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IIASA-IEW June 19, 2001 Estimates of oil reserves Jean Laherrere 1

IIASA-International Energy Workshop Laxenburg June 19, 2001Plenary Session I: Resources

“ Estimates of Oil Reserves ”by Jean Laherreree-mail: [email protected]: http://www.oilcrisis.com/laherrere/

http://mwhodges.home.att.net/energy/energy.htm

This presentation is a reduced version of a full paper available on IIASA siteThe numbers of the graphs below are those of the full paper (100 graphs)

Table of Contents:-Introduction-1-What oil? : product, measures: volume or weight or energy, unit,abbreviation, prefix, equivalence-2-What is published? : Political versus technical, false accuracy-3-Assessment: creaming curves (Shell, Africa, FSU, Europe, ME, LatinAmerica), correlation annual discovery & annual production, parabolic fractaldistribution (Niger delta)-4-Examples of reserves & production from: North Sea, Venezuela, Mexico,Colombia, Nigeria, China, FSU, Oman, Angola, and Algeria-5-Reserve growth: recovery factor, geology, technology, oil price, poor data,examples from UK Brown Book, evolution of major oilfield technical reservesin 6 different countries-6-Reserves & resources-7-Ultimates: retired geologists group, evolution, USGS 2000, East Greenland,others,-8-Forecasts on oil prices-9-Future production: past (Halbouty 1979), USDOE 2001, IEA, comparison,global liquids & gas conventional+unconventional-10-Impact on assumptions in IPCC studies: population, primary energy,comparison scenarios oil & gas and mine, GPD, Heating days-Conclusions

-Introduction-culture of belief in growth, decline is politically incorrect-Antoine de Saint Exupery wrote: « we do no inherit from our parents, weborrow from our children »-two schools on reserves:so-called “Pessimists” = mainly retired geologists or retired CEO, technical data


so-called “Optimists” = mainly economists or governmental agencies, politicalor financial data-Reporting data on oil production or oil reserves is a political act.-US poor practice to report only “Proved Reserves” and to omit probablereserves because the SEC-90% of US reserve additions = revisions of past discoveries = leads to reservegrowth concept-rest of the world use proven + probable reserves-technical data confidential, “scout” database very expensive-missing barrels in production from IEA, impression of abundance = 10$/b 1998-“Optimists” believe in technology but ignore what technicians say-bad use of units-oil was lately presented as minor compared to information and new economy

-1-what oil?Oil could be-crude oil 65 Mb/d,-crude oil + condensate (at wellhead) 68 Mb/d-crude oil + condensate + NGL (natural gas liquids) at gas processing plants-petroleum 76 Mb/d crude oil +NGL + synthetic oil + refinery processing gains+other oils + stock withdrawal.Oil supply is different from oil demandCGES Mb/d 1998 1999 2000supply 75.3 74 76.6demand 73.8 75.2 76.1In the US, the importance of the NGL (24%) and the processing gain (12%)versus the domestic production has to be noted.Conventional covers usually primary and secondary recovery for porous andpermeable reservoir, identified water contact and oil characteristic (light andmedium gravity and not viscous oil).Unconventional covers unusual reservoir characteristics, enhanced oil recovery(tertiary recovery), extra heavy oils (heavier than water), tarsands (defined byviscosity), tight reservoir, coalbed methane, geopressured aquifers, methanehydrates, oil shales (in fact mainly immature source-rock which should beclassified as coal). Some include deepwaters (vary from author from 200 m to1000 m), ultradeepwaters (over 2000 m), Arctic.USGS define unconventional as continuous type accumulations where there isno water contact-1-2-measures?-1-2-1-volume or weight or energyOil could be given either in gallons, barrel, cubic meter, ton, exajoule (EJ=10E18 J), Btu (quad= quadrillion Btu ≈ EJ)


