Global Energy Review

Non-OPEC: Crude Oil and NGL Production Capacity to 2015

A Report by Dr Paul McDonald
Consulting Editor, Oil and Energy Trends

Contents

List of Tables

Introduction

Non-OPEC countries produced some 48 mn bpd of the world's 82 mn bpd output of crude oil and NGL in 2005, giving them a market share of 59%.

This proportion has been little changed since the 1980s, apart from a short period in the mid-1980s when there was a surge in production from a number of non-OPEC producers such as Great Britain, Norway and parts of Africa.

The reverse situation prevails when it comes to reserves. Here, OPEC has by far the majority of the world's reported proven reserves. According to the Oil & Gas Journal's annual survey, OPEC had some 70% of the world oil reserves at the start of 2006, compared to non-OPEC's 30%.

The paradox is explainable by OPEC's policy of trying to control world oil prices by controlling production. Since April 1982, OPEC has had a system of quotas designed to support prices at various levels. Although the quota system has not always been rigidly observed, it has had the effect over the long term of restricting OPEC's production whilst that of most other countries has gone on rising, free of any such constraints.

A few non-OPEC countries have from time to time restrained their output in support of prices at times when markets have been particularly low, but this has had little effect over the long term. OPEC's role since 1982 has thus been that of the marginal or 'swing' supplier. Non-OPEC countries meanwhile have tended to produce at or close to their full capacity, thereby providing the base-load of world supply.

This state of affairs is beginning to change. Most non-OPEC producers are either past their peak or very close to it. Recent gains in output have come from a small number of countries, notably Russia. Within a few years, these gains will not be sufficient to offset the decline occurring elsewhere amongst the non-OPEC producers. At that stage, any net growth in the world's production will have to come from a small number of countries belonging to OPEC.

This net decline in production outside OPEC is not far distant. Non-OPEC output is likely to reach its long term peak between 2008 and 2010. With luck, non-OPEC should be able to maintain a plateau level for a few years more; but these seems little doubt that it will have started to fall before 2015.

GER LINKS:

For details of OPEC's reserves, production and prospects to 2015, see:
'OPEC: Crude Oil Production Capacity to 2015' '

see also:
'Central Asia & the Trans-Caucasus'
'Russia: How much Oil and Gas?'

Hyper-links:

OET ARCHIVE:

'Energy security rises to top of agenda in 2006', Focus Jan06
'US looks north (and south) as gas starts to run out', Focus Aug04

Principal Non-OPEC Producers

This report is primarily concerned with those non-OPEC countries where production is still rising. In most cases, there is not much more potential for growth. Only a few mostly the former Soviet Union and Angola have much prospect of large gains in volume. Output figures refer throughout to crude and NGL.

Countries where Output is in Decline

Some 18.3 mn bpd of non-OPEC production, amounting to 38% of the total, comes from countries where output is in decline. These countries include several important producers such as the US, Great Britain and Norway.

United States

The US had shown signs of having slowed down its rate of decline with the development of several important new fields in the Gulf of Mexico, but output there was badly hit by hurricanes in the late Summer of 2005, and production is still not back to pre-hurricane levels. The last of the major hurricanes, Rita, which arrived in September, caused some 1.7 mn bpd of production to be shut-in. In May 2006, around 0.2 mn bpd was reported to be still off-line.

North Sea

Output from the British sector of the North Sea peaked in 1999 at just under 2.9 mn bpd, while Norway's peak year was in 2001, with 3.4 mn bpd. The decline in British production shows signs of slowing down thanks to a burst of new investment since 2004. Norway's shows signs of beginning to accelerate, though it is difficult to quantify the current rate as output levels for the first half of 2006 have been depressed by higher than normal levels of maintenance.

Other Producers in Decline

There are several other producers in decline, including some of the world's earliest producers, like Romania and Bahrain.

