World Oil
World oil demand is surging as supplies approach their limits.
By Paul Roberts
Photograph by Randy Olson
In 2000 a Saudi oil geologist named Sadad I. Al Husseini made a startling discovery. Husseini, then head of exploration and production for the state-owned oil company, Saudi Aramco, had long been skeptical of the oil industry's upbeat forecasts for future production. Since the mid-1990s he had been studying data from the 250 or so major oil fields that produce most of the world's oil. He looked at how much crude remained in each one and how rapidly it was being depleted, then added all the new fields that oil companies hoped to bring on line in coming decades. When he tallied the numbers, Husseini says he realized that many oil experts "were either misreading the global reserves and oil-production data or obfuscating it.".
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Yet even oil optimists concede that physical limits are beginning to loom. Consider the issue of discovery rates. Oil can't be pumped from the ground until it has been found, and yet the volume discovered each year has steadily fallen since the early 1960s despite dazzling technological advances, including computer-assisted seismic imaging that allows companies to "see" oil deep below the Earth's surface. One reason for the decline is simple mathematics: Most of the big, easily located fields—the so-called "elephants"—were discovered decades ago, and the remaining fields tend to be small. Not only are they harder to find than big fields, but they must also be found in greater numbers to produce as much oil. Last November, for example, oil executives were ecstatic over the discovery off the Brazilian coast of a field called Tupi, thought to be the biggest find in seven years. And yet with as much as eight billion barrels, Tupi is about a fifteenth the size of Saudi Arabia's legendary Ghawar, which held about 120 billion barrels at its discovery in 1948.
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Worldwide, output from existing fields is falling by as much as 8 percent a year, which means that oil companies must develop up to seven million barrels a day in additional capacity simply to keep current output steady—plus many more millions of barrels to meet the growth in demand of about 1.5 percent a year. And yet, with declining field sizes, rising costs, and political barriers, finding those new barrels is getting harder and harder. Many of the biggest oil companies, including Shell and Mexico's state-owned Pemex, are actually finding less oil each year than they sell.
Full article can be read at National Geographic here:
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