In UK and France oil and condensate (in fact NGL) are given in ton, but inNorway oil, and condensate are in cubic meter (as Canada) but NGL in ton, inUS oil and condensate are in barrel (condensate could be in barrel oil equivalentdifferent from the measured volume). WEA reports gigaton and exajoule, IEA &WEC only gigaton.The oil density varies between 740 and 1030 kg/m3 (60°API to 6°API) andcould be expressed in barrel per ton. But what is published is disturbing.OPEC statistics give the conversion of barrel per ton and it is compared to theratio taken from the production reported both in barrel and ton.By country 1995 1996 1997 1998 1999 BP 1999Algeria 7.7741 7.7741 7.7741 7.9448 7.9448 8.7Indonesia 7.7600 7.7600 7.7600 7.2338 7.2338 7.7IR Iran 7.3145 7.3145 7.3145 7.2957 7.2840 7.4Iraq 7.4530 7.4530 7.4530 7.4127 7.4127 7.5Kuwait 7.2622 7.2460 7.2460 7.246 7.2580 7.4Libya 7.5876 7.5876 7.5876 7.5584 7.5584 7.6Nigeria 7.3540 7.3540 7.3540 7.4114 7.4114 7.4Qatar 7.6058 7.6058 7.6058 7.5898 7.6180 7.8Saudi Arabia 7.3229 7.3229 7.3229 7.2843 7.2845 7.6U A E 7.5964 7.5964 7.5964 7.5875 7.5532 8.2Venezuela 6.9337 6.9488 6.9580 7.3104 7.1210 7.1Average OPEC 7.3661 7.3671 7.3718 7.3677 7.3464OPEC values shows a false or virtual accuracy and political change (no changefollowed by sudden jumps) and BP values are quite different, as for exampleSaudi Arabia is not 7.3 b/t but 7.6 b/t, Algeria not 7.9 but 8.7, Indonesia not 7.2but 7.7.-1-2-2-UnitThe US is the only country in the world with Burma and Liberia to not use theInternational system of units (known as SI or metric system)-barrel: it is not an official unit for oil!-why 42 gallons? = The Weekly Register, an Oil City newspaper of late August1866. « We, all producers of crude petroleum on Oil creek, mutually agree andbind ourselves that from this date we will sell no crude by the barrel or package,but by the gallon only. An allowance of two gallons will be made on the gaugeof each and every 40 gallons in favour of the buyer. »The Petroleum Producers Association finally adopted the 42 gallon oil barrel in1872,by the Census Bureau in 1880 report and passed on in 1882 to the U.S.Geological Survey, U.S. Bureau of Mines and other agencies unto today.-1-2-3-abbreviations-Barrel: meaning of bbl?Barrel is written by many as bbl, but also bl, b, but bw for water, bc forcondensate, bo for oil and boe for oil equivalent. In all my papers, I write b, Mb(megabarrel) Gb (gigabarrel), as GboeI use also Gb/a where a is the SI symbol for year as « annum »


Most of oilmen use bbl without knowing what it means and why double b? Thefirst b is for blue but there is disagreement on the meaning of this colour:-colour of Standard of California to distinguish their barrels from othercompanies-to identify the right barrel of 42 gallons within the range of 30 to 50 gallonbarrels-to identify the crude oil in blue barrel when the refined product was in redbarrels (rbl)But this practice is more than a century old and there is not one wooden barrel inany museum. Why to keep this obsolete abbreviation and this obsolete barrelwhen claiming that modern technology rules the oil industry-Billion of cubic meter or cubic kilometer?-1-2-4-prefixthousand: US often M (but Y2K)million: US often MM (but 128 MB RAM), UK m or mn (unlawful)billion: US often B (but 10 GB hard disk memory)-1-2-5-equivalence: 1MWh=0.2 toe or 0.08 toe?The problem is that different energies can be compared as the necessary input(called primary energy) or as the resulting output (consumed energy). Heat canbe in some cases the goal, but in other cases a nuisance that you have to be ridof. As most of electric plants have an efficiency of about 40%, the electricenergy can be taken by some countries (and the WEC) as 1 MWh = 0.08 toe (tonoil equivalent) and by others (as France) as 1 MWh= 0.22 toe, as 1 toe = 42 GJand as 1 MWh= 3.6 GJ = 3.6/42= 0.08 toe, but to produce 1 MWh of electricity60 % of the oil energy is lost and 2.5 more oil or 0.08*2.5 =0.22 toe are needed.

-2-reports: what is published could be different from technical results!-2-1-political versus technical dataPublishing data (usually single number by item) on a country or a company is apolitical act as it depends upon their image the author wants to give. Thepublished data by Oil & Gas Journal (OGJ) is the basis of mainly other databaseas BP Review. The values come from an enquiry upon the national companiesand agencies, but as it is published one or two weeks before the end of the yearand the estimates are supposed to be for the end of the year, any serious nationalagency does not yet the result as they need few weeks or months to do properlythe work. It is why many countries do not replyOGJ Dec20, 1999 end 1999 change from 1998 change %

O Gb G Tcf O Gb G Tcf O G78 countries 659 4309 0 0 0 027 countries 357 836 -18,2 1,3 -4,9 0,2total 1016 5146 -18,2 1,3 -1,8 0,03OGJ Dec18, 2000 end 2000 change from 1999 change %

O Gb G Tcf O Gb G Tcf O G


81 countries 586 4025 0 0 0 024 countries 442 1253 12,4 133 2,9 11,9total 1028 5278 12,4 133 1,2 2,6For the last result as end of 2000, a large majority of countries (for oil 77% innumber and 57% in reserves) show no change: it is a joke! And OGJ does notcorrect these values later on, when World Oil (WO) waits six months to issue itsvalues and corrects it the following year.

