This will be a gain from last year’s output.
Worldwide oil production in 2007 averaged 72.16 million b/d, according to OGJ data. That was down 0.7% from a year earlier.
While worldwide production grew this year, Russia recorded its first oil output decline in a decade due to shrinking foreign investment and high crude export taxes. OGJ estimates that 2008 crude and condensate production in Russia will average 9.76 million b/d, down from the 2007 average of 9.83 million b/d.
OPEC oil output grew slightly in 2007 with the inclusion of Angola and Ecuador into the organization. OPEC’s output will climb another 4% this year, as worldwide demand growth in the first half of 2008—especially in Asia, Latin America, and the Middle East—spurred the need for more of the organization’s oil.
Total Middle East production has increased more than 5% this year over 2007 output, led by strong gains in Iraq, Saudi Arabia, and Kuwait.
Meanwhile, combined 2008 average production in Western Europe has declined 7% from last year. Down 8% each from 2007, production in the UK will average 1.4 million b/d this year, and Denmark’s output will average 286,000 b/d. Oil production in Norway this year will decline more than 6% to average 2.125 million b/d.
Oil production in 2008 also will average lower than a year ago in Canada, Mexico, and the US. Early estimates show that production in Canada in 2008 will average 2.57 million b/d, a 1.8% drop from last year. Production of conventional oil in Canada has been trending downward for years.
Mexico’s production incurred its 9% year-on-year decline due in part to a continued slide in output from Cantarell field. And US oil production, which has been declining since 1991, will end 2008 with a 3% slump in output from last year.
At the rate of 2007 worldwide production, the world’s proved reserves of conventional and nonconventional oil at current estimates would last about 51 years. At the estimated 2008 production rate, these reserves would last about 50 years.
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