The most important countries with output now in long term decline are:

Table 1
Non-OPEC: Producers by Category, 2005
Category Production Share of Total
(mn bpd) (%)
In Decline 18.3 38
Decline arrested 1.0 2
Close to Peak 10.7 22
Still growing 18.3 38
Total 48.2 100
Totals rounded
Source: Pearl Oil estimate

Countries that have arrested their decline

Amongst the countries in long term decline is a handful that appears to have arrested the decline for the time-being. One important reason appears to be an improvement in upstream contract terms that has encouraged private investors back to the country. The countries concerned are:

Another country that could be included in this category is Russia, though it could also be considered as a country where output has begun to rise again (see below). The other three countries appear to have effected only a short term interruption to a long term decline.

Australia

Australian output reached its all-time peak in 2000, at 0.8 mn bpd, before falling to below 0.5 mn bpd in 2005. A revival in exploration in recent years has recently begun to pay-off in terms of production, which is expected to reach just under 0.6 mn bpd this year, thanks especially to new production from the Carnarvon Basin, off Western Australia.

This minor recovery is unlikely to last much beyond 2006, and Australian production will probably have resumed its long term decline pattern before 2010. Most of the upstream activity over the next decade is likely to involve gas rather than oil. This could turn up some additional liquids in the form of condensate and other NGLs, but Australia's total output of liquids looks like being somewhere in the region of 0.4 mn bpd by 2015.

Congo-Brazzaville

Congo-Brazzaville's production peaked at 0.3 mn bpd in 2000, and is now near 0.2 mn bpd, but new finds at Moho-Bilondo and M'Boundi are likely to offset part of the decline in the country's mature fields. Some 150,000 bpd of new production is scheduled to be on-stream by 2008, which could help to ensure that Congo-Brazzaville is still producing around 0.2 mn bpd in 2015.

Peru

Peru's production has declined from 0.2 mn bpd in the early 1980s to 0.1 mn bpd now, where it appears to have temporarily stabilized, and even increased slightly, thanks to recent outside investments. These are now being out at risk by a change of political direction inside the country putting more stress on state control. Output looks like resuming its downward path within a year or two and could well be around 50,000 bpd by 2015.

Trinidad & Tobago

Output in Trinidad & Tobago peaked at just over 0.2 mn bpd in 1978. Last year saw a 10,000 bpd increase to 160,000 bpd, with every sign that the recovery has been continued into 2006. The new output is coming from the Angostura field, which is expected to produce 80,000 bpd at maximum, bringing Trinidad & Tobago back towards 0.2 mn bpd. Much of the country's exploration effort, however, is going into gas rather than oil, and output of the latter will probably be back around 0.1 mn bpd by 2015.

Countries close to their Peak

Several important non-OPEC countries are still increasing their output, but about half of their number are almost certainly within a few years of their peak output. Countries in this latter category include:

Bolivia

With an output of 50,000 bpd, Bolivia is hardly a major oil producer. There is considerable interest in gas, but the country's increasingly nationalist stand in relation to foreign investment makes it unlikely that Bolivia will attract much more oil exploration from outside. It is unlikely ever to produce more than 0.1 mn bpd and output in 2015 could be slightly lower than it is at present.

China

China's two main oilfields, Daqing and Shengli, are in long term decline, as are several other older onshore fields. Their replacements are much smaller and it is no clear how much longer the Chinese can go on finding relatively large numbers of small fields to offset the decline of their two largest ones. The country's two most prospective areas, the continental shelf and the Xinjiang-Uighur Autonomous Region in the north-west of the country, have failed to live up to expectations that they would contain large new oil deposits. It therefore seems unlikely that Chinese production will grow by much more.

This year, it may put on an extra 0.1 mn bpd, taking it to 3.7 mn bpd. There could be scope for further growth of up to 0.5 mn bpd of production by about 2010, but long term decline seems likely thereafter, leaving it with production levels close to those of the present day by 2015.

