Contents: Public-domain proved reserves, Industry data
In understanding global oil depletion, it is crucial to recognise the yawning gap that exists between the public-domain data used by the majority of analysts, and the data used by the petroleum industry.
Public-domain proved reserves
Most analysts rely on proved reserves data, either reported by specific companies, or as listed in trade journals such as World Oil, The Oil & Gas Journal, or surveys by DeGolyer and MacNaughton. (The O&GJ data are reproduced in the otherwise excellent BP Statistical Review.)
As the Table of ‘Proved Reserves’ elsewhere in this website indicates, there is simply no mechanism for ensuring that reserves reported from different countries are correct. Moreover, the majority of countries fail to update what they do report. The resulting data are therefore misleading about the true size of global reserves, and quite worthless if one wants to analyse changes in these reserves.
O&GJ get their data in response to questionnaires they send annually to various government Energy Ministries, and to national and public oil companies. They say they ask geologists and petroleum engineers to make reasonableness checks of these replies. Their estimates exclude probable and possible reserves.
Similarly, World Oil sends out questionnaires, but twice a year. World Oil says they rely on government and company data for "about 55%" of the reserves estimates they publish; for the rest they use "opinions of people in the industry who are active in the areas in question".
DeGolyer and MacNaughton's reserves data seem to be largely drawn from the above two sources.
The problems with the public domain reserves data are discussed in detail in Perspectives on the Future of Oil. (R.W. Bentley, R.H. Booth, J.D. Burton, M.L. Coleman, B.W. Sellwood, G.R. Whitfield, Energy Exploration and Exploitation, Vol. 18, Nos. 2 & 3, pp 147-206, Multi-Science Publishing Co. Ltd., 2000.)
The problems include:
- There is no agreed definition of 'proved', at least, not one that is actually applied; every country abides by its own rules, pretty much the laws of the Wild West prevail.
- The data exclude probable reserves, so hide changes to the ‘most-likely’ reserves position.
- Fields unlikely to produce due to geological difficulties are sometimes included when caution says they should be omitted.
- Heavy oils are sometimes included when other countries would omit them.
- The ‘Quota Wars’ increases of the late 1980s added 300 Gb of new oil essentially overnight. These misleading increases are still being quoted by respected authorities as proof of relatively recent discovery success!
- As mentioned above, for many countries the data simply do not change, for well over a decade in some cases.
Given the many problems with the public domain 'proved' reserves data, it is unfortunate that many analysts still see these as reliable estimates of the size of reserves (even if a rather cautious one). These analysts are unaware that:
- the meaning of 'proved ' is so variable;
- that for many countries the real 'best-guess' reserves are typically 50% larger than the proved reserves indicate;
- by contrast, for a number of countries the reserves quoted are significantly
overstated, due to political reasons, reporting conventions, problematic oils or heavy oils;
- for many countries
the data do not change for years on end.
Good data on reserves do exist, at least within some of the producer countries, and for the relatively small amount of oil now controlled by oil companies. Some of these data see the light of day, but within technical announcements, and must be carefully collated and checked before any global picture emerges. But reserves data from large parts of the world, especially the FSU and the Middle East are not reported well, or at all, and need detailed analysis to extract.
Probably the only database with a global coverage that says how much oil exists world-wide in (proved + probable) reserves is that complied by Petroconsultants S.A. of Geneva, now part of IHS Energy. Their data are available via subscription to user institutions, but aggregate data, often adjusted, can be gleaned from the publications of others, while their summary global data appear annually in the trade press.
The database was not built for the purpose of estimating production peak dates, so isn’t perfect in this regard (e.g., it doesn’t explicitly separate out all EOR or heavy oil, and includes them if their expenditure is in place or committed), but it is one of the few data sources with reliable global numbers by field. In particular, it holds a figure for each field’s ultimately recoverable reserves using the currently committed, or reasonably envisaged, technology. This number is intended to be a 'best estimate', i.e. a P50% number. The database also includes new field wildcat data, which allow an estimate of the asymptote of a ‘cumulative find vs. number of wildcats’ curve to indicate each region’s ultimate.
The main database originally covered the world with the exception of the US and Canada, and had records of some 18,000 oil fields known to date. Of these, some 93% (by resource) were producing or awaiting production, and 7% had come to the end of their lives. Recently, data on US and Canadian fields were added, though these are recorded under somewhat different assumptions.
The database works on a current basis, i.e. it records the best current estimate for each field’s size, but holds the data as of the original date of find; hence revisions, both positive and negative, are backdated to the date of discovery. Data are culled from a wide variety of sources, including personal contacts, oil company reports and press releases, trade and newspaper reports, and governments. This database is used by the oil companies for many purposes; and by the US Geological Survey for estimating world oil resources, and the World Bank for assessing national oil-based loans. (top)