BP study

Oil Peak – A Geologist’s View

Francis Harper, BP plc

Energy Institute, November 2004

How long will current reserves last?

1000 bn bbl

25 bn bblp.a.

Reserve Adds:

• Exploration• Reserves Growth• Nonconventionals

0

5

10

15

20

25

30

35

10 20 30 40 50 60

Years

Pro

du

cti

on

(b

n b

bl)

10% Decline

5% Decline

3% Decline

1.5% Up, 5% down

31 years21 years

10 years

15 years

A 40 year supply?

Exploration

Exploration Potential – Discovery Trend

Data based on those of IHS Energy

• Decreasing trend in volumes found from the early 60’s (peak) to the early ’90’s.• Slight increasing trend over the last decade.• Production exceeds discoveries for last ca. 20 years• Are these numbers consistent?

0

5

10

15

20

25

1990 1995 2000

Dis

co

ve

red

Vo

lum

es

(b

nb

bl)

Kashagan

Deepwater

Other

• Reversal in discovery decline largely due to the deepwater exploration theme – will this continue?• Is Kashagan unique or are there other supergiants?• Are the peak years of ’99 and ’00 anomalous?

0

5

10

15

20

25

1990 1995 2000

Dis

co

ve

red

Vo

lum

es

(b

nb

bl)

Kashagan

Deepwater

Other

• Reversal in discovery decline largely due to the deepwater exploration theme – will this continue?• Is Kashagan unique or are there other supergiants?• Are the peak years of ’99 and ’00 anomalous?

0

10

20

30

40

50

60

70

80

90

100

1950 1960 1970 1980 1990 2000

Dis

co

ve

red

Vo

lum

es

(b

nb

bl)

Discovered

Produced

FailureUneconomic Success

Economic Success

Exploration

Deepwater Basins – Success and Failure

Lwr. Congo

Niger Delta

Campos

GoM

Ca. 1500 Exploration wellsCa. 120 basins testedCa. 30 with discoveriesCa. 20 w. economic disc.

Deepwater = >500mData based on those of IHS Energy

0

5

10

15

20

0 10 20 30 40Discovery sequence

Dis

co

ve

red

OE

(bn

bo

e)

Campos

0

2

4

6

8

10

12

14

0 10 20 30 40 50Discovery sequence

Dis

co

ve

red

OE

(b

nb

oe

)

Congo

0

2

4

6

8

10

12

0 10 20 30Discovery sequence

Dis

co

ve

red

OE

(b

nb

oe

)

Niger

0

5

10

15

20


Dis

co

ve

red

OE

(bn

bo

e)

GoM

0

5

10

15

20

0 10 20 30 40Discovery sequence

Dis

co

ve

red

OE

(bn

bo

e)

Campos

0

2

4

6

8

10

12

14

0 10 20 30 40 50Discovery sequence

Dis

co

ve

red

OE

(b

nb

oe

)

Congo

0

2

4

6

8

10

12


Dis

co

ve

red

OE

(b

nb

oe

)

Niger

0

5

10

15

20


Dis

co

ve

red

OE

(bn

bo

e)

GoM

0

50

100

150

200

250

300

350

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

Ori

gin

al R

eser

ves

(mm

bo

e)

Ghawar

Qatar North,S.Pars

ShtokmanKashagan

Exploration

Oil and Gas Fields >= 10 bn bbl oil equiv.

• Ca. 50 Fields with >10 bnboe ultimate Potential• Kashagan is the only new supergiant oil field found in the last 25 years

Volumes overviewed for field growth potential


Exploration

Oil and Gas Basins >= 10 bn bbl oil equiv.

