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Where do we look for oil?


In 2008, Canadian economist Jeff Rubin stunned the oil market with a bold prediction: With the world economy growing at 5% a year, oil demand would grow with it, outpacing supply, thus lifting the oil price from $147 to over $200 a barrel.

The former chief economist at CIBC World Markets was so convinced of his thesis, he wrote a book about it. “Why the World is About to Get a Whole Lot Smaller” forecast a sea change in the global economy, all driven by unsustainably high oil prices, where domestic manufacturing is reinvigorated at the expense of seaborne trade and people’s choices become driven by the ever-increasing prices of fossil fuels.

In the book, Rubin dedicates an entire chapter to the changing oil supply picture, with his main argument being that oil companies “have their hands between the cushions” looking for new oil, since all the easily recoverable oil is either gone or continues to be depleted – at the rate of around 6.7% a year (IEA figures). “Even if the depletion rate stops rising, we must find nearly 20 million barrels a day of new production over the next five years simply to keep global production at its current level,” Rubin wrote, adding that the new oil will match the same level of consumption in 2015, as five years earlier in 2010. In other words, new oil supplies can’t keep up with demand.

Of course, Rubin at the time was talking about conventional oil – land-based and undersea oil – as well as unconventional oil sands. The shale oil “revolution” in the United States that took off soon after the publication of his book has certainly changed the supply picture, and the recent collapse in oil prices has forced Rubin to eat his words. With U.S. shale oil production soaring from 600,000 barrels a day in 2008 to 3.5 million barrels a day in 2014, the United States over the past few years has flooded the market with new oil from its shale formations, including the Eagle Ford in South Texas and the Bakken in North Dakota. According to the Energy Information Administration (EIA), total U.S. production (conventional and unconventional) will increase to 9.3 million barrels a day this year, the most since 1972.

While some observers, including oil giant BP, are now predicting a slowdown in U.S. shale oil production as wells are depleted at a faster rate, to be replaced by Middle Eastern output that has lost ground to U.S. shale, the thesis posed by Jeff Rubin in 2008, that the world is running out of oil, seems to have changed to: Is the world swimming in oil?

In this continuing climate of abundant oil production, we sought to find out where the new oil will be found. The data could be used in a further analysis to determine whether an oversupplied market will continue to depress oil prices into the future – or whether a price correction is likely given a tightening of the market on the supply side.

According to a 2013 report by Wood Mackenzie, the world holds 1.4 trillion barrels of oil equivalent oil and gas reserves, with the Middle East, Latin America, North America and Africa identified as the key regions for future oil plays.

Of course, many of the new fields are uneconomic at current prices, so it is instructive to look at the largest oil fields to see where oil producers are likely to keep pumping, even though many of these fields are in decline.

They include Ghawar and Safaniya in Saudi Arabia, Burgan in Kuwait, and Rumalia and West Qurna-2 in Iraq. These five fields were named the most important by in an article last June. Ghawar, the world’s largest field, has an estimated 70 billion barrels of remaining reserves, more than all but seven other countries, according to the EIA. In production since the 1950s, it continues to produce at 5 million barrels a day.

If you noticed the dominance of the Middle East in this list, you’d be right.Current estimates have over 80% of the world’s proven oil reserves located in OPEC member countries, with Middle Eastern reserves comprising 65% of the OPEC total.

Adding to the list, Forbes named Majnoon in Iraq, Khuzestan (also the name of a province) in Iran, Kashagan in the Caspian Sea, Khurais in Saudi Arabia, the Tupi field offshore Brazil, Carabobo in Venezuela’s Orinoco heavy oil belt, and the North Slope of Alaska among its top 10 fields of the future.

Fortune places the Orinoco belt in Venezuela among its six largest untapped fields, at an eye-watering 513 billion barrels of recoverable crude. In comparison the Chicontapec Basin in Mexico, also on the list, is a Lilliputian at 10 billion barrels. Others include the Santos and Campos Basins in offshore Brazil, at 123 billion barrels, the Supergiant field in the southwest desert of Iraq, at between 45 and 100 billion barrels, and the Jubilee Field in Ghana, estimated to contain 1.8 billion barrels of recoverable crude.

The Canadian oil sands should of course also be included in the matrix of future oil supply. Despite the difficulty and higher-cost, compared to conventional sources, of stripping the bitumen from the oil sands and processing it into heavy oil, the vastness of the reserves contained in the sands of northern Alberta cannot be underestimated. According to the Alberta government the oil sands has proven reserves of about 168 billion barrels, the third largest proven crude oil reserve in the world, after Saudi Arabia and Venezuela. Canadian oil sands production is forecasted to grow from about 2 million barrels per day to 3.7 million barrels per day by 2020 and 5.2 million barrels per day by 2030, according to Alberta Energy.

