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CERAW EEK Houston, February 2005

CERAW EEK Houston, February 2005. Future Oil Supply and Refining Capacity: a Crude Fit Between Upstream and Downstream?. Worldwide Resource Potential and the Relevance of Peak Oil. Peter J. McCabe U.S. Geological Survey. CERAW EEK Houston, February 2005. CERAW EEK

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CERAW EEK Houston, February 2005

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  1. CERAWEEK Houston, February 2005 Future Oil Supply and Refining Capacity: a Crude Fit Between Upstream and Downstream? Worldwide Resource Potential and the Relevance of Peak Oil Peter J. McCabe U.S. Geological Survey

  2. CERAWEEK Houston, February 2005

  3. CERAWEEK Houston, February 2005 Hubbert analysis – predicting a cycle of production Known amount of resource = Ultimate cumulative production Production rate Time

  4. Campbell’s predicted 2004 production: ~36 million barrels/day CERAWEEK Houston, February 2005 Campbell’s 1989 Forecast of World Crude Oil Production 80 70 60 50 40 Production - million barrels/day 30 20 10 0 1940 1960 1980 2000 2020 From Campbell, 1989, NOROIL

  5. * Actual 2004 production: 82.8 million barrels/day Campbell’s predicted 2004 production: ~36 million barrels/day CERAWEEK Houston, February 2005 80 70 60 50 40 Production - million barrels/day 30 20 10 0 1940 1960 1980 2000 2020

  6. CERAWEEK Houston, February 2005 Resource cycle of production Peak determined by the interaction of supply and demand. No reason why the curve should be symmetrical. Production rate Time

  7. CERAWEEK Houston, February 2005 World Conventional Oil (Including U.S.) 2059 Remaining recoverable oil* 69% Cumulative Production to end of 2003 922 31% * From USGS 2000, USGS 1995, and MMS 1996 Billions of Barrels

  8. Remaining Global Oil Resources CERAWEEK Houston, February 2005 Billions of Barrels Future resources – unconventional, conventional small fields, conventional in frontier areas, field growth beyond 2025 ? Canadian oil sands reserves‡ 180 Oil in U.S. – undiscovered & field growth# 165 Reserve growth in conventional fields (outside U.S.)* 612 Undiscovered conventional oil (outside U.S)* 649 Reserves of conventional oil (outside U.S.)* 859 * USGS 2000, # USGS 1995 and MMS 1996, ‡Oil & Gas Journal 2002

  9. Conventional Oil USGS World Energy Assessment 2000* CERAWEEK Houston, February 2005 Reserve Growth in Conventional Fields 612 Undiscovered Conventional Oil 649 Remaining Reserves of Conventional Oil 859 Cumulative Production to Date 539 (* exclusive of U.S.) Billions of Barrels

  10. Conventional Oil USGS World Energy Assessment 2000* CERAWEEK Houston, February 2005 Reserve Growth in Conventional Fields 612 Undiscovered Conventional Oil 649 Remaining Reserves of Conventional Oil 859 Cumulative Production to Date 539 (* exclusive of U.S.) Billions of Barrels

  11. Conventional Oil USGS World Energy Assessment 2000* CERAWEEK Houston, February 2005 Reserve Growth in Conventional Fields 612 Undiscovered Conventional Oil 649 Remaining Reserves of Conventional Oil 859 Cumulative Production to Date 539 (* exclusive of U.S.) Billions of Barrels

  12. CERAWEEK Houston, February 2005 Reserve Growth The amount of oil in most fields is underestimated • Stratigraphic extension of a field • Geographic extension of a field • Better recovery factors over time • Initial estimates of reserves are often conservative for political, financial, or other reasons.