There are two kinds of data: the political reserves (so called proved) reported byOGJ, WO, BP Review, API (American Petroleum Institute), OPEC and thetechnical reserves (mean values) existing only in confidential database for theworld.Figure 2: Political reserves on the rise, technical reserves on the decline

World's oil remaining reserves from political (API, BP,World Oil, Oil & Gas Journal, OPEC) & technical sources

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1950 1960 1970 1980 1990 2000 2010

year

API oil P currentBP Review oil P currentWO oil P currentOGJ oil P currentOPEC oil P currenttechnical data O+C 2P "backdated"

?

The swing producers, Saudi Arabia, Kuwait, Iran, Iraq, Abu Dhabi increasedtheir reserves as Venezuela by more than 300 Gb from 1985 and 1990 withoutany significant discoveries to justify those increases, but fighting for theirquotas.


Figure 3: Technical: Persian Gulf steady, rest of the world declining

World & Persian Gulf oil remaining reserves frompolitical (OPEC & OGJ) & technical sources

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1950 1960 1970 1980 1990 2000

year

technical data O+C 2"backdated"

OPEC oil P current

OGJ oil P current

Persian Gulf technicadata backdated

Persian Gulf OPEC

Persian Gulf OGJ

World-Persian Gulftechnical backdated

W-Persian OPEC

World-Persian GulfOGJ

-2-2-false accuracyany author giving more than 3 significant digits shows that he is incompetent inassessing accuracy and in probability.For proved remaining oil reserves at end of 1999Oil & Gas Journal 1 016 041.221 MbWorld Oil 978 868.2 MbBP Review 1 033.8 GbThe sum of the country proved reserves is not the world proved reserves.


Only the sum of country (or field) « mean » reserves represents the « mean »reserves of the world (or basin).

In summary, any conclusion based on the political data is unreliable andonly conclusions from the technical data have to be considered.

-3-Assessments-3-1-Creaming curves: cumulative discoveries in volume versuscumulative number of new field wildcats.Figure 4: Shell creaming curves: two cycles

Shell discoveries: creaming curve (ECSSR 2000)

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0 2000 4000 6000 8000

cumulative number of New Field Wildcats

1955

1998

1885

Creaming curves are an efficient way to assess the ultimate of a PetroleumSystem (defined by the source-rock which generates the oil concentrated in thefields) when combined interactively with a size-rank fractal display modelledwith a parabola (Laherrere 1996, 1999).Figure 5:


Africa oil+condensate: creaming curve

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0 5000 10000 15000 20000

cumulative number of new field wildcats

O+Ccum O Gbcum G Tcf/10cum C Gbmodelhyperbola U=215 Gb 1954hyperbola U=40 Gb 1995

The FSU reserves, which have been estimated with a Russian classification(presented by Khalimov in 1979 WPC), are now described by the sameKhalimov (1993) as grossly exaggerated. Figure 6:

FSU oil+condensate: creaming curves

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0 5000 10000 15000 20000 25000


O+C Gb

Oil Gb

Gas Tcf/10

Condensate Gb

model

hyperbola U=90Gb 1900hyperbola U=300Gb 1959hyperbola U=40Gb 1974

Khalimov's exageration ratio= to reduce by 30 to 45%?

Figure 7:


Europe oil+condensate: creaming curve

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0 5000 10000 15000 20000 25000 30000 35000 40000

cumulative number of new field wildcatrs

O+C Gb

cum O Gb

cum G Tcf/10

cum C Gb

model

hyperbola OilU=20 Gb 1900hyperbola OilU=105 Gb 1967

Figure 8:

Middle East oil+condensate: creaming curve

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0 1000 2000 3000 4000 5000 6000


O+C Gb

cum O Gb

cum G Tcf/10

cum C Gb

model

hyperbola U=850 Gb

hyperbola U=130 Gb 1974

North Field& South Pars 1971

Figure 9:


Latin America oil+condensate: creaming curve

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0 5000 10000 15000 20000 25000 30000 35000