Many have pointed to the Arctic as the answer to the depletion of existing oil and gas fields. The region, which crosses Russia, Alaska, Norway and Greenland, is estimated to hold 166 billion barrels of oil equivalent, more oil and gas than Iran and enough to meet the world’s entire consumption of crude oil for five years, reported The Daily Telegraph.

Drilling down a bit further, the US Geological Survey estimates that over 87% of the Arctic’s oil and gas resources are located in seven Arctic basin provinces: Arctic Alaska Basin, East Barents Basin, East Greenland Basin, West Greenland East Canada Basin, East Greenland Rift Basin, West Siberian Basin and the Yenisey-Khatang Basin.

The Prudhoe Bay field in Alaska, which has been pumping oil since 1977, is the largest oil field in North America, at about 25 billion barrels. Around 16% of the Arctic’s undiscovered oil and gas is located on land, with the remaining potential either locked in continental shelves or underwater at depths over 500 meters.

Of the seven basins outlined by the USGS, the most abundant is Arctic Alaska, at 29.36 billion barrels of crude oil, followed by the Amerasia Basin, at 9.72 billon, and the East Greenland Rift Basin at 8.90 billion, according to

Among the oil majors eyeing the Arctic prize, Shell has been drilling off the coast of Alaska for decades, Statoil is active in the Norwegian Arctic, and ExxonMobil is exploring with Russia’s Rosneft in the Russian far north. Last year Rosneft/ ExxonMobil discovered a field that could hold up to 730 million barrels of oil, but for the time being, exploration looks thin. With low oil prices, most oil companies are reining in capital costs, and exploration expenditures are a high-priority line item. Statoil and Chevron have both put their Arctic plans on ice, and the ExxonMobil partnership with Rosneft could be in trouble due to Western sanctions against Russia. Shell is currently the only company sinking any capital into the Arctic, with the Anglo-Dutch firm announcing at the end of January that it plans to proceed with a $1-billion Arctic drilling this summer.

And what of the shale oil reserves that have propelled the United States to becoming close to energy-independent and threaten to knock Saudi Arabia off its pedestal as the world’s top oil producer? In 2013, the EIA conducted the first-ever U.S. analysis of global shale oil reserves. It estimated “technically recoverable” (as opposed to economically recoverable) shale oil resources of 345 billion barrels in 42 countries, the equivalent of 10% of global crude oil supplies – and enough to cover over a decade of oil consumption.

According to the EIA, Russia and the United States have the largest shale oil resources, at a respective 75 billion barrels and 58 billion barrels, followed by China, Argentina and Libya. The other countries on the top 10 list of countries with technically recoverable shale include Australia, Venezuela, Mexico, Pakistan and Canada.

The EIA report also shows a marked increase in the number of prospective shale deposits globally compared to an earlier 2011 report. That report listed 32 countries with shale versus 41 in 2013, 48 basins versus 95, and half the number of formations, at 69 in 2011 versus 137 in 2013.

Resource Investor

22 Comments on "Where do we look for oil?"

  1. Plantagenet on Tue, 24th Feb 2015 7:16 pm 

    Interesting that the number of prospective shale oil basins around the world is increasing. Once the oil glut ends and the price of oil goes up no doubt we will see overseas shale oil projects become more and more important to global oil production.

  2. Davy on Tue, 24th Feb 2015 7:44 pm 

    Planter, overseas shale opportunities are not likely from our demand destruction induced oil glut or as Marco put it a GPO “Glut Peak Oil”

  3. Plantagenet on Tue, 24th Feb 2015 8:08 pm 

    Daver—I like that—Glut peak oil.

    Or maybe it should be Gluteus Peakeus Oileus.


    Daver, are you new to the peak oil idea? One of the basic ideas of Peak Oil Theory is that “we’re going to use it all”. Think about it—this is the OIL AGE. Our economy runs on OIL. its highly unlikely we’re going to leave any oil untouched—even expensive shale oil is gong to be drilled and fracked and pumped before the oil age is over.


  4. Davy on Tue, 24th Feb 2015 8:26 pm 

    Planter I subscribe to the Hills Group idea that most of the oil resource is going to remain in the ground because our economy will not be able to produce oil after a point. Planter are you new to the laws of thermodynamics? Econ 101 is not part of the Laws of thermodynamics.