Ecuador

Ecuador's production has grown strongly: from 0.4 mn bpd in 2000 to nearly 0.6 mn bpd in 2005. This year it could grow by a further 50,000 bpd. Over 60% of Ecuador's production is accounted for by foreign firms. Like some other Latin American countries, Ecuador wants to renegotiate its upstream terms to improve the returns to the state. This may inhibit further exploration. Ecuador's prospectivity may nevertheless be sufficient to allow production to rise to somewhere in the region of 0.7 mn bpd by about the end of the decade, declining shortly afterwards to 0.5 mn bpd by 2015.

India

India's output suffered in 2005 as a result of a fire at the 265,000 bpd Bombay High field the country's largest in July. The expected growth of 50,000 bpd in 2006 partly reflects the fact that Indian output was depressed in 2005 by the Bombay High fire.

There has been a good deal of offshore activity in recent years and efforts have been made to revive production at the country's older fields. Output might increase from the current level of 0.8 mn bpd to somewhere near 1.0 mn bpd, but there appears to be little prospect of major new finds. Indian production is likely to be in decline by 2015, with output of about 0.8 mn bpd.

Malaysia

A number of new exploration agreements have been signed since 2004 and additions to reserves have been reported. There is also increasing interest in deepwater acreage. Nonetheless, Malaysia's output is nearing its peak in the absence of any large new discoveries. The national oil company, Petronas, will probably keep production around 1.0 mn bpd for as long as possible rather than seek to raise it to a higher and shorter-lasting peak level. Output in 2015 is likely to be close to 2005's level of 0.9 mn bpd.

Mexico

Mexico is unlikely to be able to raise its output much above 2005's level of 3.8 mn bpd thanks to a decline in its 2.0 mn bpd Cantarell field, which is expected to be producing only 1.4 mn bpd by 2008. The main problem, however, is the failure of state oil company Pemex to replace its reserves. In 2006, Pemex reported that proven oil reserves had fallen by 1.0 bn bbl to 11.8 bn bbl between 2004 and 2005. Output is unlikely to exceed 4.0 mn bpd over the next decade and could be around 3.5 mn bpd by 2015.

Sudan

Sudan's oil production could be constrained by the high level of violence in the country which has already affected the main production areas in the south. Plans for expansion have also been delayed by disputes over exploration rights. The commissioning of fields in the Melut Basin should raise output from 0.3 mn bpd to more than 0.5 mn bpd by the end of 2006. Further developments in Melut could help to raise national output to 0.8 mn bpd, but several previous production forecasts have proved over-optimistic. Output in 2015 may be somewhere in the region of 0.6 mn bpd, but only if the south of the country can be pacified; otherwise output may peak around 0.5 mn bpd between 2010 and 2015.

Thailand

Thailand's output has been growing, but small reserves and the lack of large new finds are likely to bring such growth to a halt within a short time. By 2015, output should be in long term decline, at about 0.2 mn bpd.

Vietnam

Vietnam has largely failed to live up to its original promise. Reserves are modest and new discoveries have tended to be small. More small fields may be discovered, but the main finds in future are more likely to be gas. Output is unlikely to go above 0.5 mn bpd and should be in decline by 2015 at around 0.3 mbd.

Countries where Output is still growing

A number of countries appear to have the potential to produce significantly more oil by 2010 and, in some cases, by 2015. They are:

Some of these are small, new producers. The main gains in volume terms are likely to come from Angola, Azerbaijan, Kazakhstan and Russia.

Angola

Angola's output has already increased since 2005, when it produced just over 1.3 mn bpd. The field developments currently under way should more than offset the expected decline from Cabinda, Palanca, Quito and Xikomba. Among the planned developments are Dalia, Blocks 18 & 31, Pazflor and a possible ultra-deepwater development by Total in Block 32. Oil production should go on rising to 2010, when it should be near 2.5 mn bpd. Thereafter there could be a dip in output as the number of new field developments falls. By 2015, however, output could be in the region of 2.4 mn bpd, assuming Block 32 is by then in operation.