O+C Gb

cum O Gb

cum G Tcf/10

cum C Gb

model

hyperbola U=175 Gb1900hyperbola U=45 Gb1977hyperbola U=65 Gb1986

Figure 10:

Creaming curve for oil+condensate by continent atend of 2000

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cumulative number of new field wildcats (NFW)

Middle East U = 820 GbFSU 3P U = 360x0.6 = 215 GbLatin America U = 270 GbAfrica U = 220 GbAsia U = 145 GbEurope U = 115 GbUS 48 U = 200 Gb

US 190 Gb for 326 000 NFW end

The ultimate of each continent for doubling the number of NFW.continent ultimate O+C Gb


Middle East 820Latin America 270US +Canada 250Africa 220FSU 215Asia 145Europe 115world 2000Figure 11:

Creaming curve for oil+condensate by continent in logscale at end of 2000 with ultimate for doubling NFW

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10 100 1 000 10 000 100 000 1 000 000

cumulative number of new field wildcats (NFW) - log scale

Middle East U = 820 Gb

FSU 3P U = 360x0.6 = 215 Gb

Latin America U = 270 Gb

Africa U = 220 GbAsia U = 145 Gb

Europe U = 115 Gb

US 48 U = 200 Gb

-3-2-Correlation annual discovery and annual production:Figure 13:


US (Lower 48 States): annual production and shifted by 30years annual discovery (Attanasi & Root AAPG March 94 &

DOE annual reports 1995-99) grown with MMS model (*4.5)

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5

1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030

production year

oil production

production crude oil only

discovery CD2000 = 190 Gb

trendline 4th degree

Figure 14: France: two clear cycles of discovery and production

France: annual oil production & annual discovery shiftedby 7 years

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1950 1960 1970 1980 1990 2000 2010

year of production

annual discovery CD=925 Mb

annual production CP=737 Mb

But the Russian classification corresponds to proven +probable+possible (or 3P)as quoted by Khalimov (1993). Figure 15:3P reduced to 2P


FSU: annual oil production & 3P discovery shifted by20 years and reduced by 45% to 2P

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1930 1940 1950 1960 1970 1980 1990 2000 2010 2020

year

annual productionCP 2000 = 140 GbCP 1987 = 100 Gb

annual discovery 3PCD = 316 Gb

annual discoveryreduced to 2P

trendline 4th degreereduced discovery

Figure 16: shown in WEC 2000 “Energy for tomorrow’s world –Acting Now

World outside the swing producers (Persian Gulf): annualproduction & annual discovery shifted by 25 years & reduced

by 15%

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1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030

production year

production

trendline discovery 4th degree

discovery shiftedby 25 years &reduced by 15%

-3-3-Parabolic fractal display:


One of the best displays is the fractal distribution of field size-rank in a log-logformat. When the distribution is natural as it is in a Petroleum System the fractaldisplays follow a curve (Laherrere 1996, 1999) (and not a straight line (or powerlaw) as claimed by Mandelbrot). This parabolic fractal is found for urbanagglomerations, earthquake (the Ritcher-Gutenberg, power law, is a roughapproximation), galaxies, species, . A fractal distribution corresponds to auto-similarity, quite frequent in nature, but as auto-similarity is not perfect, thefractal is not linear, but curved.Figure 17: evolution of the distribution towards the ultimate

Niger delta: oilfield size fractal display

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10000

1 10 100 1000

rank

up to 1959up to 1969up to 1979up to 1989up to 2000

-4-Examples of reserve & production data from countries-4-1-North Sea: UK & NorwayFigure 19: the reporting of remaining reserves in UK & NW is a mess!


UK & Norway: oil reserves from different sources

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1970 1975 1980 1985 1990 1995 2000

year

Norway UKO&GJ

WO

technical 2P

Looking at the status of the UK and Norway, the proven+probable values for oil+condensate and the number of oilfields are as follows:Status 2001 UK UK UK UK NW NW NW NW

O+C Gb nb % Gb % nb O+C Gb nb % Gb % nbdeveloped 31,7 276 89 52 26,3 64 83 33undeveloped 3,9 254 11 48 5,3 128 17 67Total 35,6 530 100 100 31,6 192 100 100Only 52% of the number of discoveries are developed in UK (89% of thereserves), and 33% in Norway (83% of the reserves).

