BP: World oil and gas reserves still growing at healthy pace

Maureen Lorenzetti
Washington Editor

WASHINGTON, DC, June 21 -- BP PLC tried recently to quell renewed concerns by some industry observers that world oil reserves are running out sooner than expected.

"2003 was a turbulent year in the world's energy markets, with supply disruptions, strong growth in both demand and production of oil and coal, and the highest prices in the oil and gas markets for 20 years," said BP Chief Economist Peter Davies.

However, he said, "The high prices were not driven by fundamental resource shortages: In 2003, the world's reserves of oil and natural gas continued their long term trend of growing faster than production."

Davies's comments were part of presentations June 15 in New York City and June 16 in Washington, DC, that highlighted BP's 2003 statistical review.

"Despite those who say we are about to run out of oil and gas, the figures in the review confirm there is no shortage of reserves. Production in some provinces may have peaked, but this is no reason for current high prices," he said.

Over 40 years supply
The new data estimate total world oil reserves at 1.15 trillion bbl, about 10% higher than previously reported for 2002. Additionally, global oil reserves have increased almost continuously over the past 30 years, BP officials said. World reserves now represent 41 years of production at current rates. By comparison, in 1980 reserves equivalent to only 29 years of production were known. The world has now produced some 80% of the oil reserves that were known in 1980; yet exploration success and application of technology has led to current reserves that are 70% higher, BP said. The company has published its statistical review of world energy for 53 years.

Looking at natural gas, BP reported global reserves of 176 trillion cu m, 13% higher than those previously reported for 2002. The company said that gas reserves have more than doubled since 1980 as a result of exploration, new technology, and the "unstranding" of gas reserves through liquefied natural gas and other technologies.

BP Group Chief Executive John Browne emphasized that oil and gas are not being depleted at an accelerated rate. "The data [illustrate] the continued growth in reserve volumes across the world," Browne wrote in the review's introduction. "At current levels of consumption, there are sufficient reserves to meet oil demand for some 40 years and to meet natural gas demand for well over 60 years."

He added that there appears to be considerable scope for proved reserves and production to keep rising in Russia and elsewhere. "Reserves, globally, have grown over time, and it is clear that the issue of energy security, which has been so prominent over the last year, is driven not by a physical shortage of supply but by the challenges of ensuring, in a world where demand and supply are not colocated, that there will be sufficient traded oil and gas to meet rising demand."

BP said that this year's review includes a new and improved data series for proved oil and natural gas reserves. However, the new series does not necessarily meet US Securities & Exchange Commission definitions and guidelines for determining proved reserves, nor does it necessarily represent BP's view of proved reserves by country.

Data for the latest review were compiled using a combination of primary official sources and third-party data to provide more complete and timely series than published previously, BP said. Historic data have also been revised, and oil reserves include more comprehensive data on condensate and natural gas liquids. For example, Canadian oil sands "under active development" have been included in proved oil reserves.

Price snapshots
BP wanted to address concerns about an imminent peak in global oil production raised recently by some petroleum industry researchers (OGJ series of special reports future energy supply, July 7-Aug. 18, 2003). It also sought to put recent higher energy prices in an historical context.

Oil prices in 2003 were the highest for 20 years, with North Sea Brent dated crude averaging $28.83/bbl, despite world oil production rising by 3.8%, higher than the 2.1% increase in demand. High prices were largely the result of strong oil consumption growth and the need to maintain inventory levels, BP officials said.

"Even at $40/bbl, the price of crude oil in real terms is still only half the level reached in 1980. An effective global market and continued advances in technology have enabled the world to absorb a 25% increase in daily oil demand in the intervening period," Browne said.

And despite those high prices, oil consumption grew strongly in 2003, increasing 1.5 million b/d to 78.1 million b/d, with strongest growth coming in the Asia Pacific region. This happened even with supply disruptions in Venezuela and Iraq.

Also of note is the fact that oil production from the Organization of Petroleum Exporting Countries grew 1.9 million b/d to reach 30.4 million b/d in 2003. Saudi Arabia alone increased production by over 1 million b/d to a 22-year high. Non-OPEC production grew 830,000 b/d, with the majority coming from Russia.

The company sees Russia and China as two countries that were particularly influential on global energy markets in 2003. BP already has significant interests in Russia; China holds large promise.

