World Oil & Gas Resources
Ken ChewOctober 2, 2008
42ND ANNUAL IPLOCA CONVENTION
Athens, Greece
2Copyright © 2007 IHS Inc. All Rights Reserved.
++
= 50%= 50%80
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World Liquids SupplyWorld Liquids Supply
World Annual Liquids Production 1960-2007(includes condensate, NGLs and oil sands)
0
5,000
10,000
15,000
20,000
25,000
30,000
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Mill
ion
Bar
rels
OPEC ProductionNon-OPEC Production
OPEC production includes Ecuador (1973-1992) and Gabon (1975-1994), and Angola (joined 2007); also includes OPEC NGLs
Kuwait Gulf War losses
13.6 million b/dOPEC production decline from 1979 and 11.3 million b/d shut-in capacity
4Copyright © 2007 IHS Inc. All Rights Reserved.
World Liquids SupplyWorld Liquids Supply
World Annual Liquids Production 1960-2007(includes condensate, NGLs and oil sands)
0
5,000
10,000
15,000
20,000
25,000
30,000
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Mill
ion
Bar
rels
0
25
50
75
100
125
150
175
200
US
Dol
lars
OPEC ProductionNon-OPEC ProductionOil Price in 2007 Dollars
OPEC production includes Ecuador (1973-1992) and Gabon (1975-1994), and Angola (joined 2007); also includes OPEC NGLs
Kuwait Gulf War losses
13.6 million b/dOPEC production decline from 1979 and 11.3 million b/d shut-in capacity
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Recoverable Conventional Liquids & Natural Gas ResourcesRecoverable Conventional Liquids & Natural Gas Resources
Discovery TrendsTotal Discovered Resources to End-2007 versus Number of Discoveries
0
100,000
200,000
300,000
400,000
500,000
600,000
Pre-19
0101
- 05
06 - 1
011
- 15
16 - 2
021
- 25
26 - 3
031
- 35
36 - 4
041
- 45
46 - 5
051
- 55
56 - 6
061
- 65
66 - 7
071
- 75
76 - 8
081
- 85
86 - 9
091
- 95
96 - 2
000
2001
-0520
06-07
Mill
ion
Bar
rels
Oil
Equi
vale
nt
0
500
1,000
1,500
2,000
2,500
3,000
Dis
cove
ries
in P
erio
d
Gas
Liquids
Number of Discoveries
Gachsaran
BurganGhawar
Ahwaz
Marun
Urengoy
North Field / South Pars
Astrakhan
Kashagan
(excludes USA and Canada)
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World Liquids ResourcesWorld Liquids Resources
The Key IssueAnnual Liquids Discovered versus Annual Liquids Production
0
20,000
40,000
60,000
80,000
100,000
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
Mill
ion
Bar
rels
Annual Recoverable Resource Additions5-Year Moving Average Annual Resource AdditionsAnnual Liquids Production
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Discovered & Remaining Recoverable World Liquids ResourcesDiscovered & Remaining Recoverable World Liquids Resources
Produced and Remaining Discovered Recoverable Conventional Liquids Resources at end-2007 (with percentage depletion)
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
North America Latin America Europe Former SovietUnion
Africa Middle East Asia-Pacific
Mill
ion
Bar
rels
Remaining Discovered Conventional Liquids @ 1 Jan 2008
Cumulative Conventional Liquids Production
31.6%
47.5%48.6%
83.9%
49.6%73.0% 58.9%
Worldwide Liquids Discovered: 2,370 billion bblWorldwide Cumulative Production: 1,130 billion bblWorldwide Remaining Liquids: 1,240 billion bblWorldwide Liquids Depletion: 47.6%
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Future Production
Discovered Resources
ResourceGrowth
Unconventional Resources
Yet-to-Find
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Negative• Some “stranded” accumulations will not be developed.
Positives
• North American estimates are 1P (“proved”) reserves, not 2P (“proved plus probable”) resources.
• Only “developed” resources of oil sands / extra-heavy oil are included.
• No allowance is made for resource growth.
• No allowance is made for “yet-to-find” discoveries made after 31 Dec 2007.
Remaining Recoverable World Liquids ResourcesRemaining Recoverable World Liquids Resources(Low(Low--end Estimate)end Estimate)
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Remaining Recoverable World Hydrocarbon ResourcesRemaining Recoverable World Hydrocarbon Resources
Resource Growth
Also known as “reserves growth” or “field growth”, this term describes the increase in recoverable resources that commonly occurs over time, as oil and gas fields are developed and produced.
