The engine of future increase in world oil output will be Opec, its members’ collective share rising from 44% in 2007 to 51% in 2030. So says the International Energy Agency in its headline-grabbing World Energy Output 2008 report.
But the IEA warns that even if oil demand was to remain flat to 2030, 45million barrels per day of gross capacity – roughly four times the current capacity of Saudi Arabia – would need to be built worldwide by 2030 simply to offset the effect of oilfield decline, which is finally acknowledged as a significant issue.
The short-term capacity issue is also considered critical. The agency says 7million bpd of additional capacity, over and above the 23million bpd expected from the significant number of projects currently under way, needs to be brought onstream by 2015.
However, the present wave of upstream investment looks set to boost net oil-production capacity in the next two to three years but tail off after 2010. More capacity must be sanctioned within the next two years to avoid a fall in spare capacity by 2015 and maybe a supply crunch.
But the IEA admits that, because of the current global financial crisis, there are growing doubts about whether all of this capacity will be forthcoming.
It also warns that major structural changes are under way within the sector, with national companies (NOCs) playing an increasingly dominant role and likely to account for about 80% of incremental production of both oil and gas to 2030.
IEA accepts that non-Opec oil is at peak, will start declining and that the world needs the Organisation of Petroleum Exporting Countries to get anywhere near the 100-plus million barrels per day anticipated within the reference period.
Not a lot changes in that regard. Saudi Arabia remains the world’s largest producer and IEA still sees its output climbing from 10.2million bpd in 2007 to 15.6million bpd in 2030.
A measure of the WEO 2008 report is the unprecedented depth of research carried out by the IEA and, in this issue of Energy, we are focusing on how the agency sees the Opec lifebelt shaping up.
For once, this report should be compulsory reading for supply-chain players, not least those in the UK, and especially Aberdeen.
According to the report, there are 101 upstream oil projects under development and planned by Opec member countries, targeting some 48billion barrels of proven and probable reserves.
Of these projects, 56 are onshore (about 28billion barrels), and the largest contribution is due to come from Saudi Arabia, which will bring four new onshore fields into production.
In the long term, there is considerable potential for other known onshore fields to be brought onstream – in stark contrast to the situation in most non-Opec countries.
There are more than 100 onshore fields awaiting development, each over100million-plus barrels and with combined reserves of more than 50billion barrels.
IEA notes that most are in just three countries: Saudi Arabia, Iran and Iraq.
Two-thirds of those reserves are concentrated in about 30 giant fields of 500million barrels or more in size. They include Sharar, Niban, Jaladi, Dhib and Lugfah in Saudi Arabia; Halfayah, Hamrin, Tuba and Ratawi in Iraq, and Hosseinieh, Kuskh and Kuh-I-Mand in Iran.
IEA suggests that 70 fields in these countries alone will come onstream before 2030 and they will be the cheapest to develop anywhere.
Offshore, over the next five to six years, the agency lists 45 projects either under development or firmly planned with aggregate reserves of 20billion barrels.
The largest is Manifa, in Saudi Arabia, accounting for at least 5billion of the 20billion. This field is expected onstream in 2012 and to produce 1million bpd at peak.
Angola with Nigeria account for some 66% of the remaining 15billion. Nigeria alone has 11 projects of 500million-plus barrels.
Other target projects include Corocoro (450million barrels) in Venezuela; Reshadat and phases 9 and 10 of South Pars in Iran (400million barrels each); phase 2 of the Al Khaleej project in Qatar (380million barrels), and Jeruk 2 (280million barrels) in Indonesia.
No new developments in the UAE are expected medium term, but expansion of existing fields like Upper Zakum, Lower Zakum, Umm Shaif and Rumaitha are planned. The IEA points out that Middle East offshore resources are mostly more economic to develop than those of other Opec countries as they are mainly in shallow water and their average size is about three to four times larger than Angola and Nigeria.