Total’s Upstream Chief Says Peak Oil Is Around The Corner

For the past couple of years executives from French oil giant Total have espoused a belief that the world is pretty close to a peak in oil supply. Today in a speech at the CERAWeek energy conference in Houston, Yves-Louis Darricarrere, president of the company’s oil and gas exploration division, said, “We think it will be difficult to produce more than 95 to 97 million barrels per day in the foreseeable future.”

This volume of oil is not far away from the 91 million bpd or so expected by the International Energy Agency this year. Getting to 97 million bpd would entail supply growth of just 600,000 bpd a year for 12 years – that’s about what China’s demand growth has averaged in recent years.

Thus, says Darricarrere, oil’s share of the global energy supply will fall, with the slack to be picked up mostly by natural gas, which he says will increase in supply from 320 billion cubic feet now to 450 billion cf per day by 2030.

He admits that his view seems “paradoxical” when considering the amazing growth of supplies from shale fields; further, he says that the 95-97 million number excludes potential growth from biofuels and the manufacture of liquid fuels from coal. Still, he says, by 2030, “25 to 45 million bpd will need to be supplied from fields that are not online today.” That’s akin to the creation of two new Saudi Arabias.

Total’s view is unusual among big oil company execs. Even if they might agree with Total, oil execs are loathe to admit peak oil concerns publicly for fear that the countries that still hold large untapped resources (like Venezuela, Iran, and Russia — all places where Total has played) will extract higher rents from drillers who want in.

If Darricarrere  really does think that peaking oil will bring “structural support for higher oil prices,” then it seems odd that Total would invest in anything other than oil. Yet Total has also invested in solar in a belief that it will become economic in the years to come.

Forbes