While a vigorous debate proceeds among specialists about how much petroleum the world has left to produce, the number of greatest immediate importance is production capacity.
Among leading producers, that numbercontradicting pessimism aroused by the important "how much" debateis increasing.
In its November Oil Market Report, the International Energy Agency increased its estimate of sustainable production capacity among members of the Organization of Petroleum Exporting Countries by 100,000 b/d to a total of 31.8 million b/d.
IEA expects further increases: to 32.1 million b/d by the end of this year and to 33 million b/d by the end of 2006.
The November increase accounts for expected gains by yearend of 50,000-100,000 b/d each from northern Kuwait, deepwater Bonga field off Nigeria, and onshore expansions in Abu Dhabi. They're offset by a 100,000 b/d reduction to 4 million b/d in the estimate for Iran, where there have been problems in the offshore Soroush-Nowruz heavy oil fields.
IEA expects that, net of assumed field declines, OPEC production capacity will increase by 2 million b/d during all of 2005-06.
Key gross additions during the period will be Algeria 255,000 b/d, Indonesia 85,000 b/d, Iran 370,000 b/d, Kuwait 300,000 b/d, Libya 150,000 b/d, Nigeria 485,000 b/d, Qatar 100,000 b/d, Saudi Arabia 450,000 b/d, the United Arab Emirates 200,000 b/d, and Venezuela 175,000 b/d. IEA also expects gains in OPEC members' capacities to produce NGLs and condensate totaling 600,000 b/d during the period.
Much of the new production capacity will yield fairly light, low-sulfur crude, which refiners favor. Capacity coming on stream recently has tended to be heavy, sour crude for which the market has low enthusiasm.
IEA notes that OPEC plans to have 38 million b/d of production capacity in place by the end of the decade. It also notes barriers including uncertain investment levels, limits on availability of drilling equipment and infrastructure, potential shortages of technical personnel, the need to slow production declines in old fields, and cost and time constraints.
Significantly absent from the list is anything having to do with how much oil is in place in the OPEC countries.
(Online Nov. 25, 2005; author's e-mail: email@example.com)