Steven Poruban
Senior Staff Writer
HOUSTON, Feb. 12 -- Continuing political tension in the Middle East as well as turbulent times in Venezuela have served to create an unprecedented unpredictability in worldwide oil supplies, according to Global Oil Trends 2003, a study conducted by Cambridge Energy Research Associates in collaboration with Accenture and Sun Microsystems. The study was released to the press Wednesday at CERA's annual week-long energy conference in Houston.
"Geopolitical and market uncertainty across the globe have led to a destabilization in the world oil supply network, challenging the industry to explore the prospects for doing business in new and more efficient ways," said CERA Pres. and CEO Joeseph A. Stanislaw.
One of the most significant changes that the study found was the large increase in world oil reserves last year. Estimated world proven oil reserves, as of December 2002, rose to 1.213 trillion bbl, up 181 billion bbl from yearend 2001, the study said.
"Most of this dramatic rise reflects a reporting change in Canada that now includes 175 billion bbl of previously unreported extra heavy oil in Alberta's oil sands," CERA noted (OGJ, Dec. 23, 2002, p. 113).
Canada's expanded definition of heavy oil reserves to include Alberta's vast oil sands subsequently increased North America's share of global reserves to 18% in 2002 from 5% in 2001.
"In the meantime, demand growth in 2002 over 2001 was a miniscule 20,000 b/d—the weakest growth since 1983, according to CERA.
Other trends
CERA found that oil production by members of the Organization of Petroleum Exporting Countries averaged 25.4 million b/d in 2002, which was a decrease of more than 2 million b/d from 2001. Meanwhile, "A 1.1 million b/d rise in non-OPEC production was the largest annual gain since 1984, with Russia, Canada, Brazil, Angola, Kazakhstan, and Equatorial Guinea accounting for the largest individual country shares," CERA noted.
For the first time since 1999, CERA said, world oil production fell. Production of oil, condensate, and natural gas liquids averaged 73.7 million b/d, down 800,000 b/d from the 2001 average.
World refining capacity increased as well by nearly 1 million b/d to 82.5 million b/d in 2002 from the previous year. "Growth in regional demand spurred increases in local capacity in areas such as China and North America, while regions of stagnating demand (such as Europe) saw little or even negative capacity growth," CERA said.
Regarding prices, CERA noted, "Although the average price of (West Texas Intermediate) crude in 2002 posted the smallest percent change since 1970, the quarterly trend through the course of the year was one of significant volatility. In the first quarter, WTI averaged $21.54/bbl, but by the third quarter, prices had risen to an average of $28.29/bbl.
"The fourth quarter average was $28.28/bbl for WTI, but prices moved in fits and starts during the quarter, ranging from $3 below to more than $4 above the quarterly average."
Contact Steven Poruban at [email protected].
