The AAPG Oil Reserves Conference, Nov 2006 - How Much Is Left?
Introduction
Late last year, in November 2006, the American Association of Petroleum Geologists organised a two day conference in Colorado Springs, USA which was by invitation only, described by the Oil and Gas Journal as the “AAPG Hedberg Research Conference on Understanding World Oil Resources”. The theme of the conference was to discuss the world’s remaining reserves of oil, and to reach some conclusions about how large reserves were. 75 specialists attended. Everyone who attended had specialist knowledge of original oil field data in specific basins around the world. The USGS were joint organisers and made a number of presentations comparing their studies with industry and state oil company experts having original data sets.
Oil and Gas Journal
The only journal / media outlet currently known to have reported on the conference is the Oil and Gas Journal, which published World oil production to peak in 15-25 years, AAPG told (login required) on the 23 April 2007. Here are some of the conclusions from the OGJ article:
1) World oil production reaches the peak by 2020-40, the rate will be 90-100 million b/d, only 10-20% higher than it was in 2005. Peak is likely to last 20-30 years before production begins its ultimate decline.
2) Present estimates of conventional and unconventional world oil resources range from 3.4 to 5 trillion bbl, which "fall in the optimistic range of published estimates of world oil resources". [ODAC - ‘optimistic’ usually means unrealistic]
3) Additions to world oil resources will come from three sources: recovery growth, undiscovered, and unconventional. Recovery growth from existing fields, not discoveries, has been the major contributor to world oil production in the last 25 years. Growth in recovery from existing fields is also likely to be the largest source of future additions to world oil supply.
4) Worldwide, about 300 billion bbl of known oil, or about a 10-year supply, is either being developed or planned for future development.
5) About 50% of the world’s oil has characteristics acceptable for enhanced oil recovery application, but EOR is currently applied to about 11%.
6) Extrapolating past trends of recovery growth from existing fields adds about 1 trillion bbl to the overall ultimate production expectation, about 200 billion bbl of which would come from EOR.
7) Undiscovered resources are the best understood source of future additions. Worldwide estimates of undiscovered oil resources presented at the AAPG Convention, drawn from an augmented version of the USGS Worldwide Assessment, range from 480 to 1,550 billion bbl. Nine geologic provinces (each with a mean estimate of 25 billion bbl or more) account for 65% of the mean world estimate. Given the locations of the undiscovered potential, most is 15-40 years away from initial production.
8) Unconventional resources-tar sands and extra-heavy oil, oil shale, and oil from mature source rocks-provide a massive in-place resource. Each is known to have at least 3-4 trillion bbl. The problem with these unconventional resources is recoverability. Each faces a major challenge, whether poor quality oil (extra-heavy oil), poor quality reservoirs (oil from source rocks), or both (oil shale). Production of extra heavy oils and oil shale also requires substantial energy, enough so that oil shale production may be severely constrained by being mostly uneconomic due to a low net energy gain.
That is more or less what was reported in the OGJ. These are notes taken during an ODAC discussion with someone who attended the conference.
ODAC Source
1) The USGS had a strong presence at the meeting primarily because it was as an organiser. This was apparent during the discussions of oil reserves which took place on a regional basis. For each region for which they gave a presentation, the USGS estimate of how much oil was left to find was significantly higher than that of the other presentations, i.e. from those who had data via industry sources. The total amount of conventional oil left to find (i.e. not the USGS estimates) is in the range of 200-300 B barrels.
2) Unconventional Oil. 10 trillion barrels of unconventional oil, mainly Canadian tar sands, Venezuelan heavy oil (production from which will be very limited under current political constraints) and USA shales. USA shales may reach 100,000 b/d, but unlikely to be higher because of environmental regulations. Canadian tar sands are likely to reach a production rate of 2 Mb/d by 2015. The higher quoted figures, while possible from a resource base stand point, are unlikely to occur. There are too many constraints – water, natural gas, manpower, equipment, and infrastructure.
3) The main source of future growth in oil will be reserves growth, not new oil. For any given field, reserves growth follows a given pattern and eventually reaches a plateau. With better technology, original estimate is further up the graph (i.e. the original estimate of total extractable oil is nearer to the final value), but difficult to tell where up the graph. New oil from reserves growth will be somewhere between 200 B and 1T barrels.
4) Saudi Arabia – 260 B barrels of reserves is a realistic figure, using secondary and tertiary methods. The main point is time, cost and equipment/manpower availability. 60 B barrels conventional oil left to find in Saudi Arabia. This figure came from a Saudi representative.
Discussion
The OGJ article states that “Undiscovered resources are the best understood source of future additions. Worldwide estimates of undiscovered oil resources presented at the AAPG Convention, drawn from an augmented version of the USGS Worldwide Assessment, range from 480 to 1,550 billion bbl.” Note that this is summarising the USGS data, which was generally found to be five times too high compared to the other conference participants with original data. A more realistic value is the figure of 200 to 300 B for yet-to-find conventional oil.
The main source of growth in oil reserves will be from existing oil fields, anywhere between 200 billion to 1 trillion barrels, the uncertainty is massive. This compares with only 200-300 B barrels yet-to-find.
While there are truly massive amounts of unconventional oil, the conference noted up to 10 trillion barrels mainly consisting of Canadian tar sands, Venezuelan heavy oil and USA shales, the production from these sources is never likely to be high. Interestingly, the estimates from the conference are significantly lower than is usually quoted in the media. Only 2 Mb/d by 2015 for Canadian tar sands and 100,000 b/d for USA shales.
Saudi Arabia may well have 260 B barrels of oil remaining, but it will largely be slow and expensive to extract. The amount of Saudi conventional oil yet-to-find is a fraction of other estimates, only 60 B barrels.
The OGJ article states: “World oil production reaches the peak by 2020-40, the rate will be 90-100 million b/d, only 10-20% higher than it was in 2005”. This allows for a lot of uncertainty, or is it political acceptability? Peaking by 2020 is at the upper range of most current forecasts (Peaking of world oil production: Recent forecasts, R. Hirsch, April 2007), but it would still entail a lot of pain if the global community is not prepared. But it also means that the current rate of 85 Mb/d is not far off the maximum of 90-100 Mb/d. A peak rate of 90 Mb/d would suggest a peak date much sooner than 2020, indeed closer to 2010 than 2020.
Conclusion
Interpreted as it should be, the results of this conference should have alarm bells ringing. 200 to 300 billion barrels of conventional oil yet-to-find is not very much, indeed it is less than the amount which “is either being developed or planned for future development” (OGJ item 4). And the forecast production from Canadian tar sands and USA shales indicates that this source can not be counted on to make a significant impact on world supply in the next ten years. The most important aspect of this conference is who attended – the world’s leading experts with original industry oil reserves data. This implies that the estimated remaining reserves concluded from this conference are likely to be more accurate than any others.
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