In the letter entitled “World decline rate,” the authors quoted a Cambridge Energy Research Associates forecast for a world oil supply of 112 million b/d by 2017 (OGJ, Feb. 4, 2008, p. 12). Taking the average world oil production of 86 million b/d in 2007 gives a daily supply increase from 2008 to 2017 of about 2.6 million bbl. Putting this more oil volume in relation to daily world oil production in 2007 gives about 3%.
For comparison, Chevron projected in 2007 in an advertisement that world oil demand could reach 115 million b/d in 2030 from 82 million b/d in 2004. In this case the daily oil demand increase would be about 1.3 million bbl and makes in relation to daily world oil production in 2004 about 1.5%.
Since average world oil production has been 86 million b/d and 82 million b/d in 2007 and 2004, the daily increase was 1 million b/d/year, or closer to Chevron’s forecast.
Which is more realistic—1.5% or 3%—is difficult to tell. But for me, there is nothing suspect about any of these percentages. Maybe CERA has forecasted the increased supply by adding how much more oil the world would need plus how much “new oil” the exploration and production industry has to produce to replace production declines. This new oil has to come from new discoveries, greenfields, brown and mature fields, improved and enhanced oil recovery, unconventional oil, etc. However, I question CERA’s story that the world’s oil production is declining at 4.5%/year.
To satisfy rising world oil demand, and at the same time replace production declines (both have “intelligently” to go hand-in-hand) requires fresh money to invest. The authors give an example for an investment volume: Saudi Arabia will invest $50 billion to increase production capacity by 2 million b/d (or $25,000/b/d). I think that this dollar-per-barrel figure is low to cover all needed capital expenditure for the work to be done from the reservoir to the pipeline.
Hani Murtada
Consultant
Gelsenkirchen, Germany