Azerbaijan

Azeri production has risen steadily since the early 1990s and is now over 0.5 mn bpd. Most of Azerbaijan's prospects are centred on the Azeri-Chirag-Guneshli (ACG) development, operated by BP, which began operations in 1997 and is being developed in stages. Phase III is expected to take Azeri crude oil production to 1.0 mn bpd by 2009, which could well represent a peak. Gas liquids from the Shah Deniz field could help to raise total output to 1.2 mn bpd. There appear to be no large developments scheduled after ACG is on-stream and Azerbaijan's production may well be starting to decline by 2015, at somewhere near 1.1 mn bpd.

Brazil

Brazil's production has more than doubled in the last decade in spite of what appear to be modest reserves. The continental shelf is especially prospective, but several important developments lie in deepwater and ultra-deepwater areas. Some of the oil is also very heavy. State oil company Petrobras hopes to see national production at 2.4 mn bpd by 2010: a rise of 0.4 mn bpd over 2005. There appears to be little scope for any increase beyond that date without major new developments offshore. In the meantime, several important fields are in decline. Output in 2015 might be around 2.2 mn bpd. As with some other Latin American producers, Brazil's progress will be determined to an important extent by the degree with which it continues to attract foreign investment. Several countries there are adopting more nationalistic policies towards foreign companies.

Canada

Canadian production is rising thanks largely to the development of its large reserves of tar sands in Alberta, which is more than replacing the decline of older fields of light crude. Production from all sources looks set to rise from 2005's level of 3.1 mn bpd to more than 3.5 mn bpd in 2010. With continuing tar sands developments, Canada could still be producing about 3.5 mn bpd by 2015.

Chad

Chad's once-promising future is now under something of a cloud following a dispute with the World Bank and an Exxon-Mobil-led consortium on the terms for developing its Doba oilfields. There is a further threat to production from the spread of violence and civil unrest from neighbouring Sudan. The dispute with the World Bank has led to the freezing of an account administered by the Bank handling some of the country's oil revenues. The Chadian government has threatened to shut-in production if the dispute is not resolved. In the present uncertainty, it is difficult to see how production can rise much above 0.2 mn bpd in the foreseeable future, despite the potential for a modest rise in output over the coming decade.

Equatorial Guinea

Equatorial Guinea has promising offshore acreage and production has risen from less than 20,000 bpd in 1996 to 360,000 bpd in 2005. Increasing condensate production could ad a further 60,000 bpd this year, but the country appears to be more gas-prone than oil-rich. Oil production is unlikely to exceed 0.5 mn bpd and will probably be in decline by 2015 unless a further large discovery is made, though with further small discoveries it could be in the region of 0.3 mn bpd.

Ivory Coast

With output of 45,000 bpd in 2005, Ivory Coast is a minor producer. Its reserves are also correspondingly small. Rising production from the Baobab field could help to push output above 60,000 bpd in 2006. Peak production looks likely to be around 0.1 mn bpd and output could well be in decline by 2015 and back below 45,000 bpd.

Kazakhstan

Output of 1.2 mn bpd makes Kazakhstan the most important producer of the Transcaucasus/Central Asia region. There are several prospects that could increase this total considerably. The principal of these are the Karachaganak and Kashagan fields. Karachaganak is primarily a condensate deposit with operators BG and ENI plan to boost from 350,000 bpd to 1 mn bpd over the next ten years. Kashagan is often described as the largest oil development in the world and is designed to produce some 1.2 mn bpd by 2016. The development of the field, which lies in the northern Caspian, involves a formidable range of technical and environmental challenges. The crude is also high in sulphur. The field was due on-stream in 2005, but first oil is not now expected until late 2008. As a result, the Kazakhs will probably not meet their target of 3.6 mn bpd in 2015. If these two large fields are developed as now planned, Kazakhstan could be producing up to 3.2 mn bpd in 2015, which would still give it the largest volume gain of any non-OPEC country over the coming decade.

