DECLINING OIL GIANTS SIGNIFICANT CONTRIBUTORS TO U.S. PRODUCTION

Stanley C. Phipps
Petroleum reservoir engineer
Dallas

This article presents a statistical summary of production and reserves data for major U.S. oil fields and shows the importance of these fields to the total U.S. oil industry.

At least four main general conclusions can be made from the results of the review:

1. Major fields older than 50 years remain highly significant to current U.S. production and reserves.

2. Except for relatively unexplored prospective areas such as Alaska and California offshore, the future discovery of major U.S. fields is statistically very unlikely.

3. The majority of presently producing major U.S. fields will be essentially depleted-greater than 96% of present reserves produced within the next 15-25 years.

4. In the absence of additional major field discoveries the total U.S. oil producing rate will decline substantially during the next decade.

GIANT FIELDS REVIEWED

These results have been derived from Oil & Gas Journal's annual listing of basic production and reserves data by field for major U.S. oil fields. 1

Major fields are defined as those having an estimated ultimate recovery (EUR) greater than 100 million bbl.

The 286 major fields listed in the 1993 OGJ tabulation comprise less than 0.9% of the total U.S. oil fields. They are nevertheless of major importance to U.S. production and reserves because of the well known, highly skewed (usually log normal) distribution of field sizes when a large number of fields is considered.

Worldwide there are 1,331 major fields , 2 and therefore U.S. major fields comprised about one fifth of the world total at yearend 1992.

In order to evaluate the significance of major fields to current U.S. production and reserves, the author made a detailed statistical review of the data for these fields.

A second objective was to analyze the major fields data as a function of discovery date in order to assess the relative significance of older versus newer fields. The principal results of this review are summarized.

U.S. GIANT FIELDS

Based on the published data a total of 286 oil fields each having EUR of 100 million bbl or more had been discovered in the U.S. as of January 1993 (Table 1).

Texas has 96 of these fields, Louisiana 65, California 48, Oklahoma 17, Wyoming 15, Alaska eight, and 12 other states each one to seven. The 209 major fields in California, Louisiana, and Texas represent 73% of total LT.S. major fields.

All major U.S. fields represent only 0.9% of the total number of U.S. fields but account for about 65% of the total discovered U.S. reserves.

Sixteen or 5.6% of the major fields have ultimate reserves greater than 1 billion bbl (Table 2). Excluding the two in Alaska all of these fields were discovered before 1949 and the majority before 1930.

During 1992 these 16 fields accounted for 56% of the production for all major fields and 34% of total U.S. production.

As a group these fields are 79% depleted but still contain 62% of current reserves for all major fields and 38% of total U.S. reserves.

The significance of the two largest Alaskan fields, Prudhoe Bay and Kuparuk River, is particularly noteworthy. Together these fields increased U.S. ultimate reserves by almost 8% and in 1992 produced 21% of the total U.S. oil production.

TIME ELEMENTS

One half of the major fields had been discovered by 1935 and 80% by 1950.

The discovery rate for major fields from 1870 to 1993, excluding Alaska, followed approximately a normal probability distribution (Fig. 1). The timing of the major Alaskan discoveries was, of course, delayed relative to other U.S. fields as a result of the extreme geographic and economic conditions affecting Alaskan operations.

Since the discovery probability curve is basically complete relative to any extrapolated future discovery frequency it can be concluded that the statistical likelihood of future major field discoveries is very small for the contiguous U.S. The last discovered major field that was producing as of 1992 was Point Any, discovered off California in 1982.

About 50% of all major U.S. fields have been producing for more than 60 years, and almost 20% have produced for more than 75 years. The peak discovery period was 1925-30, when 43 fields or 15% of the major fields were discovered (Fig. 2).

During the 15 years 192539 a total of 106 major fields were discovered or 37% of all major fields found to date in the U.S.

PRODUCTION STATUS

The 286 major fields include 2917/c of the approximately 600,000 producing wells in the U.S . and currently produce about 61% of the U.S. total oil rate of about 7.1 million b/d.

Even without Prudhoe Bay field in Alaska, which produced 1.2 million b/d in 1992, the major fields produce 54% of the net remaining total U.S. rate.

Of the 186 major fields producing for more than 50 years, 34 were producing more than 10,000 b/d each as of 1992 and nine were producing more than 50,000 b/d each.

The two oldest major producing fields in the U.S. are Brea-Olinda and Coalinga fields in California. Discovered in 1880 and 1890, respectively, they were producing 4,600 b/d (7.3 b/d/well) and 32,000 b/d (16.2 b/d/well) during 1992.

Two other fields, Kern River (1899) and Midway-Sunset (1894) in California, produced during 1992 at rates of 121,000 b/d and 166,000 b/d, respectively, equivalent to about 17 b/d/well.

