Warren R. True
Chief Technology Editor
Oil & Gas Journal
BUENOS AIRES, Oct. 23 -- Anticipated growth in oil demand will buoy the oil industry for the foreseeable future, and playing a major role in supplying oil for that future will be deep offshore basins.
Those were major conclusions offered in two presentations to the World Energy Council's World Energy Congress on its first full day of activities in Buenos Aires.
Speaking for the Organization of Arab Petroleum Exporting Countries, J. Jamali said the greatest challenge in studying scenarios of anticipated growth in oil consumption is evaluating the adequacy of the resource base to sustain demand.
Alain DeLaytermoz of TotalFinaElf SA and Jacqueline LeCourtier of the Institut Français du Pètrole said that deep offshore oil appears to be the only major potential resource among conventional crudes, outside the Middle East and the Caspian zone.
Exaggerated forecasts
Jamali said that assessments in the 1970s of the progress toward scarcity of conventional hydrocarbons did not play out as envisioned. Many believe today that technological and economic developments will continue to increase estimates of ultimate recoverable resources.
The OAPEC Secretariat has pegged world proven reserves increased to 1.035 trillion bbl by 2000 from 1.020 trillion bbl in 1990 and from 550 billion bbl in 1970. Factoring in production over the same 30-year period reveals net additions to reserves of about 1.187 trillion bbl.
Jamali said that too often, scenarios of reserves replacement neglect to account for reserves accessible by enhanced oil recovery and for undiscovered reserves. "Most experts believe that at least an additional 10% to 15% of discovered oil in place can be produced with EOR techniques, if costs can be justified."
Adding past cumulative production, proven reserves, oil to be discovered, and oil to be produced with EOR, ultimate recoverable resources will "reach a minimum of 2.990 trillion bbl at the end of 2000," said Jamali.
Moreover, he said, geologists who believe production of the world's conventional oil will begin to decline in the first decade of this century "do not consider developments or breakthroughs in technology that may improve the recovery rate or additions to oil reserves."
Deep offshore oil
Ultimate deep offshore oil resources could range from 80�150 billion bbl, said DeLaytermoz and LeCourtier. "Setting aside extra-heavy oil and bitumen ..., deep offshore oil appears today to be the only major potential resource in the class of conventional crudes, outside the Middle East and the Caspian zone."
The authors contrast the availability of deep offshore oil with the massive amounts of unconventional or heavy oil reserves. To produce significant amounts of heavy oil, two major difficulties must be resolved.
Hot production schemes (steam injection, primarily) require "enormous quantities of medium pressure stream." As much as 1-3 bbl of vaporized water are required to produce 1 bbl of extra-heavy oil or bitumen, they said. Generating such amounts of steam not only entails significant consumption of energy but will also result in production of large volumes of CO2.
Also, for both hot and cold production schemes, the question of "production value enhancement" remains. "In effect these extra heavy, viscous, asphaltene-rich, and sulfur or heavy metal-laden products pose problems of transportation and are marketed with a discount."
The authors estimate that, within 20 to 30 years, the accumulated discovered reserves in deep offshore will be about 120-150 billion boe, with oil accounting for 80-100 billion boe of that total. Thus, "about 55-75 billion boe of deep offshore oil would remain to be discovered."
That's modest compared with heavy oil reserves but, among conventional reserves, ranks second only to those in the Middle East. Remaining reserves, they said, are in small or very small reservoirs, "with the exception of the Caspian Sea area."
The authors conclude that, absent validation of novel geological concepts under study, deep and ultra-deep offshore may not guarantee long-term supplies but "will bridge the gap as conventional resources are progressively exhausted, until technology developments make unconventional production technically attractive, economically viable, and environmentally sound alternative."