Mauritania

Mauritania became Africa's newest producer in the first quarter of 2006 with the commissioning of the onshore Chinguetti field. Output was supposed to be in the region of 75,000 bpd but was reported at only 45,000 bpd in May 2006. Output is supposed to reach 100,000 bpd in late 2007, and there are plans to explore other areas apart from Chinguetti, including the offshore sector, which contains some promising ultra-deepwater acreage. Reserve levels are expected to rise, as is production, perhaps reaching 0.3 mn bpd by 2015.

Russia

Russia has reversed a decline in production that began after 1987, putting in strong growth in recent years. Output peaked in 1987, at 11.5 mn bpd then fell sharply, reaching 6.1 mn bpd in 1996. By 2000, it had recovered slightly, to 6.5 mn bpd, but since then, it has risen strongly, reaching 9.5 mn bpd in 2005. There has been much talk of large unexplored areas in Russia containing large, undiscovered reserves. This is unlikely to be the case. Russia was well-explored under the Soviet regime, though some areas were left undeveloped, notably in the Pacific Ocean, off Sakhalin and in parts of the Caspian, since the USSR then lacked the expertise to develop offshore fields (see also Kazakhstan). Much of the increase in Russian production has come from Sakhalin and the drilling of deeper horizons in existing Central Siberian fields. There may be more to be gained from this re-working of existing areas, plus some more from offshore, but Russia is unlikely to exceed its 1987 peak. Output in 2015 looks like being in the region of 10.5 mn bpd.

Table 2
Non-OPEC Production, 2005
Country/Region Production
mn bpd
Countries in Decline
US 7.3
Great Britain 1.8
Norway 3.0
Others 6.2
Total 18.3
Countries that have arrested Decline
Australia 0.5
Congo-Brazzaville 0.2
Peru 0.1
Trinidad & Tobago 0.2
Total 1.0
Countries close to Peak
Bolivia 0.1
China 3.6
Ecuador 0.6
India 0.8
Malaysia 0.9
Mexico 3.8
Sudan 0.3
Thailand 0.3
Vietnam 0.4
Total 10.7
Countries where Output is growing
Angola 1.3
Azerbaijan 0.5
Brazil 2.0
Canada 3.1
Chad 0.2
Equatorial Guinea 0.4
Ivory Coast *
Kazakhstan 1.2
Mauritania *
Russia 9.5
Total 18.3
Total Non-OPEC 48.2
Totals rounded
* < 50,000 bpd
Source: Pearl Oil

The Reserves Base

There is less contention over non-OPEC reserve levels than is the case with OPEC. There is nevertheless no standard measure of 'proven reserves'. The Oil & Gas Journal's annual survey is widely used in the oil industry, but there are disagreements over proven reserve levels in a number of countries, as Table 3 shows.

The disagreements become greater when discussing 'probable' and 'possible' reserves. The most optimistic surveys suggest that these two categories together could at least equal the present level of 'proven' reserves and might even be more than twice that level. The situation becomes even more controversial when it comes to dealing with non-commercial crudes (see below).

At the other end of the scale are the deep pessimists, who maintain that 'proven' reserves have been exaggerated sometimes considerably and that world oil production is on the verge of a steep decline. In default of any agreement between these two extremes, this survey relies principally on the Oil & Gas Journal's figures, though with some adjustments, as noted in Table 3.

