Monday, January 31, 2011

1995 comment on OPEC reserves from the EIA

I've been trawling through old EIA documents looking for any references to the 80s OPEC revisions; this morning I downloaded all of the archived STEOs and come up short, although there is discussion of the bickering in OPEC. Another publication of theirs was the International Energy Outlook, which you'd think would cover this issue; the STEO, after all, does have Short Term in its very title. But they only go back to 1995 in the available Past IEO Editions; but as it happens, our topic is brought up:

OPEC Reserves and Production
Capacity Expansion

The decade of the 1960s saw considerable oil explora-
tion activity, which resulted in the addition of almost
310 billion barrels of crude oil reserves worldwide. (The
reserves referred to in this section are proven reserves,
that is, crude oil that is recoverable using present
technology at current market prices.) The OPEC nations
accounted for more than 60 percent of the additions, of
which almost 82 percent were concentrated in the
Persian Gulf. During the high oil price environment of
the 1970s and early 1980s, most of the oil investment
was in the downstream sector, with negligible additions
to reserves. However, in the latter part of the 1980s,
more than 350 billion barrels of crude oil reserves, an
unprecedented amount, were added worldwide. Unlike
the 1960s, however, when substantial additions were
realized by both OPEC and non-OPEC nations, the
additions during the late 1980s were predominantly by
the OPEC nations (almost 94 percent of the total). Over
the 30-year period from 1960 through 1990, more than
78 percent of the additions to worldwide crude oil
reserves were by the member nations of OPEC, and
more than 85 percent of the OPEC additions were in
the Persian Gulf region.

Considering the substantive additions to OPEC crude
oil reserves, it might be natural to assume that there
were also dramatic increases in OPEC crude oil produc-
tion. Such has not been the case. Although OPEC crude
oil production has been increasing steadily in recent years, it still falls below its 1980 level even today. On
the other hand, crude oil production from non-OPEC
suppliers has seen a two-decade increase of more than
two-thirds. The growth of non-OPEC supply between
1973 and 1980 was largely attributable to three areas:
the Alaska North Slope, Mexico, and the North Sea.
Since 1980, the trend in non-OPEC supply has been
increasingly toward geographic dispersion, with
particular supply potential exhibited in the developing
countries. This two-decade growth in non-OPEC supply
no doubt played a significant role in the erosion of
OPEC’s market share between 1973 and the mid-1980s.
In addition to the unanticipated resilience of non-OPEC
supply, OPEC’s diminished market share during this
period was also the result of the price-induced drop in
world oil consumption, as well as the conscious deci-
sion by Persian Gulf producers to reduce output in an
effort to maintain higher prices.

That's about as far as it goes, unfortunately; the validity of the massive jump in reserves isn't questioned at all, but used as a base for production projections with further reserve growth of varying degrees. It is noteworthy to see it mentioned at all, though.

They include their usual trio of forecasts, too:


Reference/High Price/Low Price
1995 29.5 29.3 30.3
2000 34.8 33.4 38.9
2005 41.7 39.7 48.3
2010 46.2 43.5 55

July 2008 was 36.4 mb/d. Jan-Aug 2010 average C+C was 29.1 mb/d, all liquids 29.9 mb/d. Missed the boat a bit there! 15 years is an eternity in forecasting, though.

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