Figure 20: UK has two cycles, when Norway has only one cycle


UK & Norway annual production & shifted annual discovery

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1970 1980 1990 2000 2010 2020

production year

UK discovery CD=36 Gbshifted 10 yearsUK production CP=20 Gb

NW discovery CD=32 Gbshifted 20 yearsNW production CP=14 Gb

Figure 21: the oil decline is constant except for 1987 & 1988 because gaslift

Forties oil decline

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cumulative production Mb

an prod before declinean prod since 1985ultimate Brown 2000ultimate decline

forecast 2001-2010Wood MacKenzie

5th platform & gasliftincrease productionfor 2 years but not ultimate

-4-2-Venezuela


Figure 23: erratic political reporting

Venezuela: oil remaining reserves from different source

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technical 2P backdatedOil & Gas JournalWorld OilOPEC

Figure 24: two cycles for conventional, quid unconventional?

Venezuela oil+condensate: annual production& annual discovery shifted by 10 years

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1930 1940 1950 1960 1970 1980 1990 2000 2010 2020

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discovery shifted by 10 yearsCD 2000 = 118 Gbproduction CP 2000 = 56 Gb

-4-3-Mexico


Figure 25: after the financial crisis was solved, reserves went down

Mexico: remaining oil reserves from different sources

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technical 2P backdatedOil & G&s JournalWorld Oil

Figure 26: Cantarell is a supergiant oilfield

Mexico: anual oil production & annual discoveryshifted by 5 years

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1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

year of production


production CP = 28 Gb

-4-4-Colombia


The last large discovery Cusiana was overestimated when discovered (pressrelease by Triton for the stock market 3 Gb when it was estimated 1.5 Gb by BPand 1 Gb by Total), the last scout is 0.95 Gb (but 1.6 Gb last year).Figure 30:

Colombia remaining oil reserves from differentsources

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technical 2P backdatedOGJWO

Cusiana Triton 3 Gb

Figure 31: several exploratory cycles

Colombia annual oil production & annual discoveryshifted by 5 years

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1930 1940 1950 1960 1970 1980 1990 2000 2010

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discovery CD2000 = 9,3 Gb

production CP2000 = 5,3 Gb

-4-5-NigeriaFigure 35: exploratory up and down because civil wars


Nigeria: oil remaining reserves from different sources

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35

1950 1960 1970 1980 1990 2000

year

technical 2P backdatedOil & Gas JournalWorld OilOPEC

Figure 36:

Nigeria: annual oil production & annual discoveryshifted by 10 years

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3,5

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4,5

1960 1970 1980 1990 2000 2010 2020

production year

discovery CD= 50 Gb

production CP = 21 Gb

-4-6-ChinaFigure 38: divergent political data


China: remaining oil reserves from different sources

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technical 2P backdated

Oil & Gas Journal

World Oil

Figure 39: Daqing is a supergiant oilfield

China: annual oil production & anuual discovery shiftedby 20 years

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3,5

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1960 1970 1980 1990 2000 2010 2020

production year

discovery shifted 20 years CD2000 = 54 Gb

production CP2000 = 27 Gb

-4-7-FSU


USSR Deputy Oil Minister Khalimow presented the Russian classification ofreserves at the 1979 WPC in Bucharest as a well-conceived approach. But in1993 (AAPG 77/9), Khalimow qualified this classification by stating: "Theresource base [of the former Soviet Union] appeared to be strongly exaggerateddue to inclusion of reserves and resources that are neither reliable nortechnologically nor economically viable". Gochenour (1997) found that theRussian reserves of five Russian companies (the two largest being Lukoil &Yukos), with total reserves of 49.4 Gb, are estimated with the US definition at26.4 Gb, which are only 53% of the Russian estimate.Figure 41: World Oil went to Russian classification and back to US practice

FSU remaining oil reserves from different sources

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OGJ

WO

Figure 43: Samotlor largest oilfield is overestimated by 8 Gb


Russia: Samotlor oil decline

0100200300400500600700800900

1000110012001300

0 4000 8000 12000 16000 20000 24000 28000cumulative production Mb

1964-19851986-1999U declineU scout

Figure 44: Romashkino, second largest is overestimated by 1.5 Gb

Russia: Romashkino oil decline

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cumulative production Mb

1949-1977

1978-1998U decline

U scout

-4-9-Angola


Figure 48: World Oil moves to 2P values

Angola remaining oil reserves from different sources

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1960 1970 1980 1990 2000

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Oil & Gas Journal

World Oil

Figure 49: several cycles and deepwater is the largest

Angola annual oil production & discovery shifted by 5 years

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-4-10-AlgeriaFigure 51: Russian influence in OGJ values around 1970