Hyper-links:
Table 3
Non-OPEC Proven Reserves, 2006
Country/Region Reserves Reserves Remaining
(mn bbl) (years)
Countries in Decline
US* 21,371 8
Great Britain 4,029 6
Norway 7,705 7
Others 33,372 15
Total 66,477 10
Countries that have arrested Decline
Australia* 1,437 8
Congo-Brazzaville 1,506 21
Peru 930 25
Trinidad & Tobago 990 17
Total 4,863 14
Countries close to Peak
Bolivia 441 24
China 18,250 14
Ecuador 4,630 21
India 5,848 20
Malaysia* 3,000 9
Mexico 12,882 9
Sudan† 563 5
Thailand* 291 3
Vietnam† 600 4
Total 46,504 12
Countries where Output is growing
Angola† 5,412 11
Azerbaijan 7,000 38
Brazil 11,243 15
Canada§ 178,792 158
Chad 1,500 21
Equatorial Guinea‡ 1,100 8
Ivory Coast 100 6
Kazakhstan 9,000 21
Mauritania‡ 125 7
Russia† 60,000 17
Total§ 274,272 41
      (minus Canadian tar sands 112,280 17)
Total Non-OPEC§ 392,116 22
      (minus Canadian tar sands 230,124 13)
Totals rounded
* Reserve figure omits some important NGL reserves.
BP gives the following estimates for crude+NGL, as of the beginning of 2005:
           (bn bbl)
US          29.4
Australia   4.0
Malaysia   4.3
Thailand    0.5
† Higher reserve estimates are provided by some authorities
§ Figure includes tar sands. BP gives 2005 estimate of crude+NGL as 16.8 bn bbl,
giving R:P ratio of 15:1
‡ Pearl Oil estimate
Source: (Reserves) Oil & Gas Journal; Pearl Oil
(Reserves remaining) Pearl Oil

Countries not yet producing

A small number of countries may begin producing oil between now and 2015. The principal candidates are:

Madagascar

Madagascar has attracted interest from independents, such as Vanco, and at least one major, ExxonMobil. Assuming oil is found in commercial quantities, production may be up to a decade away. It is unlikely to be able to produce more than 0.1 mn bpd between now and 2015.

Mali

Mali appears to be underlain by the Taoudeni Basin, which is also the source of Mauritania's oil production. The structure is thought to be similar to those found further north and east in Algeria and Libya. Some blocks have already been awarded for exploration in northern Mali. Exploration is not due to be completed until about 2008. If Taoudeni proves to be as prospective as predicted, Mali might be producing up to 0.2 mn bpd in 2015.

Niger

Niger is attracting interest from Asian companies and Algeria's Sonatrach. Petronas has already discovered oil, though reserves are thought to be modest. Output in 2015 is unlikely to exceed 0.1 mn bpd.

Sao Tome e Principe

Considerable optimism has been expressed for the continental shelf surrounding Sao Tome e Principe. Development has been delayed, however, by arguments over upstream terms and the need to agree offshore boundaries. Some foreign companies have dropped out. Production-sharing contracts are currently being negotiated for an area shared with Nigeria, known as the Joint Development Zone. Some of the companies involved in recent licensing rounds have lacked the necessary offshore experience to operate in this area. There could nevertheless be some production up to 0.3 mn bpd by 2015.

Other Areas

The western side of Africa is attracting upstream interest in several other places, including Namibia and the Canary Islands. There has also been interest in East Africa. No significant oil production is expected from any of these areas before 2015.

Non-Conventional Crudes and Gas Liquids

Included in the estimates and forecasts of production in this report are unspecified volumes of non-conventional crudes and NGL. By 2015 liquids should be available from a third source: gas-to-liquids (GTL).

NGL

NGLs range from ethane to pentanes-plus. Ethane production is normally recorded under 'natural gas', leaving propane, butane (LPG) and pentanes-plus (condensate) in the 'oil' category. These last three examples are not always recorded separately. Condensate, for example, often forms part of 'crude oil' streams. World NGL production is in the region of 9 mn bpd, of which about 5 mn bpd is found in non-OPEC countries. Just over 1 mn bpd of the latter is condensate that is traded separately from crude. The main source of this non-OPEC condensate is the Asia/Pacific region.

NGLs (excluding ethane) are included in the figures given for production and reserves, though in the latter case, some may have been omitted (see footnotes to Table 3). The proportion of NGLs in total production is expected to increase by a few percentage points between now and 2015 as non-OPEC gas production rises.

OET ARCHIVE:

'Condensate's prospects', Focus Nov05

GTL

Considerable optimism has been expressed concerning the probable contribution of GTL to world liquids' supply by 2015. Some have predicted production levels in excess of 2 mn bpd by 2015-16. These forecasts are totally unrealistic. Several companies are already scaling back proposals as a result of increasing capital and feedstock costs. Qatar, which was the most enthusiastic supporter of GTL, originally had plans for nearly 0.9 mn bpd of capacity between now and 2015. It now looks likely that the total will be under 0.5 mn bpd.

