Arctic Hydrocarbon Reserves in a Global Perspective

 

Pauli Jumppanen

In the Spirit of the Rovaniemi ProcessDecember 2-4, 2013

Rovaniemi, Finland

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ARCTIC HYDROCARBON RESOURCES(Source: USGS)

Crude oil 90 Bbl1 12.3 B toe3 13 %4 8.0 %5

Condensate 44 Bbl1 3.8 B toe

Natural gas 48 Tcm2 43.2 B toe 30 % 25.6 %

Total 59.3 B toe 22 % 14.7 %

1 Bilion barrels of oil/condensate2 Trillion cubic metres of gas3 Billion tons of oil equivalalent4 % of oil yet to be found5 % of existing conventional oil/gas reserves

Estimate for exploitable hydrocarbon reserves

Does world needs Arctic hydrocarbon reserves?

Are there alternatives to Arctic hydrocarbon development?

Bbl

Pauli Jumppanen2 – 4 . 12. 2013, Rovaniemi, Finland

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Used oil

Conventional oil

Non-coventional oil

Natural gas

Non-conventional gas

Coal

Gas hydrates

0 250 500 750 1000 1250 1500 1750 2000 2250 2500

Reserves

Resources

Geological

← 1000 - 16,000 Btoe

Fuel type Reserves Resources Total

Oil 53 +35 88

Natural gas 56 + 80 136

Coal 110 +60 170

Sufficiency of recoverable fossil fuels (years)

Billion tons of oil equivalent

WORLD POTENTIAL OF FOSSIL FUELS(Various sources)

Pauli Jumppanen2 – 4 . 12. 2013, Rovaniemi, Finland

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Fossil fuels Hydrocarbons

Oil Natural gas & coalgas

Coal Peat

Nuclear energy

Hydropower

Renewables Biomass & biofuels Wind power Solar energy Wave and tidal energy Geothermal energy

PRIMARY FUELS

33.4 %

29.8 %

23.8 %

4.9 %6.5 % 1.6 %

OilCoalGasNuclearHydroRenewable

World fuels’ production 2012 (Source: BP June 2013)

Pauli Jumppanen2 – 4 . 12. 2013, Rovaniemi, Finland

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SYNTHETIC FUELS

Raw materials Coal Natural gas & coalgas Shale gas & shale oil Oil sands & bitumes Biomass Other

Conversion processes Direct conversion

Pyrolysis Hydrogenation Plasma conversion

Indirect conversion Fisher-Tropsch (FT) Methanol to gasolin (MtG) Other

Synthetic gases Syngas Hydrogen

Synthetic liquid fuels Methanol Dimethyl ether (DME) Ethanol Gasolin Kerosene Diesel & biodiesel Fuel oils Other

Pauli Jumppanen2 – 4 . 12. 2013, Rovaniemi, Finland

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Vene

zuel

a

S-Ar

abia

Cana

da

Iran

Iraq

Kuw

ait

UAE

Russ

ia

Lib

ya

Nig

eria

USA

Kaza

khst

an

Qat

ar

Chin

a/Br

as.

Oth

er

0

50

100

150

200

250

300

350

WORLD PROVEN OIL RESERVES (Source: BP June 2013)

17,8 %

15.9

10,4 9,5 9.0

6,1 5,9 5,2

2,9 2,2 2.1 1,8 1,5 1.0

7.9

Billi

on (1

09 ) ba

rrel

s (B

bl)

Heavy oils (Orinoco Belt)

Oil sands

*Share of world reserves

Total oil 1669 BblR/P ratio 52,9 yrEU share 0.4 %

Pauli Jumppanen2 – 4 . 12. 2013, Rovaniemi, Finland

Oil company reserves (Ernst & Young 2012) ExxonMobil 12.3 Bbl (0.73 %*) R/P = 15 yr

BP 10.6 Bbl (0.64 %*) R/P = 14 yr Shell 6.1 Bbl (0,37 %*) R/P = 10 yr

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Iran

Russ

ia

Qat

ar

Turk

men

.

USA

S-Ar

abia

UAE

Vene

zuel

a

Nig

eria

Alge

ria

Aust

ralia

Chin

a

Indo

nesi

a

Nor

way

Oth

er

0

5

10

15

20

25

30

35

40Tr

illio

n (1

012) m

3 (T

cm)

18.0 %17,6

13.4

9.3

13,0

2.4 2.0 1.7 1.6 1.1

4.54.4

3.3 3.0 2.8

WORLD CONVENTIONAL NATURAL GAS RESERVES (Source: BP June 2013)

• R/P ratio 55.7 years• OECD share 10.0 % • EU share 0.9 %

Pauli Jumppanen2 – 4 . 12. 2013, Rovaniemi, Finland

World total reserves: 187.3 trillion m3

8

Chin

a

Arge

ntina

Alge

ria

USA

Cana

da

Mex

ico

Aust

alia

S. A

fric

a

Russ

ia

Liby

a

Braz

il

Pola

nd

Oth

er

0

5

10

15

20

25

30

35

WORLD SHALE GAS RESOURCES(Sources: EIA June 2013, ARI*)

Tr

illio

n (1

012) m

3 (Tcm

)

15.3 %

Technically recoverable shale gas resources: 206.8 trillion m3

11.0

9.79.2

7.8 7.4

6.05.3

3.9 3.5 3.32.9

14,732.9 TcmTechnology(Horizontal drilling & hydraulic fracturing)

Pauli Jumppanen2 – 4 . 12. 2013, Rovaniemi, Finland

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NATURAL GAS PRICES 1995 - 2012 (Sources: BAFA, ICIS, Natural Gas Week)

USD / million Btu(1 million Btu = 293 kWh ≈ 28 m3 natural gas)

Pauli Jumppanen2 – 4 . 12. 2013, Rovaniemi, Finland

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ALTERNATIVE OIL RESERVES RESOURCES(Various sources)

Proven

Arctic oil & ngl.

Other conventional

Shale oil

Extra heavy

Oil sand % bitumen

0200

400600

8001000

12001400

16001800

Billion (109) barrels

Technically and economically recoverable oil

- 53 v.

Pauli Jumppanen2 – 4 . 12. 2013, Rovaniemi, Finland

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ALTERNATIVE GAS RESERVES AND RESOURCES(Various sources)

Proven

Arctic gas

Other conventional

Shale gas

coal gas & gas sand

Gas hydrate

0 50 100 150 200 250 Trillion (1012) m3

- 56 v.

Pauli Jumppanen2 – 4 . 12. 2013, Rovaniemi, Finland

Technically and economically recoverable gas

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CONCLUSIONS

Pauli Jumppanen2 – 4 . 12. 2013, Rovaniemi, Finland

Out of Arctic hydrocarbon development, oil reserves are of major interest Due to significant, good quality conventional oil reserves Due to interest of some Arctic countries and big oil companies To decrease dependence on Middle East and Latin Americ’s oil production

Out of Arctic natural gas reserves, only rich condensate fields are of a short-term interest

Main alternative sources to Arctic hydrocarbons are: Non-conventional resources like shale oil & gas, heavy oils, oil & gas sands etc. Synthetic fuels production from shale gas, coal gas, biomass etc. Renewable sources like biofuels, wind, solar, geothermal etc.

Arctic reserves’ development will proceed slowly due to technology challenges, environment concerns and oil/gas price fluctuations

13Photo: Markku Lepola