Algeria remaining oil reserves from differentsources

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technical oil+condensate2P backdatedOil & Gas Journal

World Oil

OPEC

Russian influence

Figure 52: last cycle with Berkine long time after first exploration

Algeria oil+condensate production and annual discoveryshifted by 10 years

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discovery CD2000 = 31 Gb shifted 10 years


-5-Reserve growthRecovery factor; mainly geology Figure 57:


Figure 59:

Percentage of cumulative oil discoveries versus oilrecovery factor

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oil recovery factor %

ME 734 reportedout of 754 GbCIS 50 Gb out of290 GbLatAm 208 Gbout of 221 GbAfrica 156 Gbout of 160 GbFar East 96 Gbout of 106 GbEurope 66 Gbout of 72 GbAustralAsia 7.2Gb of 7.6Gb

-5-3-Technology: impact on reserves: little on conventional,large on unconventional-Conventional: to produce cheaper and faster. Figure 65: GOM depletion


-Unconventional: technology progress is a « must » to increase the reserves.Orinoco heavy oils with cold production (no steam) with horizontal wells withpumps just above the reservoir.

Figure 69: small negative reserve growth to come for those 9 UK oilfields


UK main oilfields ultimate from the Brown Book inpercentage of the ultimate estimate from decline

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1975 1980 1985 1990 1995 2000

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BerylBrentClaymoreFortiesFulmarMagnusNinianPiperThistleaverage

Figure 71: large negative reserve growth is to come for all except Angola!

Evolution of average scout reserve estimate of majoroilfields versus the ultimate from decline by country

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1993 1995 1997 1999 2001 2003

year of estimate

CIS 54 giantsNigeria 14 giantsVenezuela 10 giantsColombia 17 majorsAlgeria 15 majorsAngola 12 majorsultimate from decline

-7-Ultimates


-7-1-Retired oil geologists groupOur ultimate estimate involves more than seven years of study by four retiredexploration geologists: Alain Perrodon, who was the first to introduce the termPetroleum System, Gerard Demaison, who quantified generation of a PetroleumSystem, Colin Campbell and myself.We are also in very close contact with two famous US retired geologists: WalterYoungquist (Geodestinies 1996) and Buzz Ivanhoe (Hubbert Centre at theColorado School of Mines).The four reports totalling 1250 pages from 1994 to 1998 are:-Laherrère, J.H. A.Perrodon, and G.Demaison 1994 " Undiscovered PetroleumPotential"; Petroconsultants Report 383p March-Laherrère J.H., A.Perrodon, and C.J.Campbell 1996 "The world's gas potential"Petroconsultants Report July, 200p, CD-ROM-C.J.Campbell C.J.& J Laherrère 1995."The world's oil supply -1930-2050",Petroconsultants Report 650p, CD-ROM-Perrodon A., J.H. Laherrère and C.J.Campbell 1998 "The world's non-conventional oil and gas"; Petroleum Economist March report 113pOur ultimate is as follows:

Perrodon et al 1998 mini mean maxiConventional oil 1 700 1 800 2 200Conventional gas liquids 200 250 400Non-conventional liquids 300 700 1 500Ultimate liquids Gb 2 300 2 750 4 000

Conventional gas 8 500 10 000 13 000Non-conventional gas 1 000 2 500 8 000Ultimate gas Tcf 10 000 12 500 20 000Our ultimate of 2000 Gb for oil +condensate estimated in 1998 is confirmed(+or- 10%) by the update with 2001 data of the creaming curve giving 1800 Gbfor the world outside US+Canada and with an ultimate for US+Canada of 250Gb.Figure 72:


World-(US+Canada) oil+condensate creaming curve,(ultimate for doubling NFW around 1800 Gb when FSU

reduced by 40%) & gas creaming curve

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0 25 000 50 000 75 000 100 000 125 000 150 000

cumulative number of new field wildcats (NFW)

W-USC O+C

W-USC model O+C

FSU reduced by 40%

model FSU reduced 40%

W-USC G Tcf/10

-7-2-Evolution of ultimates Figure 73:

World's conventional oil (& liquids) and gas Ultimates

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oil before 1960oil Tbgas Pcf/10

Odell growingwith time ??