  5. Steve Challis on Tue, 24th Feb 2015 8:35 pm 

    I normally enjoy your comments and look forward to them but your last one seems extremely pessimistic.
    ‘its highly unlikely we’re going to leave any oil untouched—even expensive shale oil is gong to be drilled and fracked and pumped before the oil age is over.’
    If this happens then logically huge amounts of gas and coal are going to be used as well and the world’s average temperature is likely to increase to levels well above any that humans have ever experienced, and higher than it has been since any large bodied mammals evolved.

  6. Mike989 on Tue, 24th Feb 2015 8:44 pm 

    Where do we look for oil? NOWHERE.

    GM has the Volt out now and the Bolt, a 200 mile EV in 2 years. Where do you look for power? On Your Own Roof.

    Solar panels projected to lower the cost of energy to 2 cent per kWh in 10 years.

  7. Mike989 on Tue, 24th Feb 2015 8:45 pm 

    I’m always shocked by the Total lack of knowledge of the Solar and Wind markets, and US investors. America has the dumbest investors in the world.

    You will lose your shirts, and the Solar and Wind market if you don’t wise up.

  8. Mike989 on Tue, 24th Feb 2015 8:50 pm 

    I guess it comes down to Republicans going to go Bankrupt. You’ve played the energy market like it was a game of politics, while the innovators are beating you over the head with a stick, and you don’t even know what’s going on.

    I guess this is how the Republican party dies, when you’re in bankruptcy you won’t be able to afford to Buy the US Political System, and then the Nation can GROW again under Democrats, like it always does.

    You’re still “predicting” Tesla going bankrupt, while they sold 35,000 cars for $100,000+ a piece. That’s the kind of “bankrupt” BMW wishes it could go into.

  9. Plantagenet on Tue, 24th Feb 2015 8:50 pm 

    Hi STEVE:

    Yes…you are quite right. Using all the oil and NG and coal is going to jack atmospheric CO2 right off the charts.

    Note that CO2 emissions to the atmosphere have ACCELERATED over the last 6 years. Note that the UN global climate treaty was deep-sixed after Obama insulted the Chinese at Copenhagen in 2010 when it supposed to be signed. Note that the bilateral agreement between China and Obama signed two months ago allows China UNLIMITED CO2 emissions.

    Look and weep. We are headed for higher CO2.

  10. Mike989 on Tue, 24th Feb 2015 8:52 pm 

    Plantag…. Did you get your Obama/China climate spin from that dumbass Limbaugh?

    Just wondering.

  11. Apneaman on Tue, 24th Feb 2015 9:11 pm 

    Alberta to bleed 31,800 jobs by end of year in oil price carnage

  12. Plantagenet on Tue, 24th Feb 2015 9:11 pm 

    Hi Mike

    No—the “Obama-China climate thing” comes from Greenpeace and

    But you go ahead and listen to dumbass Limbaugh all you want.


  13. Apneaman on Tue, 24th Feb 2015 9:32 pm 

    Mike989, do you know how many internal combustion engine vehicles need to be replaced? Do you know how much material that would take? Are you aware that almost all mining vehicles are diesel powered? Do you know how toxic it is to produce solar panels? Do you know green dreams are an illusion and will never be seen at any significant scale? None of that shit is possible without fossil fuels and toxic mining and manufacturing. The problem is overshoot and nothing we do will make a difference at this point. Not for the climate, not for the environment and not for the energy crunch. Nothing.

  14. keith on Tue, 24th Feb 2015 9:40 pm 

    What we need and what will get is a huge population crash. The evidence is all around us. The ones who can prepare are preparing, that includes the 1%. The last half of this century will see to it.

  15. tahoe1780 on Tue, 24th Feb 2015 11:49 pm 

    about those clean solar panels from China:

  16. theedrich on Wed, 25th Feb 2015 2:47 am 

    The world’s problem is not the amount of oil in subterranean existence;  it is oil’s affordability which, as Gail Tverberg and others have pointed out, depends on debt and therefore has an upper bound.  Compound this with the cocktail of Russian paranoia (Ukraine, Georgia, even the Baltics), medieval religious fanaticism (Allahland), and fiscal irresponsibility (Greece, among multitudinous others), and the future does not look rosy.  Yes, the Democrats will continue to play various demagogic cards (race, sympathy for illegals, demonization of Republicans, subtle appeals for neo-Communist egalitarianism, etc., etc.), but these are all ploys for more political power and have nothing to do with petroleic reality.

