Special Report: Oil, gas reserves rise as oil output declines

Dec. 21, 2009
New estimates for Australia, China, and Turkmenistan have resulted in an increase in reported worldwide oil and gas reserves, according to Oil & Gas Journal's annual survey of proved reserves.

New estimates for Australia, China, and Turkmenistan have resulted in an increase in reported worldwide oil and gas reserves, according to Oil & Gas Journal's annual survey of proved reserves.

The world's oil reserves total 1.35 trillion bbl, up from 1.34 trillion in last year's survey (OGJ, Dec. 22, 2008, p. 20). Total gas reserves are 6.6 quadrillion cu ft, up almost 355 tcf from those reported a year ago.

The recession-driven drop in global oil demand in 2008 and 2009 led to a decline in this year's worldwide oil production. OGJ estimates that worldwide oil production this year will fall 3% from 2008 to average 70.5 million b/d.

In 2008, global oil production averaged 72.8 million b/d, climbing from 72.16 million b/d a year earlier. This increase was spurred by strong oil demand in the first half of 2008, which led to record oil prices.

OGJ compiles the estimates of proved reserves from an annual survey of official sources, including government agencies and ministries. Since most countries do not assess their reserves annually, many of the figures in this report are unchanged from a year ago.

Reserves changes

The region with the largest percentage changes in oil and gas reserves is Asia-Pacific, where total reserves of oil are up 18% from a year ago and gas reserves are up 25%. New reserves estimates for Australia peg economic oil reserves at 3.318 billion bbl and gas reserves at 110 tcf. These figures, obtained from Geoscience Australia, were derived under the McKelvey classification system.

China's reserves also jumped. The new figure for oil reserves is 20.35 billion bbl, while China's gas reserves are now pegged at 107 tcf.

Gas reserves in Turkmenistan are now estimated at 265 tcf, up from 90 tcf in the previous survey. The country's giant gas field, South Yolotan, was discovered in 2006 and drove this increase, which helped boost total gas reserves in Eastern Europe and the former Soviet Union by 8.5%. The region's oil reserves are unchanged from a year ago.

Since the previous edition of this report, the Organization of Petroleum Exporting Countries has reported increases in oil and gas reserves for Iran, Qatar, and Nigeria. Venezuela's gas reserves are reported 3% higher, although OGJ is holding its oil reserves steady from a year ago at 99.377 billion bbl.

With Ecuador rejoining and Indonesia leaving the group, OPEC's oil reserves have increased 0.8%, and its gas reserves have declined 1% from a year ago.

Canada's reserves estimate for oil declined 2%, while its gas reserves are up 7%. Conventional crude and condensate reserves in Canada are 4.814 billion bbl, according to the Canadian Association of Petroleum Producers, and the country's oil sands reserves now are 170.4 billion bbl.

The only region to record a decline in both oil reserves and gas reserves this year is Western Europe. Lower estimates for the UK and Turkey resulted in a nearly 3% decline in oil reserves in the region and a nearly 2% dip in gas reserves as compared with last year's report. In the UK, oil reserves are down 10%, and gas reserves are down 15% from the figures reported during 2008.

US reserves

The latest estimates from the US Energy Information Administration show an increase in proved gas reserves and a decline in proved oil reserves in the US. Accounting for discoveries, revisions, and production, gas reserves climbed 2.9% from a year earlier to 244.656 tcf, and oil reserves shrank 10.3% to 19.121 billion bbl. EIA estimates that natural gas liquids reserves in the US are 1.4% larger than a year earlier, totaling 9.3 billion bbl.

EIA also reported that using the new Securities and Exchange Commission rules that go into effect next year, which allow companies to assess their reserves using an average of first-day-of-the-month prices throughout the year rather than the current method based on what they could produce with reasonable certainty at the market price on the last day of the year, there would likely have been a smaller drop or possibly even an increase in crude oil proved reserves this year.

In 2008, gas reserves attributable to shale reservoirs grew 51% to a total of 32.8 tcf. Of this, 8.9 tcf was from discoveries, and 4.2 tcf was from upward revisions and other adjustments. Production from shale formations was 2 tcf in 2008, up 65% from a year earlier.

Proved reserves of coalbed methane declined by about 5% and now accounts for about 8.5% of US gas reserves. Coalbed gas production continues to grow and totaled nearly 2 tcf in 2008, IEA reported.

Oil production

Oil production from OPEC slid more sharply this year than the worldwide total, averaging an estimated 29.5 million b/d this year vs. 2008 average production of 32.2 million b/d.

Russian production rebounded from its 2008 slump. OGJ estimates that oil production in Russia will be up almost 2% from a year ago, averaging 9.9 million b/d. Big boosts to production in Azerbaijan and Kazakhstan as well helped push up 2009 output for Eastern Europe and the former Soviet Union by 3%.

The UK, Norway, and Denmark led a nearly 8% decline in this year's oil output in Western Europe, while in the Middle East, OGJ estimates that production fell 8.3%.

Africa's 2009 oil production is estimated to be down 6% from last year, with Libya, Algeria, Angola, and Nigeria each posting a sizable decline.

A rise in US oil production this year outpaced production contractions in Canada and Mexico such that overall output in the Western Hemisphere will post an increase of almost 1% to average an estimated 16.78 million b/d.

US crude and condensate production in 2009 will average 5.337 million b/d, up from last year's 4.95 million b/d, according to the EIA. This will be the first year that US oil production has increased since 1991.

OGJ estimates that oil production in Canada in 2009 will average 2.53 million b/d, down almost 3% from last year. Meanwhile, production in Mexico will fall 7% from 2008 to an average of 2.6 million b/d. Mexico has not recorded an increase in oil production since 2004.

OGJ subscribers can download, free of charge, OGJ Worldwide Report 2009 tables from the OGJ Online home page at www.ogjonline.com. Click "OGJ Survey Downloads," then "Worldwide Production" or "Worldwide Refining."