The total 1992 oil rate for all major fields discovered before 1940 was equal to 42% of the 1992 total rate for all major fields including Alaska and 26% of the total oil rate.

These figures show no definite trend with time of discovery; that is, the average current oil rate for many of the oldest discovery groups is as high or higher than most for more recent fields.

On the basis of average oil rate per producing well by five year discovery periods the later discoveries show significantly higher 1992 well rates, as would be expected.

EFFECT OF OLDER FIELDS

Another point of analysis was the cumulative percent of total oil rate by fields for all major fields as a function of discovery date, along with the cumulative fields discovery curve.

Even including Alaska almost 30% of the 1992 major fields oil rate was from fields discovered before 1930, and more than 30% was from fields found before 1960.

The current oil rate contribution of major fields discovered long ago continues to be very significant to U.S. production.

In terms of cumulative production the 286 major fields produced 55% of the approximate 171.58 billion bbl cumulative U.S. oil recovered to 1993 (53% net without Prudhoe Bay).

FIELD SIZES

The average EUR by fields by five year discovery intervals is not symmetrical with time (Fig. 3). Close to two-thirds of major field reserves excluding Alaska had been found by 1935.

The decline in total reserves found after.1935 reflects both a decline in the number of fields found (Fig. 1) and a reduction in average field size. Although there appears to be a modest decline in average field size since 1910, data on cumulative reserves as a function of cumulation fields discovered shows that actually these are two fairly constant trend lines for average volume discovered per field.

From 1900-30 discoveries averaged about 320 million bbl of reserves per field with only moderate variation. Since 1936, however, the average discovery volume within the giant fields has been about 240 million bbl of reserves per field, or 25% less than that before 1930. This chance in average discovery volume accounts for the lack of symmetry in a reserves distribution plot.

In terms of average reserves per discovery it is obvious that 1930-36 was the major discovery period. Thirty major fields including East Texas were discovered during this period, and these fields totaled 18 billion bbl of reserves, equivalent to almost 17% of total major field reserves found to 1993 including Alaska (Fig. 4).

Even without East Texas' 5.4 billion bbl, the 1930-36 fields would include about 12% of the net total U.S. major field reserves.

REMAINING RESERVES

Analysis of the relative distribution of estimated remaining reserves as a function of discovery date by five year time intervals shows that the majority of current major field reserves (71% excluding Alaska) are in fields older than 50 years.

Analysis of 1992 depletion rates shows that the current depletion rates are significantly lower for fields discovered before 1905 compared with that for subsequently discovered fields. Some of these earliest fields still have major reserves remaining (Table 2).

One half of the major fields have current reserves exceeding 10 million bbl and 20% exceed 30 million bbl. Less than 10%, or about 28 fields, still have remaining reserves greater than 100 million bbl.

A significant number of fields discovered before 1930 are less depleted relative to their estimated ultimate recovery than fields discovered during 1930-50 (Fig. 5). For fields discovered since 1949 about three fourths are more than 8017, depleted, and only 7% had more than half of their original reserves remaining at yearend 1992.

The overall depletion status for all major fields is 87%, but these fields nevertheless contain 61% of the present remaining total U.S. reserves as of end 1992 (53% net without Prudhoe Bay).

A total of 44% of major field remaining reserves (27% of total U.S. reserves for all fields) are in major fields discovered before 1940.

For the relative reserves data given in this article the total remaining U.S. reserves as of Jan. 1, 1993, were estimated to be 23 billion bbl.4 Total U.S. discovered reserves to 1993 were estimated to be 195 billion bbl.3 4

A strong parabolic correlation exists between total field oil rate for 1992 and remaining reserves (Fig. 6). The resulting average depletion rate is an exponential function of remaining reserves and ranges from 18%/year to 13%/year depletion for remaining reserves ranging from 1 million bbl to 100 million bbl.

This range of depletion rates, if maintained constant for a given field, is equivalent to 90% depletion of remaining reserves over 12 to 17 years, respectively. A constant depletion rate of reserves is equivalent to constant percentage rate decline.

Since field rates are statistically related to reserves, the number of wells can also be related to reserves as a function of the average rate per well.

REFERENCES

1. U.S. fields with ultimate oil recovery exceeding 100 million bbl, OGJ, Jan. 25, 1993, pp. 80-81.

2. Ivanhoe, L.F., Global oil, gas field sizes tallied, analyzed, OGJ, Feb. 15, 1993, pp. 87-91.

3. Worldwide production, OGJ, Dec. 28, 1992, p. 81.

4. U.S. oil and gas reserves resume downward trends, World Oil, February 1993, pp. 80-81.

Copyright 1993 Oil & Gas Journal. All Rights Reserved.