Let us begin with the methodology with which we approach these questions.
Productive capacity is defined as the maximum sustainable level at which liquids can
be produced and delivered to market. Productive capacity estimates account for routine maintenance, but not for general operational inefficiency, temporary interruptions such as weather or labor strikes, nor for dramatic swings in political and economic factors. For example, a field may have a productive capacity of 140,000 barrels per day (bd) but in reality produce 130,000 bd on average over a year because of unforeseen maintenance issues, regulatory inspections, rig movements, and tie-ins.
At the core of IHS CERA’s methodology is recent production history, which is considered
the most reliable data available on which to base a supply projection. We can measure the barrels arriving at the surface over time. Future production trends are extrapolated using a comprehensive framework of decline rates and knowledge of operational plans for individual projects and fields. Remaining reserve data are an important constraint on the future supply profiles but—given the uncertainties in reserves estimation—can be used only as a broad guideline of future supply.
Four key components of supply are included in the outlook (see Figure 1):
¥ fields in production (FIP)
¥ fields under development (FUD)
¥ fields under appraisal (FUA)
¥ yet-to-find (YTF) resources
3111 3116 3121 3126 3131 3136 3141
IHS CERA has fully incorporated the data from the IHS International Field and Well Data database so that there are approximately 24,000 fields and discoveries underpinning the outlook. In addition, we have conducted detailed analysis of field production characteristics, especially decline rates, which have been incorporated at the field and project levels.*
A detailed database of approximately 450 OPEC and non-OPEC FUD provides a clear insight into the immediate plans of the industry to execute new projects ranging individually up
to 1.2 mbd at production plateau. YTF resources are estimated by extrapolating historical activity and success rate data and making assumptions about future levels of activity in key countries. We have recently compiled historical exploration data from the IHS International Field and Well Data database on well count, success rate, and discovery sizes for each country, which has improved the YTF analysis.
In this activity-based model we take account of project efficiency, costs, timing, hardware availability, and our detailed oil price outlook. We adopt a holistic portfolio perspective
to evaluate global productive capacity. Although it is clear that some giant fields such as Mexico’s Canterell are now strongly in decline following a successful secondary production program, and many countries are past their “peak,” the sum of the parts as we currently
see them show that global productive capacity should be able to grow for at least the next two decades.