Nearly all the GTL projects that have been proposed have been or OPEC countries. Non-OPEC production of GTL is currently around 50,000 bpd, from two plants in Malaysia and South Africa. It is unlikely to exceed 0.2 mn bpd in 2015.

OET ARCHIVE:

'Liquids from gas: Technological Fix or Expensive Mistake?', Focus Oct03
'Qatar Move casts Shadow over GTL', Gas and Power Sep05

Bitumen and Extra-Heavy Crudes

Bitumen and extra-heavy crudes are included in the figures presented in the tables for production and (partially) for reserves. As with GTL, there have been several over-optimistic forecasts both of reserves and future production levels. The US has expressed particular interest in developing its own deposits of bitumen as a means of reducing future levels of oil imports.

Bitumen and extra-heavy oil are not found in conventional reservoirs from which they can be relatively easily removed and transported. They exist as heavy deposits in sands or shales and are usually classified as 'oil sands' or 'tar sands', or as 'oil shales', depending on the nature of the rock strata in which the bitumen or heavy crude is contained. The main deposits that are currently being worked in Alberta, Canada and in the Orinoco Belt in Venezuela are in the form of tar sands. Much of the rest of the world's non-conventional reserves are in the form of oil shales.

The oil in tar sands exists in two forms: either as bitumen or as extra-heavy crude. The two are chemically the same but different physically. Bitumen exists in a solid state underground whereas extra-heavy crude occurs in the reservoir as a liquid. This makes bitumen more expensive to extract since it either has to be mined or heated in the underground reservoir (for example, by injecting steam) in order to be extracted. In Canada, the tar sands contain bitumen; Venezuela's have their oil in liquid form as extra-heavy crude. It should be noted, however, that Venezuela's heavy crude is naturally liquid only within the reservoir: at atmospheric temperature and pressure it can no longer flow naturally.

The world's reserves of shale oil and tar sands are immense, far exceeding its reserves of conventional crude and NGL (see Table 4). Estimates for the former run into trillions of barrels; but 'estimates' is all they are. In fact, in many cases, they are better described as 'guesses'.

Table 4
World Tar Sands and Oil Shale Reserves
Country/Region Reserves Remarks
(bn bbl)
Australia 24 Low estimate
82 High estimate
Canada 2,516 Ultimate volume in place
1,630 Initial volume in place
308 Ultimately recoverable
162 Proven reserves
FSU 1,171 Initial volume in place
Jordan 350
Morocco 700
Nigeria 43 Initial volume in place
US 2,000 Ultimate volume in place
100 Proven reserves
Venezuela 1,182 Volume in place
235 Recoverable volume
Source: Company reports; Alberta Energy & Utilities Board; Arab Oil & Gas Directory;
US Geological Survey; PDVSA

Most of the 8 trillion-plus barrels identified in Table 4 must be considered speculative, particularly given the huge ranges for some countries. The US figure of 2 trillion barrels appears to refer to the ultimate volume in place (i.e. including reserves not yet fully identified). The much more modest figure of 100 bn bbl has been suggested as being close to the proven reserves (though this is still about four-and-a-half times the US' conventional proven reserves). It is still too early to say how much of this 100 bn bbl may actually be recovered.

Taking the lowest estimates contained in Table 4, we arrive at a figure of 2.8 bn bbl, which may be taken as approximating to the 'proven' reserves of the main potential non-conventional crude producers. This figure could be reduced further in the case of the former USSR, Jordan, Morocco and Nigeria. If we assume that 10% of the totals for these countries is recoverable, we come up with the totals presented in Table 5.