  13. Magnitude of Reserve GrowthNorth Sea Oil Fields – 1985 to 2000 (15 yrs) CERAWEEK Houston, February 2005 Additions to reserves 1985 to 2000: Reserve growth – 12 billion barrels New field discoveries - 2 billion barrels From Klett and Gautier, in press

  14. Magnitude of Reserve GrowthNorth Sea Oil Fields – 1985 to 2000 (15 yrs) CERAWEEK Houston, February 2005 Additions to reserves 1985 to 2000: Reserve growth – 12 billion barrels New field discoveries - 2 billion barrels From Klett and Gautier, in press

  15. Magnitude of Reserve GrowthNorth Sea Oil Fields – 1985 to 2000 (15 yrs) Reserve Growth CERAWEEK Houston, February 2005 Additions to reserves 1985 to 2000: Reserve growth – 12 billion barrels New field discoveries - 2 billion barrels From Klett and Gautier, in press

  16. Total volume in 1996 = 777,015 MMBO Total volume in 1981 = 616,630 MMBO Net change = 160,385 MMBO Reserve Growth in Giant Oil Fields: 1981-1996 (Fields > 500 MMBO, excl. U.S. and Canada) 32.9 5 4 3 2 1 0 Difference in total recoverable oil (BBO) -1 -2 -3 -4 -5 -18.4 Decreasing field size Data source: IHS From Klett and Schmoker, 2003

  17. CERAWEEK Houston, February 2005 World Conventional Oil (Including U.S.) 2059 Remaining recoverable oil* 69% Cumulative Production to end of 2003 922 31% * From USGS 2000, USGS 1995, and MMS 1996 Billions of Barrels

  18. CERA Classification of Oil Types Heavy Medium Light Remaining Conventional Oil Categorized by API Gravity Billion barrels API gravity From data in USGS 2000

  19. World Oil* – Reserves, Undiscovered Fields, and Reserve Growth Reserve growth Reserves in existing fields and resources in undiscovered fields Billion barrels Extra Heavy2 Heavy1 Medium1 Light1 NGL1 • 1 From USGS World Petroleum Assessment 2000 • 2 Estimate for Alberta oil sands and Venezuela heavy oil * Exclusive of U.S.

  20. Alberta Oil Sands Faja Petrolifera del Orinoco Kern River & Midway Sunset API Gravity versus Sulfur Content of World Oils Percentage Sulfur Content API gravity Unlabelled datapoints from USGS World Petroleum Assessment 2000

  21. Biodegradation Increasing Thermal Maturity API Gravity versus Sulfur Content of World Oils Percentage Sulfur Content API gravity

  22. World’s Conventional Oil Endowment < 1 Billion Barrels (BBO) 40 - 80 BBO 1 - 20 BBO 80 - 160 BBO 20 - 40 BBO > 160 BBO Based on USGS 2000 (World) and 1995 (U.S.) assessments

  23. CERAWEEK Houston, February 2005 Gravity of Conventional Oils Exclusive of U.S. Very Light (41-50o) Light (34-40o) Medium (27–33o) Heavy (15-27o) Divisions based on median API gravity. From USGS World Petroleum Assessment 2000

  24. CERAWEEK Houston, February 2005 Sulfur in Conventional Oils Exclusive of U.S. Low (<0.5%) Medium (0.6-1%) High (>1%) Based on median sulfur content. From USGS World Petroleum Assessment 2000

  25. CERAWEEK Houston, February 2005 “Saudi Arabia bitter over global taste for sweet and not sour oil” THE TIMES October 11, 2004

  26. CERAWEEK Houston, February 2005 Sulfur in Conventional Oils Exclusive of U.S. Low (<0.5%) Medium (0.6-1%) High (>1%) Based on median sulfur content. From USGS World Petroleum Assessment 2000

  27. CERAWEEK Houston, February 2005 Distribution of Natural Gas Liquids (NGL) Exclusive of U.S. >10,000 MMB 5,000 – 9,999 MMB 1,000 – 4,999 MMB <1,000 MMB From USGS World Petroleum Assessment 2000

  28. CERAWEEK Houston, February 2005 CONCLUSIONS • There is a finite amount of oil in the world but considerably more than the pessimists would have us believe. • The majority of remaining conventional oil is light. • Reserve growth in existing fields will provide a substantial percentage of future oil supplies. • Extra heavy oils and NGLs will play an increasing role in meeting the demand for petroleum. • Much Arabian Gulf and Russian oil is relatively high in sulfur – but there is a lot of it!

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