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Page added on June 27, 2019

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Global oil reserves data is muddled, but does it really matter?


Proved oil reserves, historically a proxy for geopolitical clout and energy security, may be losing their currency in a world set on ushering in the end of the fossil fuel era.

The growing acceptance of the climate threat from carbon-rich energy is focusing minds on producing cleaner fuels rather than stockpiling sources of old, dirty ones.

But despite growing industry qualms over peak demand and the potential for stranded assets, the issue of who controls the bulk of the world’s recoverable oil continues to pique interest.

Two reports this month gave diverging assessments of who rules the global oil reserves roost and highlights the disconnect between reported oil wealth and the ability to pump the barrels.

BP’s latest Statistical Review of World Energy, the touchstone energy data compendium in its 68th year, continues to support a view that there is no shortage of oil supplies to feed demand.

The world’s remaining proved reserves of 1.73 trillion barrels can cover 50 years of current production rates, BP estimates. That’s little changed from a decade ago and is 35% higher than in 1980, when the oil major began counting. Over the same period, oil production has surged by 50%.

Likewise, the rankings for the top resource holders have shifted little in recent years. Venezuela continues to hold on to the top spot, thanks to its questionable reserve estimates for its super-heavy Orinoco crude, with Saudi Arabia close behind and Iran a distant third.

Resource accounting

But not all reserves are created equal. The data masks large disparity in production costs for the economic recovery of the oil, and a divergence in reserve accounting standards.

According to BP’s review, Saudi Arabia’s proved oil reserves are now 11% higher than previously thought, at close to 300 billion barrels, after the world’s top oil exporter reclassified some of its gas reserves as oil.

BP’s estimate comes five months after state-oil giant Saudi Aramco opened up about its estimated reserves for the first time as part of a reserves audit ahead of a planned future listing of its shares.

A separate report by Norwegian consultancy Rystad Energy, however, takes a more rigorous approach to reserves by applying Society of Petroleum Engineers (SPE) standards.

“We don’t see increases in activity that would justify such a large upgrade [in Saudi Arabia], so this revision could be due to changes in reporting methodology,” said Rystad’s head of analysis Per Magnus Nysveen.

On a strictly SPE proven reserves basis, Saudi oil reserves stood at just 95 billion barrels last year, still well ahead of the US’ 32 billion barrels, Rystad believes. Canada’s massive but costly oil sands deposits suffer a similar fate under the tougher rules, shrinking to 24 billion barrels.

Top global oil resource holders - two diverging accountsClick to enlarge

Overall, Rystad estimates the world’s proven oil reserves on an SPE basis total only 386 billion barrels, about one-quarter of the officially reported figures in BP’s review.

Using a more a generous measure of recoverable oil based on contingent and prospective resources, however, yields widely different results. On that basis, Rystad pegs the US as holding 293 billion barrels of recoverable oil, 20 billion barrels more than Saudi Arabia and almost 100 billion barrels more than Russia.

Venezuela upended

On the flip side, running SPE proved reserves rules over Venezuela’s mostly hard-to-extract bituminous oil shrinks the country’s top ranking reserves to just 6 billion barrels, according to Rystad, a fraction of the claimed total 303-billion-barrel total.

That’s significant as Venezuela’s self-declared reserves in its giant Orinoco heavy oil belt have been the biggest single contributor to global reserves growth by far over the last decade.

From a complete absence in 2005, Venezuela’s heavy oil currently accounts for more than 260 billion barrels, or 15%, of BP’s global reserves total. By contrast, the US’ shale-led doubling of its oil reserves over the same period has added just 31 billion barrels to the global tally.

The discrepancy over the world’s economically recoverable oil also points to the growing realization by producers that the cost curve for resource development, rather than outright volumes, is now the battleground for growth.

Saudi Arabia has long claimed production costs of just $4/b at its easily accessible conventional oil fields mean Aramco is the most profitable oil producer in the world.

As the future oil demand growth window shrinks, it is the quality, not the quantity, of proved reserves that has become the new mantra for oil company executives.

The question of how much recoverable oil is left in the world and who controls it is increasingly being eclipsed by the transition from fossil fuels to renewable sources of energy. That still leaves major doubts over how much the remaining reserves will be worth in the future and how much may end up left in the ground.

SP Global

7 Comments on "Global oil reserves data is muddled, but does it really matter?"

  1. Cloggie on Thu, 27th Jun 2019 1:48 pm 

    “Global oil reserves data is muddled, but does it really matter?”

    It doesn’t.

    Under the North Sea alone, there are up to 23 trillion ton of coal waiting to be gasified (UCG). Of course we should leave it where it is and rapidly move into renewables. In the worst case you can imagine giant floating conventional power stations that burn UCG gas and redirect the resulting CO2 back under the sea floor.

    Humanity, throughout history, has burned ca. 0.15 trillion ton of oil.

    “We were wrong on peak oil. There’s enough to fry us all”

  2. Anonymous on Thu, 27th Jun 2019 5:39 pm 

    Rystad tries to do an apples to apples comparison and shows 1p, 2p, etc. variations. Better than how BP uses govt statements. Still a guess of course.

  3. print baby print on Fri, 28th Jun 2019 4:55 am 

    Cloggie cloggie , what about moon deposits of oil , and Mars you forgot to mention

  4. I AM THE MOB on Fri, 28th Jun 2019 6:54 pm 


    So true..Clogg is a nutter who has no life outside of this site..Nobody loves him so he turned into a filthy nazi..

  5. I AM THE MOB on Fri, 28th Jun 2019 6:55 pm 

    ‘Despicable act’: May confronts Putin over Salisbury poisoning

    Excellent false flag to discredit Putin on the world stage..


  6. Gaia on Sat, 29th Jun 2019 1:01 pm 

    Davy needs to be taught respect and boundaries. Just because people are different in their point of view doesn’t give Davy the right to insult others.

  7. Davy on Sat, 29th Jun 2019 1:59 pm 

    “Davy needs to be taught respect and boundaries. Just because people are different in their point of view doesn’t give Davy the right to insult others.”

    gaia, you need to make sense. Your comments are really dumb. You say things that are obvious and you say them in a condescending way as if you are righteous. You and juanpee belong together. get a room or something. juanpee has dirtied this forum with identity theft and mindless socks and you approve of that. what a fuck nut.

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