Mechanisms• New-pool discoveries: increases in-place
• Improved technology: increases recovery
• Commodity price: increases investment in IOR and infill drilling
• Field micro-management: allocation of investment
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Discovery / Production Balance 2004 - 2007
World Recoverable Liquids ResourcesWorld Recoverable Liquids Resources
Recoverable Liquid Resource Additions, 2004 - 2007
-10
0
10
20
30
40
50
LiquidAdditions
2004
LiquidsProduction
2004
LiquidAdditions
2005
LiquidsProduction
2005
LiquidAdditions
2006
LiquidsProduction
2006
LiquidAdditions
2007
LiquidsProduction
2007
Bill
ion
Bar
rels
LiquidsResourceGrowth
LiquidsDiscovery
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World Recoverable Liquids ResourcesWorld Recoverable Liquids Resources
Reserves Growth in the Forties Field, UKForties Field (UK) Annual Oil Production
0
100,000
200,000
300,000
400,000
500,000
600,000
1975
1980
1985
1990
1995
2000
2005
Bar
rels
per
Day
Apache acquires BP interestand operatorship of Fortiesin April 2003
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World Recoverable Hydrocarbon ResourcesWorld Recoverable Hydrocarbon Resources
Undiscovered Hydrocarbons (“Yet-to-Find”)
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RecentlyRecently--discovered Recoverable Liquid Volumes discovered Recoverable Liquid Volumes vsvs YetYet--toto--FindFind
USGS Estimate of Undiscovered Liquids at 1 Jan 1996 versusRecoverable Liquids Discovered between 1st Jan 1996 and 31st Dec 2007
0
50,000
100,000
150,000
200,000
250,000
300,000
North America Latin America Europe Former SovietUnion
Africa Middle East Asia-Pacific
Mill
ion
Bar
rels
USGS Undiscovered Conventional Liquids Estimate @ 1/1/1996
Conventional Liquid Additions 1996-2007
Conventional Liquid Additions 1996-2007 with 25% Resource Growth
US estimateas of 2007
21.1%
10.5%
14.8%
43.8%
10.9% 57.2%
Worldwide Liquids Additions 1996-2007 (excluding North America): 20.8%
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Liquids Resource PlaysLiquids Resource Plays
Canada: Alberta Oil Sands - Geology
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Liquids Resource Play Types
Liquids Resource PlaysLiquids Resource Plays
• Bitumen in oil-sands (Alberta, Canada);
• Extra-heavy oil (Orinoco Belt, Venezuela);
• Fractured self-sourcing reservoirs (Bakken Shale, Williston Basin; Barnett Shale, Fort Worth Basin; Bazhenov Formation, West Siberia);
also shale oil (USA; Estonia; Brazil; China; Queensland) and liquids from coal (South Africa; China) but strictly speaking these are conversion technologies.
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World Recoverable Liquids ResourcesWorld Recoverable Liquids Resources(High(High--end Estimate)end Estimate)
Produced and Remaining Recoverable Liquids Resources at End-2007 (including resource growth, undeveloped oil sands / extra-heavy oil, and yet-to-find)
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
NorthAmerica
Latin America Europe FormerSoviet Union
Africa Middle East Asia-Pacific
Mill
ion
Bar
rels
Remaining Undeveloped Oil Sands and Orinoco with Resource GrowthUndiscovered Conventional Liquids (USGS) @ 1 Jan 2008 with Resource GrowthConventional Liquids Resource GrowthRemaining Discovered Conventional Liquids @ 1 Jan 2008Cumulative Conventional Liquids Production
32% depleted
(51% withoutoil sands) 19% depleted
(31% without Orinoco extra-heavy)
45% depleted
30% depleted
34% depleted
22% depleted
47% depleted
Worldwide Ultimate: 4,065 billion bbl(excl. oils sands/extra-heavy: 3,505 bill bbl)
Worldwide Remaining: 2,935 billion bbl(excl. oils sands/extra-heavy: 2,375 bill bbl)
Worldwide Depletion: 27.8%(excl. oils sands/extra-heavy: 32.2% )
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Ultimate Liquids ResourceUltimate Liquids Resource
Global Liquid Resources In-Place (billion bbl)
5,298
2,241
1,814
990
1,398
535
1,121
6
2Remaining Discovered Conventional
Produced Conventional
Undiscovered Conventional
Remaining Discovered Bitumen
Produced Bitumen
Undiscovered Bitumen
Remaining Discovered Extra-Heavy
Produced Extra-Heavy
Undiscovered Extra-Heavy
Source: IHS estimate based on various published sources
Total Discovered: 9,640 billion bblTotal Undisc / Inferred: 3,765 billion bblUltimate Resource: 13,405 billion bblTotal Produced (end-2007): 1,129 billion bbl
Bitumen
Extra-Heavy
Conventional
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World Natural Gas ResourcesWorld Natural Gas Resources
Annual Gas Discovered versus Annual Gas Production
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
Bill
ion
Cub
ic F
eet
Annual Resource Additions
5-Year Moving Average Annual Resource Additions
Annual Gas Production
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Discovered and Remaining Recoverable World Gas ResourcesDiscovered and Remaining Recoverable World Gas Resources(Low(Low--end Estimate)end Estimate)
Produced and Remaining Discovered Recoverable ConventionalNatural Gas Resources at end 2007 (with percentage depletion)