Volumes overviewed for growth and YTF


0

100

200

300

400

500

600

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

Ori

gin

al R

eser

ves

(mm

bo

e)

N.Sea

Arabian

S.Barents

W.Siberia

• Ca. 50 Basins with >10 bnboe ultimate Potential of which ca.5 discovered pre-1900• No major new oil province found since the North Sea other than as deepwater extensions of known basins

0

50

100

150

200

250

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350

400

450

500

1950 1960 1970 1980 1990 2000

Av

era

ge

fie

ld s

ize

(m

mb

oe

)

Exploration

Field Sizes and Success Rates

0

5

10

15

20

25

30

35

40

1950 1960 1970 1980 1990 2000

Ex

plo

rati

on

Su

cc

es

s R

ate

(%

)

Success rates from new-field wildcats has increased from ca 1 in 6 to ca 1 in 3 over the last 50 years

Average discovery sizes have tracked total discovery volumes declining to about 50 mmbbl by 1980.

Data from IHS Energy

Exploration

Exploration Potential Summary

• Discovered volumes have been declining since the end of the ’60s

• The deepwater theme of the ’90s has helped to reverse this trend but this will not last indefinitely

• The number of supergiant oil fields and the number of giant oil provinces have fallen off markedly in recent years

• Maximum and average field sizes are declining

BUT

• Drilling success rates are rising, driven by advances in the technology of imaging

0

10

20

30

40

50

60

70

80

90

100

1950 1960 1970 1980 1990 2000

An

nu

al D

isc

ov

eie

s (

bn

bb

l)2003 Est.1997 Est.

Reserves growth

Discovery estimates grow with time

• Ca. 200 billion bbl added to discovery estimates (’50-’96) between ’97 and ‘03• Growth applies primarily to the bigger, older fields

Data from IHS Energy annual reports

0

500

1000

1500

2000

2500

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

Cu

mu

lati

ve

Dis

co

ve

red

Vo

lum

es

(b

n b

bl)

1993 Rpt

1994 Rpt

1995 Rpt

1996 Rpt

1997 Rpt

1998 Rpt

1999 Rpt

2000 Rpt

2001 Rpt

2002 Rpt

2003 Rpt

Reserves Growth

Growth in IHS Reserves – World

Data from IHS Energy annual reports

0

10

20

30

40

50

60

1993 1996 1999 2002

Gro

wth

to

19

90

Cu

m

Re

se

rve

s

During the 11 years to 2003, the IHS estimate of cumulative discovered volumes to 1990 has increased by an average of 40 billion bbl per year

0

10

20

30

40

50

60

1993 1996 1999 2002

Gro

wth

to

19

90

Cu

m

Re

se

rve

s

0

10

20

30

40

50

60

1993 1996 1999 2002

Gro

wth

to

19

90

Cu

m

Re

se

rve

s

During the 11 years to 2003, the IHS estimate of cumulative discovered volumes to 1990 has increased by an average of 40 billion bbl per year

Reserves Growth

Sources of Field Reserves Growth

Extension(Stratigraphic)

Extension(Structural)

Addition(Shallower Pool)

Addition(Deeper Pool)

Addition(Satellite)

Fields grow either by increases in Hydrocarbons-In-Place (extensions, additions) or by increases in Recovery actor (revisions, improved recovery)

Revisions/Improved Recovery

Data from IHS Energy database

• The average global oil recovery factor is about 30-35%• Original Discovered Reserves are about 1950-2200 billion bbl• Original Discovered In-place volumes are about 5500-7000 billion bbl• Every 1% increase in average global recovery factor adds about 55-70 billion bbl reserves, almost equivalent to a UK North Sea

Reserves Growth

Growth by Improved Recovery

Plots below based on ca. 9000 fields worldwide with recovery factors- containing ca. 1400 bbo with average RF of 30%

0

200

400

600

800

1000

1200

1400

1600

1800

0-5 10-15 20-25 30-35 40-45 50-55 60-65 70-75 80-85

Recovery Factor Bands

No

. of

Fie

lds

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60

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100

120

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160

180

200

0-5 10-15 20-25 30-35 40-45 50-55 60-65 70-75 80-85


Vo

lum

es

in F

ield

s (b

bo

)

