WHY SO MUCH VARIATION AMONG PUBLISHED OUTLOOKS?

The long and complex debate about the future of global oil supply is characterized by two overriding characteristics: the very large range of potential outcomes projected and sustained disagreement about “the answer.”**

Production volumes are closely related to reserves, rock physics, and investment. Publicly available data tend to be limited and of variable quality. A wide range of methodologies have been applied to the problem, from those encompassing systematic analysis and careful assumptions to less robust techniques such as Hubbert’s method, which can provide a good approximation in certain circumstances but fall down especially where government policy constrains production.*** Importantly, Hubbert’s approach, developed in the 1950s when technology was stagnating, also fails to account for fluctuations in demand, technology advances, and the discovery of new hydrocarbon plays. Additionally different studies

are based on variable views on reserves/resources, field production performance, future exploration, technology, and commercial issues. Few have attempted to incorporate the impact of aboveground factors such as demand and geopolitics.

Some models are based on a very pessimistic view of the future, which is not borne out by scrutiny of recent trends in exploration and production.

The recent discoveries of ten giant oil fields below a thick salt layer in the Santos Basin, Brazil, may have boosted global resources by at least 25 billion barrels. Further assertions that giant oil fields are past their prime simply are not borne out in a recent detailed study of 548 giant oil fields in the IHS CERA Private Report Giant Fields: Providing the Foundation for Oil Supply Now and in the Future? This study demonstrates these fields’ continuing strong contribution to global supply and that some 76 giant fields, representing

84 billion barrels, remain undeveloped. Fields in general and giant fields in particular still show considerable potential for reserves upgrades, as illustrated in many studies.**

Date: 2015-02-03; view: 1101