USGS 2000


-7-3-USGS world assessment 2000-good by defining the geography of the Petroleum Systems with the help of theoil industry-assessment of undiscovered potential left to lonely academic USGS geologistsbecause confidentiality, with no access to well data and seismics, fairly old dataon reserves (1995 & 1996)-US assessment is still the 1995 study, but they apply to the rest of the world theUS practice of reserve growth when the definition of data is completelydifferent: P for US and Canada, 2P for the rest with 3P in FSU.-main assumptions filled up by one geologist on one sheet of paper givingnumber and size of undiscovered fields. The distribution of the unit is donethrough many pages of Monte Carlo simulation.There is much more computing than geology!The five largest undiscovered provinces are given as:Mesopotamian Foredeep Basin 61 GbWest Siberian Basin 55 GbEast Greenland Rift Basins 47 GbZagros Fold Belt 45 GbNiger Delta 40 GbMy comments on this report: « Is the USGS 2000 assessment reliable? » was inthe WEC Cyber oil conference of May 2000.

-7-4-others:Robertson Research International Ltd. (RRI)The world’s undiscovered liquids is about 440 Gb, compared to USGS 2000 of939 Gb, but RRI did not mention any reserve growth when USGS 2000 adds730 Gb, giving an addition of 1670 Gb for the next thirty. This is 50 Gb/a,which is implausibly more than three to four times what was discoveredannually over the last ten years.Robertson commented the USGS 2000 report as: << We are surprised at theUSGS outcome.<<Shell International:Ged Davis in the BBC “the Money programme” of Nov.8, 2000 « The last oilshock » estimates the undiscovered oil at 250-260 Gb, about one third of USGSestimate and not far from our estimate (200 Gb). He added that the improvedrecovery would add about the same volume.-8-Forecasts -8-1-Oil price forecasts: Figure 79:


World oil price forecast from USDOE/AEO 2001

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forecasted year

DRI 2000

IEA 1998

PEL 2000

PIRA 2000

WEFA 2000

GRI 2000

DBAB 2000

NRCan1997AEO2001high priceAEO2001low priceAEO2001reference

Figure 81:


If it will take a long time to check if the forecast in volume is right, it is easierfor forecasts on oil price. The consensus between official agencies is that in2002 the oil price will be quite lower than the goal of OPEC to get 25$/b.If oil price stays at 25$/b in 2002 it will show the failure of the official forecasts.It will not be a surprise as the last oil shock (27$/b in 2000) was not forecastedby any agency or any economist.The only people in 1998 to speak about « The end of cheap oil » was us(Scientific American March 1998) and Franco Bernabe, CEO ENI beforeretiring (« Cheap oil: enjoy it when it lasts » Forbes June 15, 1998) and MikeBowlin CEO ARCO after having sold his company to BP (« last days of the oilage » Feb.1999). Finally in mid 2000 John Browne CEO of BP announced thatBP now means « Beyond Petroleum ».

-9-Future production-9-1-Past forecast: Halbouty–Moody 1979:Figure 84: Halbouty now an “Optimist” was a “Pessimist” for 2000 in 1979!

Halbouty's 1979 forecast for world oil production &population

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Halbouty population.

population data

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prod. liquids data Gt/a

-9-2-USDOE long term forecastJohn Wood from the USDOE/EIA in his long term studyFigure 87: Wood gives our view to compensate for USGS estimate


Figure 88: with an ultimate of 3003 Gb his peak is around 2016

-9-3-IEA 1998 forecast « World Energy Prospects to 2020Figure 89:In 2020 unidentified unconventional oil is needed to fill the demand!


-9-4-My forecast Figure 90: the conventional ultimate of 2000 Gb and10 000 Tcf fits the present cumulative discovery & production

World: cumulative discovery and production of conventionaloil + condensate and natural gas with same logistic model

fitted to ultimate

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oil + cond.discovery *0,92oil + cond. prod.lag 38 yearsgas discovery

gas productionlag 43 years

-9-5-Comparison different forecastsFigure 92: the range of forecasts is large, mine is quite different


Oil & liquids (excl. processing gains) production fromUSDOE/EIA and forecasts (IEO/EIA, WEO/IEA,

OWEM/OPEC, EU/Bruxelles, Laherrere)

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World DOEliquidsWorld DOEoilIEO/EIA2001WEO/IEA2000OWEM/OPECEU 2000

Laherrere2000Non-OpecliquidsNon-OPECoilOPECliquidsOPEC oil

Jean Laherrere 2001

In Oil & Gas Journal April 30, 2001 A.M. Bakhtiari & F. Shahbudoghou(National Iranian Oil Co) “IEA, OPEC oil supply forecasts challenged” write“Obviously the IEA’s WEO and OPEC’s OWEM forecasts for 2010 and 2020are too optimistic, given the present status of global oil reserves and actualproduction capacities.”So the technician as us or from NIOC consider that the official forecasts areunlikely to be reached.