    When Colin Cambell and Jean Laherrère first resurrected Hubbert’s notion of Peak Oil in the 1990s, few paid any attention.  Today there is scarcely a synoptic financial or economic report anywhere that does not mention oil prices and their erratic levels.  With half the U.S. population receiving some form of government “benefits” and real unemployment somewhere between 14% and 23%, the regime is pulling out all the stops to cover up reality and maintain an appearance of BAU.  The current prez is held in place by a bizarre combo of leftist media, Hollywood with its stupidifying Oscar freak-shows, gargantuan swindlers in money markets and what Jonathan Gruber called American “stupidity.”  Add to this the laissez-faire attitude of the regime and its Justice Department under Eric Holder toward allowing marijuana (and, by extension, many other psychotropic drugs) to shrink the IQs of the rising generation, and you have all the elements of national suicide.

    This is not to say that the Republicans have all the answers, since some of them are receiving campaign contributions from the same hidden sources — some domestic, some Arabian — that the Dems get theirs from.  In short, there is no return to yesteryear.  The planet has failed.

  17. Davy on Wed, 25th Feb 2015 7:07 am 

    Thee, while I have a different approach to BAU I enjoy your comments.

    I read everyone here. I am humble in listening to all versions of reality because that shapes my idea of reality. Some here are delusional but I still want to know this delusional thinking because it is also reality. Reality contains people with delusional thought along with reality based individuals. Of course we all think our version is reality. Who knows I may be mentally ill and delusional. I think we all have our delusions along with some reality.

  18. Kenz300 on Wed, 25th Feb 2015 12:03 pm 

    The world is in transition away from fossil fuels……
    The fossil fuel industry hates that and are doing all they can to slow the transition. The top 1% want it all even if it destroys the planet……

    Pope Francis On Climate Change: Man Has ‘Slapped Nature In The Face’

    Pope Francis’s edict on climate change will anger deniers and US churches | World news | The Guardian

  19. theedrich on Wed, 25th Feb 2015 8:10 pm 

    Davy — There are many angles from which to view our situation.  Many choose to concentrate on racial differences (relying heavily on White guilt to make their point), others on wealth inequality (which is admittedly approaching imbalances matched only by ancient Rome), still others on global warming or pollution, on international warfare, on overpopulation, of course on Peak Oil, and so forth.  However the most important viewpoint of all is the macro perspective of planetary evolution.

    Some people reject such a perspective, preferring religious myths about our planet being supported by “turtles all the way down,” as an old Hindu woman allegedly asserted to a scientist who had just explained how the earth was supported by nothing, but was just floating in space.  Many people — perhaps most — reject man’s evolution from proto-chimp-hominid progenitors as just too insulting even to contemplate.  (I myself think that evolution is guided by morphic resonance as explained by scientist-philosopher Rupert Sheldrake.)  We know from current astrophysics that our present cosmos has been in existence 13.8 x 10^12 (billion) years, and our highly unlikely earth about 4.65 x 10^12 years.  Such durations exceed the ability of the human mind to grasp except with abstract numerical notations.  But it has taken all of that time, plus the unimaginable suffering of trillions of non-human life forms before us, to bring us to the current point.

    Today, however, in the blink of an evolutionary eye, we are bringing the entire enterprise of higher life and intelligence to a permanent halt.  Of course the average person — to say nothing of politicians — will deny the evidence for this termination.  Nonetheless, such evidence abounds on every side.  Accusations based on religious or political premisses are beside the point.  They are usually meant to favor one’s own ideology or enhance a political or physical advantage anyway.  The same is true of arguments based on “compassion” or one of the many other logical fallacies taught in logic courses.

    Our political systems favor proliferation of the evolutionarily least “fit” and the extinction of those most so.  One dare not even mention the issues of race or biology, precisely because they are based on evolution.  The entire complex of modernity, hence, rests on the rejection of this multi-billion-year fact.

    Thus we find ourselves in the situation of a man who refuses to admit that he has cancer and to go to the doctor to be healed.  The consequence of that behavior is obvious.

  20. theedrich on Wed, 25th Feb 2015 8:15 pm 

    Correction:&#160 10^9 years (billion, in U.S. terminology), not 10^12 (trillion).

  21. theedrich on Wed, 25th Feb 2015 8:15 pm 

    Correction:  10^9 years (billion, in U.S. terminology), not 10^12 (trillion).

  22. GregT on Wed, 25th Feb 2015 10:11 pm 


    There is a very good reason why we call it the “theory” of evolution. Science does not have all the answers, only some theoretical ones that we haven’t been able to disprove, yet. There are many disproven and accepted theories, as to time itself not being linear.

    How can you be so sure that you know all of the answers, when our scientists themselves are sure that we don’t? I find that kind of bizarre.

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