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There's enough oil left to last for 40 years, says BP

Petroleum giant BP said yesterday that world oil supplies remained plentiful, despite growing concerns about the remaining global reserves of crude.

However, oil production in the UK fell faster than any other exporter in the world last year, as North Sea supplies dwindled.

The company said that the crude price had been driven to high levels by increased demand from China, rather than a drop in the amount of resources available to oil firms.

"There is no global resource or reserve shortage," said Peter Davies, chief economist at BP.

He was speaking as the company published its annual review of world energy trends.

The report said that the amount of proved oil left in the world was 1.15trillion barrels, 10pc more than it estimated last year. It would take 41 years for this to be depleted, the report added.

The remaining proved gas reserves were 13pc higher than last year, at 176trillion cubic meters or 67 years' worth of supplies.

The company's report dismissed conjecture that global oil supplies would soon run dry.

"In 1980 the oil reserve to production ratio was only 29 years," said Mr Davies. "The world has produced 80pc of the proved reserves of 1980 and we are still left with 70pc more reserves than when we started as a result of exploration successes and new technologies."

Analysts had been concerned that estimates of global oil resources were heading for a fall, following Shell's restatement of its reserves.

However, BP said that supplies in Russia had proved to be more plentiful than previously thought.

Mr Davies said oil reserves in Russia, the world's second-biggest producer after Saudi Arabia, may rise significantly in the coming years. He said the country was currently sitting on 69.1 billion barrels, rather than the 60 billion estimated in last year's report.

This nevertheless remains small compared with Saudi Arabia's stock of 262.7 billion barrels, which may also increase sharply in the future.

BP said oil consumption grew sharply in 2003, by 2.1pc.

Much of the increase was attributed to China, which consumed 13.8pc more crude oil than in 2002, with imports rising to 2.6m barrels a day.

Mr Davies said this would continue to rise.

In news which will disappoint environmentalists, BP said world carbon emissions grew by 3.8pc during the year - with half of the increase coming from China, where coal consumption soared.

Opec produced an average of 30.4m barrels a day - well above its current production ceiling of 27.5m barrels.

However, while the oil cartel's output rose by 6.6pc, production by the United Kingdom was the fastest falling in the world, dropping by 220,000 barrels, or 8.9pc, to 2.2m barrels a day.

Editorial Notes: Quite unbelievable that in a year in which not a single 500m barrel "mega" field was reported discovered that global oil reserves should jump 10%! There's no attempt to address oil peak here; instead and quite disturbingly, BP seem to be using the very flawed assumption that you can simply divide total reserves by annual production. Oil of course will not continue to be produced happily until one day we suddenly "run out." Oil will instead become ever more difficult to produce, and long before we get to the supposed, and doubtful, 1.15 Trillion mark, output will begin to decline. BP know this of course, so this piece must really be simply about invester confidence.

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