THE SHARP DROP OF RECOVERABLE OIL WORLDWIDE TREATENS GLOBAL ENERGY SECURITY

July 09, 2022

Following publication of BP’s annual Statistical Review, each year Rystad Energy releases its own analysis of the global energy landscape to provide an independent, data-based comparison and evaluation. Continuing the trend from previous years, Rystad Energy’s 2022 review shows a sizeable drop in recoverable oil resources in what could deal a major blow to global energy security.
According to Rystad Energy analysis, global recoverable oil now totals an estimated 1,572 billion barrels, a drop of almost 9% since last year and 152 billion fewer barrels than 2021’s total. Recoverable oil corresponds to the industry term “remaining technically recoverable crude oil and lease condensate”, i.e. expected volumes including fields, discoveries and risked future discoveries.
The drop in reserves is driven by the 30 billion barrels of oil produced last year, plus a significant reduction in undiscovered resources, to the tune of 120 billion barrels. The US offshore sector has contributed the largest total to that drop, where 20 billion barrels of oil will remain in the ground, largely thanks to leasing bans on federal land.
Of the 1,572 billion barrels of technically recoverable oil, only about 1,200 billion barrels are likely to be economically viable before 2100 at $50 per barrel. This economically extractable oil would contribute about 0.1?C of additional global warming by 2050, and somewhat less by 2100 thanks to natural carbon sinks.
“While the drop in oil availability is positive news for the environment, it may threaten to further destabilize an already precarious energy landscape. Energy security is a matter of redundancy; we need more of everything to meet the growing demand for transport and any action to curb supply will quickly backfire on pump prices worldwide, including large producers such as the US. Politicians and investors can find success by targeting energy consumption, encouraging electrification of the transport sector and drastically improving fuel efficiency,” says Per Magnus Nysveen, Rystad Energy’s head of analysis.
Referring to the report on recoverable oil resources, Saudi Arabia holds onto the top spot with 275 billion barrels, followed by the US with 193 billion barrels. Russia with 137 billion barrels, Canada with 118 billion barrels and Iraq with 105 billion barrels round out the top five.
In South America – a fast-growing region for oil discoveries and production – Brazil remains in first place, with 71 billion barrels of recoverable oil, ten times the volume of proven reserves, but down four billion barrels from last year. In Europe, both the UK and Norway’s recoverable volumes have fallen by one billion barrels and now stand at 10 billion and 17 billion barrels respectively.
Bucking the trend of most countries losing oil resources this year, the US added 8 billion barrels to its discovered resources.
(Source: Rystad Energy – Image: Pipeline construction on Ghawar field in SAudi Arabia/Emirates 24/7)