Resources and future supply of oil

Journal article, 2009

This paper examines global oil resources and the future global oil supply/demand balance. The paper builds upon several comprehensive databases designed during the work and considerable efforts have been made to review what must be considered the most reliable data. Global oil resources have been investigated on three levels; country, company and field levels. Although no decisive conclusions or quantitative assessments can be made with respect to the global oil resource base, remaining resources appear to be sufficient to meet demand up to 2030 as projected in the 2006 (and 2007) world energy outlook by the IEA. Significant resources have already been discovered beyond proven reserves, many prospective regions remain to be fully explored and there are vast volumes of recoverable unconventional oil. However, it is also concluded that global supply of oil probably will continue to be tight, both in the medium term as well as in the long term mainly as a consequence of above-ground factors such as investment constraints, geopolitical tensions, limited access to reserves and mature super-giant fields. Production of unconventional oil and synthetic fuels is not believed to significantly alter this situation. Although an increasing number of recent reports have indicated an imminent or “soon to come” peak in global oil supply, it has not been found that any of these reports have contributed with any new information on oil resources or oil supply ability. Nevertheless, there is a distinct possibility that global oil production may peak or plateau in a relatively near future, not caused by limited resources but because too many factors over long time constrain investments into exploration and production. The lack of transparency within the oil industry obviously prevents any accurate analysis of future production and supply ability. Moreover, our ability to analyse the sector will become more difficult in the future as oil increasingly will have to be sourced from countries with a poor transparency. The world will become increasingly dependent on a few countries in the Middle East and on Russia not only for the supply of oil but also for the supply of gas which to a large extent will be utilised for power and heat generation. A responsible policy should under these circumstances seek to enhance energy security which should be directed towards promoting energy efficiency measures (reduce demand) in combination with increased utilisation of indigenous fuel resources such as renewables and fossil fuels in combination with CO2 capture and storage. Such a policy would both facilitate the transmission to a more sustainable energy system in the future as well as enhance energy security.