In its annual account of global oil resources, Rystad Energy finds that Saudi Arabia has added enough recoverable oil resources to regain its top position ahead of the United States and Russia. The addition of 73 billion barrels of recoverable oil since the publication of Rystad Energy’s 2016 annual review comes as a result of lower tax rates for Saudi Aramco. The revised fiscal regime should incentivize more aggressive exploration and development drilling in the country, according to the oil and gas knowledge house.
Rystad Energy’s annual review provides a consistent split of recoverable oil resources into proved, probable and expected reserves, as well as contingent and prospective recoverable resources. “Proved reserves” refer to a conservative statistical estimate of oil from fields and wells already sanctioned by oil companies and approved by governments. “Contingent resources” encompass recoverable oil in unsanctioned projects, whereas “prospective resources” are risked estimates from undiscovered fields.
In the US, unconventional shale oil makes up more than 50% of the country’s total recoverable oil resources, which currently stand at 263 billion barrels. Texas alone accounts for more than 80 billion barrels of recoverable oil. Of these volumes, 90% is located in shale formations, with the revitalized Permian basin laying claim to more than 50 billion barrels. In the US, oil companies can typically “prove” less than 15% of their recoverable oil, since reserves may be reported as proved only after several wells have been drilled on corresponding unconventional acreage. However, if natural gas liquids (NGLs) were included in the review, the US would surpass Saudi Arabia by more than 50 billion barrels of recoverable oil and petroleum liquids.
While ExxonMobil reports proved oil reserves of 9 billion barrels to the US Securities and Exchange Commission (SEC)—or about 25% of its estimated recoverable oil—Rystad Energy finds that Saudi Arabia can prove more than 30% of its recoverable oil even when applying strict SEC regulations.
Rystad Energy applies Society of Petroleum Engineers (SPE) standards when assessing reserves and resources. As such, the reserves comparison are standardized across the world, attaining consistency between OPEC and non-OPEC countries, as well as between conventional and unconventional assets. Other public sources of global oil reserves, such as the BP Statistical Review, are based on official reporting from national authorities, who often report resources according to diverse and opaque sets of standards.
Some OPEC countries, such as Venezuela, include undiscovered oil in official reserves reports. Other non-OPEC producers, such as China and Brazil, provide conservative official estimates that incorporate only existing fields.
Rystad Energy estimates total global oil recoverable oil resources at 2.2 trillion barrels, or 73 times the current annual production rate. For comparison, cumulative global oil production up to 2017 stood at 1350 barrels. Unconventional oil recovery accounts for 30% of global recoverable oil resources, while offshore accounts for 33% of the total. As much as 40% of the recoverable oil requires oil prices higher than 80 USD/bbl to become profitable for the oil companies.
“We are halfway in the buildup phase for US shale. We will see a new upcycle in the E&P business once US shale reaches this potential. Oil demand will also remain surprisingly robust over the next decade, despite new innovations to meet growing demand for individual transport in the Western Hemisphere,” says Per Magnus Nysveen, Head of Analysis at Rystad Energy.
Contact: Gina Nygard, Marketing Manager
Phone: +47 24 00 42 00
Contact: Per Magnus Nysveen, Head of Analysis
Phone: +47 24 00 42 00
About Rystad Energy
Rystad Energy is an independent oil and gas consulting services and business intelligence data firm offering global databases, strategy consulting and research products.
Rystad Energy’s headquarters are located in Oslo, Norway. Further presence has been established in Norway (Stavanger), the UK (London), USA (New York & Houston), Russia (Moscow), Brazil (Rio de Janeiro), as well as Singapore and Dubai.