0

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800

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1200

1400

1600

1800

0-5 10-15 20-25 30-35 40-45 50-55 60-65 70-75 80-85


No

. of

Fie

lds

0

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100

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140

160

180

200

0-5 10-15 20-25 30-35 40-45 50-55 60-65 70-75 80-85


Vo

lum

es

in F

ield

s (b

bo

)

All fields with >100 mmbbl and >7 years data

Reserves Growth

Reserves Changes in UK Oil Fields

Data from DTI Brown Book reports

Average

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

0 2 4 6 8 10 12 14 16 18 20

Years since Annex B

Res

erve

s ch

ange

Fac

tor

Individual field reserves changes may be positive or negative and can easily half or double the size of a field. On average, however, fields tend to grow.

• Reserves estimates are uncertain and will change with time – these can go up or down but on average will be positive.

• Reserves growth is primarily a function of big, old fields.

• Growth occurs both by increasing hydrocarbons in-place and by increasing recovery factor.

• Most of discovered oil remains in the ground – this is potentially an enormous prize with a 1% increase in global recovery adding about 55-70 bn bbls.

BUT

• Increasing recovery is difficult and expensive and most of reserves growth adds may not affect global peak production

Reserves Growth

Reserves Growth Potential Summary

Canada36%

Venezuela19%

Others9%

MidEast1%

Africa3%

USA32%

Nonconventional Oil

Resource Type and Distribution

Data from IEA 2004 (WEO)

7 trillion bbl Oil-in-Place

(Extra)-Heavy Oil

Bitumen

Oil Shale

Nonconventional Oil

Production Potential

• IEA projects nonconventional production growing at ca. 8% p.a. to about 10 mmbpd by 2030• in 2030, 23% of this is expected to be GTLs (+CTL, Biofuel?)

0

2

4

6

8

10

12

2000 2010 2020 2030

Pro

du

cti

on

Po

ten

tia

l (m

mb

pd

)

GTLs (+?)

Non-conv Resource

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140

1980 1990 2000 2010 2020 2030Pro

du

cti

on

Po

ten

tia

l (m

mb

pd

)Nonconv

Conventional

Nonconventional production is still only a small fraction of total estimated IEA production (ca. 5% in 2020)

0

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140

1980 1990 2000 2010 2020 2030Pro

du

cti

on

Po

ten

tia

l (m

mb

pd

)Nonconv

Conventional

Nonconventional production is still only a small fraction of total estimated IEA production (ca. 5% in 2020)

• Nonconventional Oil sources include– Heavy oil– Bitumen– Oil shale– Fractured source rock– Gas-to-liquids– Biofuels

• Heavy oil and bitumen are the most important in resource terms and are dominated by Venezuela and Canada respectively

• The resource base is very large and it will become an important part of future supply

BUT

• There are large monetary and environmental costs involved and the rate of growth relative to the demand is limited

Nonconventional Oil

Summary of Nonconventional Potential

N.America360 bnbl

S.America200 bnbl

FSU330 bnbl

MidEast810 bnbl

AsiaPacific130 bnblAfrica

190 bnbl

Europe80 bnbl

World

2100 bnbl

2

Distribution, Maturity of Conventional Oil

• Most regions of the world are either at or past the mid-point of depletion• MidEast (and FSU and Africa) have produced <50% of their known resource

ProducedReserves

• Existing discovered reserves are unlikely to sustain demand for more than about 15 years

• Exploration cannot be expected to replace production and its contribution may continue to decline

• Reserves Growth is likely to continue as the dominant form of reserve adds but much of it will only slow post-peak production decline

• Nonconventional oil will become increasingly important – there is a very large resource but converting it into reserves has significant financial and environmental costs

• Non-OPEC is likely to reach a resource-constrained production peak from conventional oil in the next 10 years – thereafter production capacity will be concentrated in progressively fewer countries

Summary

BP study

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