Important world oil supply report
WorldOil Magazine, April issue
Column by Robert E. Snyder, Executive Engineering Editor
Douglas-Westwood Ltd. has completed a major study, the second edition of The World Oil Supply Report, a 280-page study that says the world is still drawing down its oil reserves, faster than ever. And, even assuming no growth in demand, it is likely that by the end of this decade, OPEC will have to be in a position to increase its output by over 1 million bbl/day per year, every year, to offset declines in non-OPEC output.
The overall conclusion of the extensive research carried out for this report into all potential sources of oil, is that the world's known and estimated, yet-to-find reserves cannot satisfy even the present level of production of some 74 MMbpd beyond 2020.
Any growth in global economic activity only serves to increase demand and bring forward the peak year. One percent demand growth brings the year to 2016, when production is expected to peak at around 85 MMbpd. And with 2% growth, peak production of around 90 MMbpd occurs in 2012. Non-OPEC decline is expected to begin around 2007, whatever the demand.
The report notes, "At the end of 2002, 99 countries had produced oil or were expected to produce it in the future. Of these, 49, including the US and Russia, are well past peak; 11, including the UK and Norway, are just beginning to see declining production; and 12, including Australia and China, will reach peak soon. The remainder will see peaks within the next 25 years.
Demand hardly changed from 2001 to 2002, although demand growth over the next few years is still expected to average 1% per year. Whatever happens in Iraq, it is likely to have low output during 2003, but beyond that, an easing of constraints on investment should result in a rise in capacity to generate revenue for reconstruction."
The report stresses that oil and service companies must develop strategies for survival. Decisions need to be made on where and what energy sources to focus on over the long term. Profits already need to be at least partly employed in bringing to market other forms of energy.
For further information, see: dw-1.com
or e-mail John Westwood at john@dw-1.com.
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WorldOil Magazine, April issue
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