Identifying petroleum resources

Proving oil and gas reserves
Applying petroleum geophysics
Evaluating petroleum resources

Context

The world's leading petro-geologists disagree about exactly when global production of oil will peak. That is the point where half the known oil reserves and projected oil yet to be discovered are used up. After that point, the price of oil on world markets steadily rises as oil production moves down the classic bell-shaped curve. The Cassandras say that peak production is likely to occur as early as the end of 2010, but probably no later than 2020, while the optimists say that global peak production won't occur until around 2040. What is most striking, however, is how little time difference separates the two camps – only 20 to 30 years. What they both agree on is that once global oil production does peak, two-thirds of the remaining oil reserves will be in the Middle East, the most politically unstable and volatile region of the world. What this means is that countries still dependent on oil will be locked into a fierce geopolitical struggle to maintain access to the remaining oil fields of the Middle East, with all of the grave risks and consequences that accompany that sober reality.

Implementation

The Petroleum Resources Branch of the Bureau of Resource Sciences, in conjunction wwith the Australian Geological Survey Organisation, manages various national petroleum datasets. The data include physical collections of reports and samples, relational databases, seismic field and processed data, and digital spatial datasets. Several relational databases of basic information underpin the management, integrity and accessibility of other information.

The six-nation Caspian Sea region harbours vast natural gas reserves and at least 100 billion barrels of oil, 10 times that of Alaska and second in supply only to the Middle East.

Claim

Raw materials – including energy resources – are generally more abundant and less expensive today than they were twenty years ago. In the 1970s, economically recoverable world reserves of petroleum stood at 640 billion barrels. Since that time reserves have increased by more than 50 percent, reaching more than 1,000 billion barrels in 1989. They have held steady in spite of rising consumption. The pre-tax real price of gasoline was lower during this decade than at any other time since 1947. The World Energy Council announced in 1992 that "fears of imminent (resource) exhaustion that were widely held 20 years ago are now considered to have been unfounded."

Counter-claim

In 1987, there was a sudden boost of reported crude-oil reserves. It turns out that all of this came from Middle Eastern governments: Iraq, Iran, and a few other countries increased their proven reserves by 250 percent overnight. It was not improved technology or new discoveries that led to this; the governments of those countries simply recalculated the volume of recoverable oil in the fields. So 'proven reserves' are completely unreliable.

Overall, the discovery of oil rarely means immediate or long-term prosperity for the people who live in an oil-producing country. Despite billions in profits from Nigerian oil, the majority of Nigerians remain desperately poor. Iran has had a similar experience.