China showed a surge of 13.8% in total energy demand as GDP growth of 9% increased the county's energy intensity. Meanwhile, China's consumption of oil, gas, coal, and nuclear power all increased by more than 10% in 2003. China alone accounted for 41% of the growth in total world oil demand, some 600,000 b/d, and its oil imports rose 32% to 2.6 million b/d, the 2003 review found.

"China has now overtaken Japan as the world's second-largest consumer of oil behind the US. Chinese decisions on imports and trading links, for both oil and natural gas, will be a major influence on the world energy scene from now on," Browne said.

Russia continues to be a dominant source of growth in non-OPEC growth, BP said. Since 1998, total energy production has climbed by almost 18% with oil production in particular growing. Since 1998, Russia has been the largest supplier of non-OPEC oil, contributing to 46% of the world's oil consumption growth between 1998 and 2003. In 2003 Russian oil production grew by 845,000 b/d to 8.5 million b/d.

Natural gas picture
Global natural gas consumption grew by a relatively weak 2% as demand in the US, considered to be the world's largest market, contracted by 5%. Outside the US, demand growth averaged over 4%. Meanwhile, sales of LNG grew quickly in 2003, rising by over 12%. US LNG imports more than doubled, and sales to the world's largest LNG markets, Japan and South Korea, rose by over 9%, BP said.

Global gas production rose 3.4% in 2003. As in 2002, North America was the only region in which gas production fell, led by reductions in Canadian output. Russian gas production continued to expand, rising over 4%. Production in Europe fell with declines coming from the UK, Italy, and the Netherlands, but production in Norway rose strongly, up 12%.

Other fuels
BP also tracked supply and demand of coal, nuclear, and hydroelectric power. World coal consumption rose 6.9%, BP said. This was again dominated by surging demand in China, up over 15%, but other regions also saw strong demand with North American coal use climbing to a record high.

Nuclear power generation reduced by 2% globally, led by a 27% decline in the world's third-largest nuclear generator, Japan, where safety concerns shut in 17 of the country's 54 nuclear plants. Only two new nuclear reactors were brought on line in 2003, the lowest number for 35 years.

Hydroelectric power generation only increased by 0.4% as Latin American and Asia Pacific gains were offset by falls in Europe and North America.

Contact Maureen Lorenzetti at maureenl@ogjonline.com

Related Articles

WAFWA: Aerial survey finds lesser prairie chicken population grew

07/06/2015 A recent range-wide aerial survey found the lesser prairie chicken population rose 25% from 2014 to 2015, the Western Association of Fish & Wil...

Production ramps up from Sunrise oil sands project

07/06/2015 Husky Energy Inc., Calgary, reported that 25 well pairs are now on production at its Sunrise oil sands project in northeastern Alberta. Steaming is...

Buru awarded onshore Canning licenses

07/06/2015 Buru Energy Ltd., Perth, and Mitsubish Corp. have been granted two production licenses for Ungani oil field in the onshore Canning basin of Western...

Cenovus sells royalty business for $3.3 billion

07/06/2015 Cenovus Energy Inc., Calgary, inked an agreement to sell its wholly owned subsidiary Heritage Royalty LP to Ontario Teachers’ Pension Plan for gros...

CERI: Energy, operational efficiencies possible in Canadian oil, gas

07/06/2015 Measures can be taken by operators in the expanding resource-intensive Canadian oil and gas sector to improve both energy efficiency and operationa...

AGL Energy to scale back upstream gas operations

07/06/2015

Gas retailer AGL Energy Ltd., Sydney, says it will exit the oil business and massively scaling back its upstream gas operations.

Woodside lets contracts for Browse LNG project

07/06/2015 Woodside Petroleum Ltd. has let more contracts for the Browse floating LNG project offshore Western Australia. The contracts, awarded to a Technip-...

Macondo settlement seen ‘positive’ for BP

07/06/2015 BP Exploration & Production Inc.’s recent agreement to settle federal and state claims related to the 2010 Macondo blowout and spill improves t...

Emerging producers offered guidelines for governance

07/06/2015 Like most worthy endeavors, governing oil and gas activity at the national level is easier said than done-especially where oil and gas never before...
White Papers

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by
Available Webcasts


Operating a Sustainable Oil & Gas Supply Chain in North America

When Wed, Oct 7, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.

register:WEBCAST


The Resilient Oilfield in the Internet of Things World

When Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.

register:WEBCAST



On Demand

Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors

register:WEBCAST


Driving Growth and Efficiency with Deep Insights into Operational Data

Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected