Programme Booklet for Oil & Gas Depletion Workshop Now Available
A 36-page booklet containing abstracts of the presentations and biographies of the 28 speakers at the Third International Workshop on Oil & Gas Depletion in Berlin on 25-26 May is now available and can be downloaded here.  Organised by The Association for the Study of Peak Oil (ASPO), a network of European scientists, the workshop brought together energy analysts, economists, industry leaders and public officials to examine the outlook for global oil and gas production, assess the far-reaching economic, social and political impacts of diminishing supplies, and consider energy options for the future.  The full proceedings of the workshop will be available in due course on the ASPO website.

Is Depletion Underpinning High Oil Prices?
While analysts have been offering wide-ranging explanations for current high oil prices, one rarely mentioned factor is the effect of depletion.  But, according to Chris Skrebowski, editor of Petroleum Review, "depletion is starting to have a significant impact — and one that can only grow."   With 29 percent of global oil production in 2002 coming from areas already in permanent decline, he estimates that annually production in those areas is falling by around 850,000 barrels a day.  "The under-recognised impact of this is that, to meet this year’s projected demand growth of 1.6 mn b/d,  the producers still able to expand production have to meet [that demand growth] and make up for the largely unreported 850,000 b/d of decline," he says.  The actual rate at which they must increase production, therefore, "is not the overall 2.1% growth reported by the IEA but a rather more demanding 4.1%."  The demands on those producers will become even greater as more of the world’s production goes into decline in future years.  "This would seem to be a key factor in the continuing strength of oil prices," he writes in an editorial in the April edition of Petroleum Review.   

New Forecast Suggests World Oil Production Peak by 2006-07
World oil production could peak well before the end of the decade, according to an updated analysis by a senior planner at the National Iranian Oil Company.  A. M. Samsam Bakhtiari’s latest forecast, published in Oil & Gas Journal, suggests that global oil output could peak at around 81 million barrels a day by 2006-2007 and then steadily decline to about 55 million barrels a day by 2020.  "Under no scenario (even the most exotic ones)," he reports, could his model "be simulated to peak after 2008 — a date that really seems to be the ultimate terminus ad quem."  

French National Assembly Member Calls for International Oil Agreement
A member of the French National Assembly has called for an international agreement to conserve and regulate remaining supplies of oil in the face of falling production and rising global demand.  Highlighting the threat of an imminent ‘oil shock’ arising —  unlike those of the 1970s — from physical shortages rather than political causes, former environment and regional planning minister Yves Cochet suggests, in a recent article in Le Monde (English translation), that the inevitable adverse effects could be softened by concerted international action now.

Doubts Raised Over New Oil-Recovery Technology
Contrary to oil industry claims that new technology will increase the amount of oil ultimately recovered from maturing fields, internal company documents from Royal Dutch/Shell suggest that the hoped-for gains may not materialise, according to a recent report in The New York Times.  The article cites Shell’s experience with advanced horizontal drilling technology in Oman, where the company’s oil production has been rapidly declining for years.  It says that Shell’s former chairman, Sir Philip Watts, announced in 2000 that "major advances in drilling" were enabling the company "to extract more from such mature fields."  But, the paper reports, "a Shell document last fall did not project the technique to increase the amount of oil that will ultimately be recovered" and, in fact, it "increased the amount of water in the extracted oil to as much as 90 percent of the total volume, increasing production costs."  According to a senior official at the Iranian National Oil Company, Ali Morteza Samsam Bakhtiari, this suggests that even advanced extraction techniques "won’t bring back the good old days."

Analysts Forecast Oil Supply Shortfalls, Price Increases
Growing oil demand together with falling reserves and declining discovery rates will produce sustained oil price increases sooner than many people believe, according to a new study by independent energy analysts Douglas-Westwood, Oil & Gas Journal reports.  "By 2008 all OPEC countries will need to begin to increase production as much as they can to meet even modest demand growth," study author Michael R. Smith said.  "It is likely that by then the world will begin to see sustained growth in oil prices."  Of the 99 significant oil-producing countries, 52 are well past their peak production and another 16 are at or will soon reach their peak, the study shows.  The remainder will peak within the next 25 years.  "The declining oil discovery rate is a signal that opportunities are limited and that production must decline in the future," Smith said, noting that just a one percent growth in world economic activity would increase oil demand to the point where global production could peak as early as 2016. 

