CRUDE OIL CLASSIFICATION AND BENCHMARKS
105
However, controversy surrounds predictions of the timing of
the global peak, as these predictions are dependent on the past
production and discovery data used in the calculation as well as
how unconventional reserves are considered. Supergiant fields
have been discovered in the past two decades, such as Azadegan,
Carioca/Sugar Loaf, Tupi, Jupiter, Ferdows/Mounds/Zagheh,
Tahe, Jidong Nanpu/Bohai Bay, West Kamchatka, and Kashagan,
as well as tremendous reservoir growth from places such as the
Bakken and massive syncrude operations in Venezuela and Canada.
While past understanding of total oil reserves changed with newer
scientific understanding of petroleum geology, current estimates of
total oil reserves have been in general agreement since the 1960s.
Furthermore, predictions regarding the timing of the peak are
highly dependent on the past production and discovery data used
in the calculation.
It is difficult to predict the oil peak in any given region, due to the
lack of transparency in accounting of global oil reserves. Based on
available production data, proponents have previously predicted
the peak for the world to be in years 1989,1995, or 1995-2000. Some
of these predictions date from before the recession of the early 1980s,
and the consequent reduction in global consumption, the effect of
which was to delay the date of any peak by several years. Just as the
1971 U.S. peak in oil production was only clearly recognized after
the fact, a peak in world production will be difficult to discern until
production clearly drops off.
Clearly such concerns, whether real or truly theoretical, cannot
help but have some influence on the price of oil.
Thus, the classification of crude oil and crude oil reserves is an
important indicator for the value of an oil company and the netback
from a barrel of oil (i.e. the linkage between the price of curd oil
and the products derived from it) ultimately determines the intrinsic value of a company. Because largely its reserves and resources
drive the value of a company, it is one of the main drivers of the
market capitalization of listed companies.
4.1 Crude Oil Classification
All crude oil is not valued equally because it varies markedly in
appearance and properties, particularly in ease of recovery from
the reservoir and production of saleable products in the refinery,
105
However, controversy surrounds predictions of the timing of
the global peak, as these predictions are dependent on the past
production and discovery data used in the calculation as well as
how unconventional reserves are considered. Supergiant fields
have been discovered in the past two decades, such as Azadegan,
Carioca/Sugar Loaf, Tupi, Jupiter, Ferdows/Mounds/Zagheh,
Tahe, Jidong Nanpu/Bohai Bay, West Kamchatka, and Kashagan,
as well as tremendous reservoir growth from places such as the
Bakken and massive syncrude operations in Venezuela and Canada.
While past understanding of total oil reserves changed with newer
scientific understanding of petroleum geology, current estimates of
total oil reserves have been in general agreement since the 1960s.
Furthermore, predictions regarding the timing of the peak are
highly dependent on the past production and discovery data used
in the calculation.
It is difficult to predict the oil peak in any given region, due to the
lack of transparency in accounting of global oil reserves. Based on
available production data, proponents have previously predicted
the peak for the world to be in years 1989,1995, or 1995-2000. Some
of these predictions date from before the recession of the early 1980s,
and the consequent reduction in global consumption, the effect of
which was to delay the date of any peak by several years. Just as the
1971 U.S. peak in oil production was only clearly recognized after
the fact, a peak in world production will be difficult to discern until
production clearly drops off.
Clearly such concerns, whether real or truly theoretical, cannot
help but have some influence on the price of oil.
Thus, the classification of crude oil and crude oil reserves is an
important indicator for the value of an oil company and the netback
from a barrel of oil (i.e. the linkage between the price of curd oil
and the products derived from it) ultimately determines the intrinsic value of a company. Because largely its reserves and resources
drive the value of a company, it is one of the main drivers of the
market capitalization of listed companies.
4.1 Crude Oil Classification
All crude oil is not valued equally because it varies markedly in
appearance and properties, particularly in ease of recovery from
the reservoir and production of saleable products in the refinery,