Table 5
World Proven/Recoverable Non-Conventional Oil Reserves
Country/Region Reserves
(bn bbl)
Australia 8
Canada 162
Former Soviet Union 117
Jordan 35
Morocco 70
Nigeria 4
US 100
Venezuela 235
Total 731
Source: Pearl Oil estimate

Even the total of 731 bn bbl probably over-estimates considerably the amount likely to be recovered over, say, the next 50 years. The amount actually producible during that period may well be less than 100 bn bbl, given the nature of the tar sands and shale oil reserves outlined above. Moreover, there are as yet very few concrete proposals to develop vast new areas for production. Given the lead times required to establish projects in these frontier areas, it may be some time before the world's reserves of non-conventional crude are widely exploited.

There is no large scale, commercial production of synthetic crude from tar sands or oil shales outside Canada and there are few schemes outside Canada for the large scale production of non-conventional crude. Moreover, those in Canada are fairly modest. Venezuela wants to raise production as well, but it is not clear where the investment is to come from. Australia has plans to exploit its oil shales but these have already run into problems. Vague proposals have been made for Jordan, Morocco and the former USSR. Nigeria is unlikely to bother with its relatively small reserves for the foreseeable future, given its existing programme to develop conventional oil and gas reserves. This leaves only the US as a source of major new developments, and even here the picture is not exactly clear.

Canada has tar sands' production of just over 1 mn bpd, with plans to raise this to 3 mn bpd by 2020. It is unlikely, however, to be producing much more than 2 mn bpd in 2015. By 2015, there is unlikely to be more than 0.5 mn bpd of non-Canadian production in non-OPEC countries.

OET ARCHIVE:

'Bitumen and Heavy Crudes', Focus June06

Production Outlook, 2005-2015

The forecast presented in Table 6 suggests that output from non-OPEC countries currently in production will peak at some time in the next decade and will be in long term decline by 2015.

Of the countries listed in Tables 2 and 3, only eight are shown in Table 6 as producing more in 2015 than in 2005. They are:

Assuming all the countries listed in Table 6 produce at capacity, non-OPEC production in 2015 should be 48.1 mn bpd. This represents a fall of 0.1 mn bpd over 2005, though for the countries already in production output is forecast to be down by 0.6 mn bpd.

The forecast is summarized as follows:

2005 2015 Change
(mn bpd)
Countries now in production 48.2 47.6 (0.6)
Countries not yet in production 0.0 0.6 0.6
Total Non-OPEC 48.2 48.1 (0.1)
Totals rounded
Table 6
Non-OPEC Production, 2005-2015
Country/Region 2005 2015 Change
(mn bpd)
Countries in Decline
Total 18.3 12.9 (5.4)
Countries that have arrested Decline
Australia 0.5 0.4 (0.1)
Congo-Brazzaville 0.2 0.2 -
Peru 0.1 0.1 -
Trinidad & Tobago 0.2 0.1 (0.1)
Total 1.0 0.8 (0.2)
Countries close to Peak
Bolivia 0.1 * *
China 3.6 3.5 (0.1)
Ecuador 0.6 0.5 (0.1)
India 0.8 0.8 -
Malaysia 0.9 0.9 -
Mexico 3.8 3.5 (0.3)
Sudan 0.3 0.6 0.3
Thailand 0.3 0.2 (0.1)
Vietnam 0.4 0.3 (0.1)
Total 10.7 10.2 (0.5)
Countries where Output is growing
Angola 1.3 2.4 1.1
Azerbaijan 0.5 1.1 0.6
Brazil 2.0 2.2 0.2
Canada 3.1 3.5 0.4
Chad 0.2 0.2 -
Equatorial Guinea 0.4 0.3 (0.1)
Ivory Coast * * *
Kazakhstan 1.2 3.2 2.0
Mauritania * 0.3 0.3
Russia 9.5 10.5 1.0
Total 18.3 23.7 5.4
Total 48.2 47.6 (0.6)
Countries not yet producing 0.0 0.6 0.6
Total Non-OPEC 48.2 48.1 (0.1)
Totals rounded
* < 50,000 bpd
Source: Pearl Oil

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