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
North America Latin America Europe Former SovietUnion
Africa Middle East Asia-Pacific
Bill
ion
Stan
dard
Cub
ic F
eet
Remaining Discovered Gas @ 1 Jan 2008Cumulative Gas Production
28.4%
81.7%
8.8%31.6%61.4%
27.6% 22.9%
Worldwide Gas Discovered: 10,350 tcfWorldwide Cumulative Production: 3,290 tcfWorldwide Remaining Gas: 7,060 tcf (1,175 bill boe)Worldwide Gas Depletion: 31.8%
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Discovery / Production Balance 2004 - 2007
World Recoverable Natural Gas ResourcesWorld Recoverable Natural Gas Resources
Recoverable Natural Gas Resource Additions, 2004 - 2007
-10
0
10
20
30
40
50
GasAdditions
2004
GasProduction
2004
GasAdditions
2005
GasProduction
2005
GasAdditions
2006
GasProduction
2006
GasAdditions
2007
GasProduction
2007
Bill
ion
Bar
rels
Oil
Equi
vale
nt
Gas ResourceDecline
GasDiscovery
GasResourceGrowth
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RecentlyRecently--discovered Recoverable Gas Volumes discovered Recoverable Gas Volumes versusversus YetYet--toto--FindFind
USGS Estimate of Undiscovered Gas at 1 Jan 1996 versusRecoverable Gas Discovered between 1st Jan 1996 and 31st Dec 2007
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
North America Latin America Europe Former SovietUnion
Africa Middle East Asia-Pacific
Bill
ion
Stan
dard
Cub
ic F
eet
USGS Undiscovered Gas Estimate @ 1/1/1996Gas Additions 1996-2007Gas Additions 1996-2007 with 12% Resource Growth
21.5% 12.6%
8.3%32.6%
13.2%
79.6%
Worldwide Gas Additions 1996-2007 (excludingNorth America): 20.3%
US estimateas of 2007
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Gas Resource PlaysGas Resource Plays
Source: Total
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Gas Resource Play Types
• Coal Bed Gas (“CBM”; “CSG”; Natural Gas from Coal)
• Anomalously-Pressured Basin-Centre Gas (also known as “deep gas” or “tight sand gas”)
• Tight Self-Sourcing Lithologies (shale; chalk)
and in the future
• Gas Hydrates (clathrates: methane trapped in lattice of ice)
Gas Resource PlaysGas Resource Plays
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World Recoverable Natural Gas ResourcesWorld Recoverable Natural Gas Resources(High(High--end Estimate)end Estimate)
Produced and Remaining Recoverable Natural Gas Resources at End-2007 (Including Reserves Growth and Conventional and Non-Conventional Yet-to-Find)
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
North America Latin America Europe Former SovietUnion
Africa Middle East Asia-Pacific
Bill
ion
Stan
dard
Cub
ic F
eet
Undiscovered / Undeveloped Non-Conventional GasUndiscovered Gas (USGS) @ 1 Jan 2008 with Resource GrowthGas Resource GrowthRemaining Discovered Gas @ 1 Jan 2008Cumulative Gas Production
33% depleted
18% depleted 34% depleted
16% depleted
19% depleted
6% depleted
13% depleted
Worldwide Ultimate: 18,480 tcf(excl. non-conventional: 16,070 tcf)
Worldwide Remaining: 15,190 tcf(excl. non-conventional: 12,780 tcf)
Worldwide Depletion: 17.8%(excl. non-conventional: 20.5%)
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Ultimate Recoverable Hydrocarbon ResourcesUltimate Recoverable Hydrocarbon Resources
SummaryEstimated Ultimate Recoverable World Liquid and Gas Resources
1,128548
1,177
296
1471,241
806
839
558
400
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Liquids Natural Gas
Bill
ion
Bar
rels
Oil
Equi
vale
nt
Estimated Remaining Recoverable UnconventionalYet-to-FindResource GrowthRemaining Discovered ConventionalCumulative Production @ End-2007
(Canada oil sand; Venezuela EH)
(excl hydrates)
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Remaining Recoverable World Hydrocarbon ResourcesRemaining Recoverable World Hydrocarbon Resources(High(High--end Estimates)end Estimates)
Positives• USGS World Petroleum Assessment 2000 does not
encompass all prospective petroleum provinces.
• IHS estimates of the gains from resource growth are considerably more conservative than those of the USGS.
Negatives• Undiscovered resources remain speculative until discovered.
• Unlikely that undiscovered potential can be found and developed within the time frame required to meet forecast demand growth through 2030.
The resources are there for the medium term The resources are there for the medium term --the issues are all about increasing production.the issues are all about increasing production.
Increasing project complexity Increasing project complexity –– in production in production andand transport:transport:deep water; Arctic; EH & oil sands; LNG; sour gas; tight gas.deep water; Arctic; EH & oil sands; LNG; sour gas; tight gas.
Investment requirement:Investment requirement:the ambivalent position of the major resource holders.the ambivalent position of the major resource holders.
The end of cheap oil creates its own cost spiral as theThe end of cheap oil creates its own cost spiral as theenergy component of production and transport grows.energy component of production and transport grows.
The ultimate cost could be to the planet –but what are the realisable alternatives?