Fresh oil finds, technology can add to supply: Aramco
Published: Thursday, 14 September, 2006, 08:50 AM Doha Time
From left: Mexican Energy Secretary Fernando Canales Clariond; administrator of the US Energy Information Administration, Guy Caruso; president and chief executive officer of Saudi Aramco, Abdullah S Jum’ah, and ExxonMobil chief executive officer Rex W Tillerson attend the second day of the Opec international seminars focusing on the organisation’s future at Hofburg castle in Vienna yesterday
VIENNA: Saudi Arabia, the world’s biggest oil producer, said improving technology and new fields may help the world unlock 2tn barrels of oil in the next 25 years, or about double the existing proven reserves.
Abdullah Jum’ah, the chief executive officer of state-run Saudi Aramco, challenged engineers to raise oil-field recovery rates by 20% in 25 years, adding 1tn barrels to world reserves. New finds could add another 1tn. He expects Saudi Arabia alone to gain 200bn barrels of reserves in 30 years.
Saudi Arabia has “not had to draw down reserves in the last 10 years because we have been adding at least as much as we produce,’’ Jum’ah told reporters in Vienna, where he was attending a conference. “Saudi Arabia is under-explored. We will probably add 200bn barrels of oil 25 to 30 years from now.’’
Proven Saudi reserves now total about 260bn barrels, he said. Proven global oil reserves ended 2005 at 1.2tn barrels, with 264bn in Saudi Arabia, according to BP Plc’s Statistical Review of World Energy. To those reserves can be added another 1.5tn barrels from sources like oil sands and oil shale, Jum’ah said in a speech yesterday in Vienna, at a conference hosted by the Organisation of Petroleum Exporting Countries.
Taken together, with the additional 2tn barrels possible from new oil finds and improved recovery rates, Jum’ah’s estimates show a potential of 4.7tn barrels of oil, “or more than 140 years of supply at today’s current rate of production.’’
He gave no estimate of long it would take before that oil could be recovered.
The Saudi Aramco executive and the head of the US government’s energy forecasting agency both expressed confidence technology will increase oil reserves and production rates in coming years.
“Technological transfer occurs more quickly in this industry than in any other,’’ and high oil prices will speed up such advances, Guy Caruso, the head of the US Energy Department’s Energy Information Administration, said in Vienna yesterday.
Saudi Aramco has boosted its computing power 300-fold since 1999 and now has a better understanding of its reserves, Jum’ah said. He said reserves will probably grow in the US Gulf of Mexico, though he declined to provide any geographical detail of where world reserves might expand.
The size of existing reserves and resources discredits the “peak oil’’ theory that world oil production is already close to peaking, the Saudi executive said, repeating a view he has expressed previously.
Rex Tillerson, the chief executive officer of ExxonMobil Corp, the world’s largest publicly owned oil company, said at the same conference that technological progress will continue. “There has never been an era of easy oil,’’ Tillerson said. “Our industry has constantly operated at the technological frontier.’’
Caruso said some years ago, when prices were lower, companies operating in the North Sea “said they were reducing upstream development costs 10% a year.’’
“Now we are in a higher price environment, we are seeing developments in non-conventional oil that we could not conceive of at $20 a barrel,’’ Caruso said.
Non-conventional oil includes new methods of producing oil, or oil-like fuel, from sources such as rocks, coal, gas and plants.
Even so, Caruso’s estimates show non-conventional oil in coming years will contribute relatively little to the world’s oil supply. For example, oil sands may produce 3.6mn bpd by 2030, up from 1mn barrels a day last year, Caruso said.
Oil shale will rise to 100,000 bpd from zero now. Gas-to-liquids and coal-to-liquids supply will each rise to 2.1mn bpd in 2030 from about 200,000 bpd combined last year, he said. Biofuels supply will rise to 2.1mn bpd from 700,000 bpd. – Bloomberg |
