Reservoir depletion - From WorldOil: What's ahead in 2000
WorldOil, December Feature Article
Reservoir depletion. This is the current "buzz topic" throughout the literature. Depletion reflects the rate at
which the reserve of a well, field or country can be produced. It is a profile of the production curve and is
sometimes broken into "gross depletion," when nothing is done to the producing entity to abate the decline
in producing capacity, and "net depletion," that observed taking into account new drilling or development
activities implemented to maintain production. The difference between the "gross" and the "net" is obviously
impacted by the economics of the moment ? which is essentially the price of petroleum.
What is becoming clearer, as more depletion data are collected, is that depletion in most of the important
producing basins is steadily increasing. Gross depletion rates on the order of 15% are becoming
commonplace which, if not countered with massive investments in exploration and development, can
become the "net-depletion" rates for forecasting producing capacity.
While there are hundreds of published forecasts on oil supply / demand, some extending all the way to the
year 2020, the industry has no published estimates as to the average decline rate, or depletion, of the
existing supply base. All hydrocarbon reservoirs ultimately begin a production decline. Yet, no one publicly
publishes reliable, field-by-field decline estimates, or even makes a guess at the current blended rate for the
worldwide production base of oil and gas. The issue was not particularly serious for years, when a high
percentage of the world?s oil and gas production was coming from giant fields years away from any decline
when the world had tens of millions of bbl per day shut-in capacity. Decline rates were only relevant to the
owners of a particular field.
Today, the world of oil and gas is quite different. The amount of shut-in capacity is, at best, only 3?4
MMbpd, less than 5% of present demand. An ever-increasing percentage of the world production base now
experiences high decline rates, particularly if a massive amount of added development and workover activity
is not done to slow these declines. Moreover, a large number of the giant, older fields ? which anchor the
world?s hydrocarbon production base ? have now started to decline. As a result, it is becoming impossible
to accurately predict the supply side of any oil or gas forecast without dealing with the issue of depletion.
The rapid use of all the new forms of oil field technology tends to delay the decline rate of many fields until
peak production has been achieved, but the decline rate is rapid thereafter, as all available technology has
already been implemented.
The case for studying this issue is that it is estimated that the major large resources for the world?s supply
are beginning to show severe decline. Oil still remains the world?s largest and most important commodity.
An unrealistically low oil price can be just as destabilizing to the entire world?s economic health as an
unrealistically high price.
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