-9-6-Global forecast oil &gas conventional and unconventional


World liquids & gross gas future production fromultimates (conventional + non-conventional) 2750 Gb and

12 500 Tcf (Perrodon, Laherrere, Campbell 1998)

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past productionliquids

conventional oil

gas liquids

non-conventional oil

conventional + non-conventional liquids

past productiongross gas

conventional + non-conventional naturalgas 1 Gboe= 6Tcf

Jean Laherrere 2001

-9-7-Global forecast per capita Figure 94:

World: scenario population & oil(liquids)+gas(gross)production per capita with ultimate 2750 Gb liquids

& 12 500 Tcf natural gas

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population UN 1999low/medium fertility

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production oil+gas divided by 5

Jean Laherrere 2001

-10-Impact on climate change: IPCC scenarios


The assumptions of the IPCC 2000 are as follows, compared to the WorldEnergy Assessment (United Nations and World Energy Council)

IPCC 2000 Emission scenarios World Energy AssessmentA1FI A1B A1T A2 B1 B2 growth A growth B growth C

high middle ecologypopulation G1990 5,3 5,3 5,3 5,3 5,3 5,3 5,3 5,3 5,32020 7,6 7,5 7,6 8,2 7,6 7,62050 8,7 8,7 8,7 11,3 8,7 9,3 10,1 10,1 10,12100 7,1 7,1 7 15,1 7 10,4 11,7 11,7 11,7per capita per yearprimary energy GJ1990 65 65 65 65 65 65 72 72 722020 90 90 80 70 80 702050 160 150 140 90 90 90 103 83 602100 290 310 290 110 70 130 159 125 75GDP k$19901990 4 4 4 4 4 4 4 4 42020 7 7 8 5 7 72050 20 20 20 7 15 10 10 7 72100 75 75 80 15 50 20 26 17 19CO2 fossil fuels tC1990 1,1 1,1 1,1 1,1 1,1 1,1 1,1 1,1 1,12020 1,5 1,6 1,3 1,3 1,3 1,22050 2,7 1,8 1,4 1,5 1,3 1,2 1,2 1,0 0,52100 4,3 1,8 0,7 1,9 0,7 1,3 1,1 0,9 0,2CO2 concentration ppm1990 350 350 350 350 350 350 358 358 3582020 410 415 410 410 410 4052050 565 530 500 530 480 470 460-510 470 4602100 960 705 570 840 540 610 530-730 590 460

-10-3-primary energy for oil and for gasFigure 95 & 96:The 40 IPCC scenarios cover a large range but outside ours


IPCC scenarios (40) for oil & Laherrere

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Laherrere

IPCC scenarios (40) for gas and Laherrere

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Yale University model Rice 99 and WEA 2000: Figure 97:


Comparison forecasts Rice 99 & WEA2000carbon emission and our oil and gas production

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oil+gas EJ*0,32

Rice 99 emissionGtC/a *10WEA emissionGtC/a*10

Conclusions:-consuming society needs growth and only high energy price can changebehaviour of consumption and life


-goal of the oil companies is to make profit and not to publish data, keepingevery information confidential because competition-government agencies follow the policy of every government that promises thattomorrow will be better and counts on growth to solve all future problems.-future oil and gas demand is overestimated assuming cheap prices and largeresources.-three different and parallel worlds in the estimates of oil reserves.

-not “pessimists” and “optimists”, but-geologists free to speak when retired, with large experience and access to

confidential technical data,-« academic writers » who talk about future miracles from the technology

(but refuse to listen to technicians) and rely on published data which are mainlypolitical,

-“theoretical writers” who deal only with theories and wishful thinking,and reject facts as confusing.-oil industry follows archaic and poor practice in reporting data for productionor reserves because confidentiality, conservatism and fear of the impact on thestock market.-forecasts are as unreliable as the basic data. However data on past discoveriesand production shows that oil and gas liquids will peak before 2010 and thatnatural gas will peak around 2030.-IPCC assumptions on oil and gas up to 2100 are mainly unrealistic, based oncheap and abundant hydrocarbons.It is important as a matter of urgency that the oil industry and the governmentalagencies start to realise that the main priority now is to improve the worlddatabase.The ideal is to find an organisation, which is apolitical, that consumers, andproducers can trust. I do not see any organisation that complies with thenecessary qualities. IIASA could one possibility, but it has to show that it can doit.

iiasa-iew june 19, 2001 estimates of oil reserves jean ... · iiasa-iew june 19, 2001 estimates of...

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