Environmental Engineering Reference
In-Depth Information
Goodbye to easy oil
Reported global oil reserves have risen fairly steadily over the years.
But more recently this has been due to revisions made to estimates of
reserves already in production (or undergoing appraisal), rather than
actual new discoveries. Estimating reserves is almost more of an art than
a science. For there is no standardized international approach to the
categorization of reserves according to the certainty of their existence
and the profitability with which they can be extracted. Yet profitability
and commercial potential play a part in estimating reserves. So as the
oil price goes up, so do reserves. Enhanced oil recovery techniques also
enhance the commerciality of reserves.
The increase in reported reserves should not be read as any indication
that oil is getting easier to find. Far from it. The number of new discover-
ies is falling off in number and size. No new “elephant fields” have been
discovered in recent years.
Rates of oil recovery (the percentage of a total reserve that can be
extracted) and of oilfield decline (the pace of falling production) have
both increased. This is no surprise. The more you can suck out of an
oilfield, the faster it will normally decline. Moreover, production from
smaller oilfields tends to decline faster than from big ones.
Saudi Arabia's Ghawar field, discovered in 1948, is still by far the biggest
field ever discovered, and in 2007 was producing 5.1m barrels a day - or
seven percent of the world's conventional oil. In its 2008 annual survey,
the IEA surveyed 580 of the world's largest post-peak fields (i.e. fields
whose production had started their decline).
It found an average annual decline rate of 5.1 percent, ranging from 3.4
percent for super-giant fields to 10.4 percent a decline for the merely large
fields. The result of the oil industry's need to run faster just to stay still is
that decline rates have become more important in determining its invest-
ment needs than ups and downs in oil demand.