New Film on Oil Depletion:  The End of Suburbia
A new documentary film exploring the impacts of the approaching peak in world oil production has been released on DVD.  Produced by two Canadian film-makers and featuring interviews with leading oil-depletion experts, The End of Suburbia:  Oil Depletion and the Collapse of The American Dream examines "with brutal honesty and a touch of irony" what oil peak will mean for the suburban populations of North America as energy prices skyrocket in coming years.  Click here for more information. 

No Large Oil Discoveries Reported in 2003
It appears that 2003 may be the first year since the dawn of the modern oil industry to have recorded no large oil discoveries at all, according to a recently published review by consultants IHS Energy.  "One of the most significant concerns was that 2003 didn’t produce large, unpredicted finds," said Ken White, Senior Editor of the IHS report, Discoveries and Highlights 2003.  Chris Skrebowski, Editor of Petroleum Review, described the year’s exploration results as "little short of horrifying" in a recent editorial, noting that "We would probably have to go back to the early 1920s to find a year when fewer large oil discoveries were made."  He went on to say:  "It is worth recording that exploration is driven by the prospect of finding large fields, which justify the expenditure on the infrastructure.  Small fields are found as a by-product of searching for the large ones and depend on the large field infrastructure for their development, particularly offshore." 

Canadian Professor Argues for New Energy Supply and Pricing Policy
"The present world energy market obscures the true price of hydrocarbon fuels and inhibits the development of alternatives," according to Professor William E. Rees at the University of British Columbia.  In an article published in the Canadian Centre for Policy Alternatives Monitor, he calls for "international agreement on a persistent, orderly, predictable, and steepening series of oil and natural gas price hikes over the next two decades" to signal the real scarcity to come and avoid a serious energy crisis.  "Without higher prices," he argues, "we will not invest in the technologies needed for a smooth transition to the post-petroleum age.  Without higher prices, we will not conserve the fossil energy needed to manufacture those alternative technologies." 

Wood Mackenzie Confirm Falling Oil Discovery Trend
Overall oil discoveries from new fields have replaced only 40 percent of production since the mid-1990s and the industry now faces "significant exploration challenges", according to a report by oil consultants Wood Mackenzie (New Thinking Needed for Exploration?).  The report notes that since 2001, the 10 largest western oil companies together spent more on exploration than the present value of the discoveries they made.  Since they "need to find the equivalent of a UK North Sea every 18 months just to stand still", the consultants conclude that exploration cannot continue to be the main growth engine for the majors as it has in the past." 

New Report:  Oil Supply Shortages Likely After 2007
Global oil supplies could struggle to meet growing demand after 2007, according to a recent analysis of existing and planned major oil-recovery projects published in Petroleum Review.  While a flood of new production is set to hit the market over the next three years, the volumes expected from anticipated projects thereafter are likely to fall well below requirements, the report says.  All known projects with estimated reserves of over 500 million barrels and the claimed potential to produce over 100,000 barrels of oil a day were analysed.  Projects on that scale account for about 80 percent of the world’s oil supplies.   The report found that just three such projects are expected to come on stream in 2007 and three more in 2008.  No new projects could be identified for start-up in subsequent years.  Noting the dramatic drop in major new oil field discoveries in recent years and the average six-year lead time required to bring approved mega projects on stream, the report concludes that the volumes of new production beyond 2007 will likely fall short of the combined need to replace lost capacity from depleting older fields and satisfy continued growth in world demand.  The full report can be downloaded in PDF here.

