Total reserves, production climb on mixed results

Dec. 6, 2010
With the inclusion of some large oil reserves in Africa and a boost in Venezuela, Oil and Gas Journal's annual look at reported worldwide reserves shows an increase to 1.47 trillion bbl from 1.35 trillion bbl in last year's survey.

Marilyn Radler
Senior Editor-Economics

With the inclusion of some large oil reserves in Africa and a boost in Venezuela, Oil and Gas Journal's annual look at reported worldwide reserves shows an increase to 1.47 trillion bbl from 1.35 trillion bbl in last year's survey (OGJ, Dec. 21, 2009, p. 18). Natural gas reserves now total 6.6 quadrillion cu ft, up less than 1% from a year ago.

While some members of the Organization of Petroleum Exporting Countries late this year have reported additions to reserves, the newer figures are not included in OGJ's totals, as there is still room for discussion regarding the politics involved in reserves estimates as they relate to output targets within the organization.

Worldwide oil production this year will climb almost 2%. In 2009 oil output averaged 70.95 million b/d, down nearly 3% from a year earlier as a result of reduced demand during the global economic contraction.

OGJ gathers 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 additions, updates

Just a few large additions have resulted in a 9% surge in total oil reserves from last year's total.

Uganda is included in the survey for the first time with 1 billion bbl of proved oil reserves and 500 bcf of gas reserves. Tullow Oil PLC reports another 1.5 billion bbl in prospective resources in the East African nation in addition to these totals. Uganda does not yet have any oil or gas production.

Ghana's oil reserves are now estimated at 660 million bbl due to the discovery of Jubilee, Tweneboa, Owo, and other fields. Operated by Tullow, Jubilee field was due to start oil production this month.

Israel's gas reserves are now estimated to be 7 tcf due to the discovery of Tamar field in the Levant basin in the eastern Mediterranean, although first sales of gas from Tamar are not expected until late 2012.

Venezuela now reports that its oil reserves total 211.17 billion bbl, buoyed by heavy oil in the Orinoco belt. As with Canada's oil sands, development of these heavy oil deposits will stretch far into the future. OGJ previously published Venezuela's oil reserves at 99.4 billion bbl.

Reserves held by OPEC total 1.06 trillion bbl and account for 72.5% of the worldwide total of oil reserves. The organization's gas reserves, accounting for 48% of the world, total 3.2 quadrillion cu ft.

In October, OPEC members Iraq and Iran each hiked their reserves estimates. Iraq cited work by international oil companies developing 12 fields when it increased its reserves estimate to 143 billion bbl of oil from 115 billion bbl (OGJ Online, Oct. 4, 2010). Iran, only days later, announced that its new official oil reserve estimate had increased to 150.31 billion bbl from 137.62 billion bbl and would rise again by yearend (OGJ Online, Oct. 12, 2010).

OGJ has included neither Iraq's nor Iran's recently updated reserves in the table this year but instead will await further discussion of these figures to make upward adjustments.

In a speech on Nov. 1, Ali I. Al-Naimi, Minister of Petroleum and Mineral Resources of Saudi Arabia, said that at current production levels the Kingdom could continue to supply crude oil for another 80 years, even if it never found another barrel. However, Saudi Arabia is finding those new barrels, he said.

"In fact, even though we produced 62 billion bbl of oil between 1990 and 2009, our reserves have not decreased. Through new discoveries and improved recoveries, we are adding as much oil as we are producing every year. And we have been doing this for the past 20 years," Al-Naimi said. Saudi Arabia's oil reserves are 260.1 billion bbl, and its gas reserves total 275.2 tcf.

The largest change in total reserves by region is in Western Europe, where estimated oil reserves are down 10% from previous estimates and gas reserves are 8% lower. This reduction primary reflects production in Norway, Denmark, and the UK. Oil reserves are also lower from a year ago in France but higher in the Netherlands, Turkey, and Italy.

Reserves in Brazil, N. America

The most recent figures show that Brazil's reserves of both oil and gas increased during 2009. Proved oil reserves in Brazil are 12.857 billion bbl, with 93% offshore. Proved gas reserves in Brazil at yearend 2009 were 12.94 tcf, with offshore reserves accounting for 82% of the total.

Petrobras reports estimates of 5-8 billion bbl of recoverable oil in Tupi and Iracema fields and 1.1-2 billion bbl of recoverable oil in Guara field.

Brazil's National Petroleum Agency (ANP) recently said the country's offshore Libra subsalt oil discovery could hold as much as 15 billion bbl of oil. But analysts have expressed a certain degree of skepticism about this estimate, as it was based on the results of a single well that has not yet reached full depth (OGJ Online, Nov. 5, 2010).

Royal Dutch Shell PLC reported that its largest 2009 proved reserves additions came from deepwater field developments in Brazil with Parque das Conchas field and in the Gulf of Mexico with Perdido and Auger fields, from new fields linked to the Gorgon LNG project in Australia, and from expansion of the Athabasca oil sands project in Canada.

Canada's Energy Resources Conservation Board (ERCB) announced this year that due to production, its total remaining bitumen established reserve estimate for Alberta was revised to 169.9 billion bbl from 170.4 billion bbl. Conventional oil reserves are now estimated at 1.4 billion bbl, down 2% from the previous estimate, ERCB reported.

The latest estimates of Canada's total conventional oil and gas reserves, however, had not been released as OGJ went to press. Also, new estimates of total reserves for the US were unavailable from the US Energy Information Administration as of presstime and are therefore unchanged from last year's survey at 19.121 billion bbl of oil and 244.656 tcf of gas.

Mexico's reserves are down slightly from their previous estimate to 10.42 billion bbl, and its gas reserves are nearly 6% lower at just under 12 tcf. Offshore fields account for 71% of Mexico's oil reserves and 40% of its gas reserves, according to Petroleos Mexicanos.

Oil production

Total North American oil production during 2010 will climb 2.4% to average 10.8 million b/d, as the US and Canada register output gains and Mexico's production dips.

US oil production this year will average 5.49 million b/d, OGJ forecasts. During 2009, output was 5.36 million b/d. Oil production in Alaska continued to decline in 2010 after falling to average 648,000 b/d last year from an average of 683,000 b/d in 2008.

Production of oil in Canada will jump about 6% this year from last year's average of 2.59 million b/d. Meanwhile, production in Mexico will decline for the sixth consecutive year, slipping 1% to average 2.575 million b/d in 2010.

Western Europe will record the largest decline in oil production of all the regions for 2010. OGJ forecasts that the combined oil output from these countries will contract by 10% to average 3.5 million b/d, as a 11% decline in output in Norway will combine with a nearly 12% drop in the UK and a 6% decline in Denmark. Germany, Austria, and the Netherlands will also post lower oil production figures from 2009.

Oil production in Asia will increase more than any other region in 2010 with a 4% climb from last year to 4.57 million b/d. During 2009, production in Asia fell more than 2% on lower worldwide demand.

Russian oil production, projected to average 10.2 million b/d, will grow again this year from last year's 9.9 million b/d. Total oil output in Africa will increase 3% in 2010 on the strength of production in Nigeria, where production will climb 13% this year to average 2.07 million b/d.

Total production by members of OPEC this year will increase 1.5% to average 29.96 million b/d, OGJ forecasts.