Has Middle East Oil Production Peaked?
U.S. energy investment banker Matthew Simmons warned recently that Middle East oil production may have reached its peak.  Contradicting the conventional wisdom that Saudi Arabia, the region’s dominant oil producer, holds virtually limitless supplies of cheap oil, he believes that geological and technical constraints are making Saudi oil more difficult and costly to extract.  His new analysis is based on an in-depth assessment of some 200 technical papers.  "If conventional wisdom is wrong, the world faces a giant energy crisis," he said in a recent presentation on The Saudi Arabian Oil Miracle at The Center for Strategic and International Studies in Washington, D.C.  A senior analyst at the National Iranian Oil Company, A. M. Samsam Bakhtiari, raised similar concerns in a paper presented at the Second International Workshop on Oil Depletion in Paris last May.  He concluded that "Middle East production should plateau during the present decade before peaking early in the next one."  Dow Jones Newswires reported last year that Saudi Arabia’s "crude oil output has reached its limit at around 9.2 million barrels a day and won’t rise further" without billions of dollars of new investment.

Free ASPO Newsletter
Subscriptions Now Available The Association for the Study of Peak Oil (ASPO) produces a monthly newsletter containing news, commentaries and an ongoing series of oil-depletion assessments for individual countries, as well as other useful information.  Free subscriptions are now available.  The newsletter has been produced for the past three years and back issues can be downloaded in Word or PDF formats here.

Danish Review of Oil-Depletion Analyses Published
The Danish Board of Technology, which advises the Danish government, and the Society of Danish Engineers have published a report, ‘Oil Based Technology and Economy:  Prospects for the Future’, which outlines oil depletion issues and provides an overview of various projections for future demand and supply.  Prepared in conjunction with a conference held in Copenhagen on 10 December 2003 co-sponsored by the two organisations, the peer-reviewed document may be downloaded in pdf format from the Society of Danish Engineers website (click on ‘Conference Report’).

Report Highlights Decline in New Oil and Gas Discoveries
Just two giant oil discoveries (over 500 million barrels) were reported in 2002 while gas discovery failed to replace annual production for the second year running, according to the 2003 World Petroleum Trends Report produced by consultants IHS Energy.  Total oil discoveries (excluding North America) for 2002 fell by 35 percent, from 10.1 billion barrels in 2001 to 6.6 billion barrels.  With total world oil production for the year at 26.7 billion barrels, more than four barrels were produced for every new barrel found.  "Our data shows that even though the number of international discoveries have declined, the combination of reserve revisions and new discoveries has exceeded global oil demand over the past ten years.  This partly explains the paradox of the petroleum industry’s ability to generate excess oil supplies even though new oil discoveries have not come close to replacing demand," said Pete Stark, Vice President, Industry Relations, IHS Energy.  The report says upwards revisions of earlier reserves estimates account for about 75 percent of all additions to global reserves, while only 25 percent has come from new discoveries.

Huge Investment Needed to Meet Future Energy Demands
The world’s increasing demand for oil will require total investments of over $3 trillion — or more that $100 billion a year — by 2030, according to a report from the International Energy Agency (IEA).  Estimating that worldwide demand for oil would reach 120 million barrels a day by 2030, up from 77 million barrels now, the agency’s recently published World Energy Investment Outlook 2003 says that three quarters of the projected investment will be needed to counter the natural decline in production from existing fields, with the remainder needed to meet rising demand.  While the agency forecasts that 43 percent of the world’s oil supply will come from the Middle East in 2030 — 50 percent more than at present — the report notes that geopolitical factors and government policies pose major investment uncertainties.  "Quantifying global investment needs and then analysing the obstacles to funding leads, inevitably, to the question: ‘Will the required sums be forthcoming?’", Claude Mandil, the IEA Executive Director, says in the Foreward to the report.  "Rather than attempt to answer that question definitively, we shall be satisfied if we promote an urgent and serious debate, leading governments, in particular, to adopt policies which will help overcome the obstacles."

New Spanish Website Launched
Oil-depletion information is now available on a dedicated Spanish-language website, Crisis Energé, which aims to open up a debate on the subject within the Spanish-speaking world.  The website contains news articles published in Spanish on energy-related issues, Spanish translations of the monthly newsletters produced by the Association for the Study of Peak Oil (ASPO), and translations of other English-language articles.  It offers a forum for public debate and links to other websites.  Contributions (in Spanish or English) may be sent to the Editor and Webmaster, Daniel Gómez.