OIL SUPPLY 217
a possibility of some big finds in various regions of the world, but
once found, development of the fields is still years away. The only
producers with an oil resource which may be capable of keeping oil
flowing into the world market at a roughly constant level are the
Middle East OPEC producers: Saudi Arabia, Iran, Iraq, Kuwait and
the United Arab Emirates.
However, most of the oil reserves of Saudi Arabia are held in
the large Al Ghawar filed, which has been pumped since 1948 and,
not surprisingly, the field is showing signs of exhaustion with its
southern end now flooding with water. Saudi Arabia can keep its
production roughly constant for another seven to ten years before
it too has used up half its total oil resource and rolls over towards
depletion. The move will be to smaller fields to produce smaller
amounts of crude oil, followed by poor-quality fields, such as the
Manifa field).
In the other Gulf States, it is unlikely that Iran could sustain a
higher output for the next two decades. Kuwait and one of the
emirates, Abu Dhabi, could increase production and may well
do so, but their reserves are small, relative to world demand.
Only one country, Iraq, has the potential for an increase in output on a scale, which could make a difference. However, Iraq's
oil potential has not been fully explored but one estimate is that
there are 110 billion barrels of crude oil reserves in Iraq — equal
to more than one third of the total resource once possessed by
Saudi Arabia. This oil could not be made immediately available,
but it is on a scale to keep world oil production rising for a few
more years.
Most studies estimate that oil production will peak sometime
between now and 2040, although many of these projections cover
a wide range of time, including two studies for which the range
extends into the next century (Gordon, 2007). Key uncertainties in
trying to determine the timing of peak oil are the following:
1. Amount of oil throughout the world
2. Technological, cost, and environmental challenges to
produce that oil
3. Political and investment risk factors that may affect oil
exploration and production
4. Future world demand for oil. The uncertainties related
to exploration and production also make it difficult to
estimate the rate of decline after the peak.
a possibility of some big finds in various regions of the world, but
once found, development of the fields is still years away. The only
producers with an oil resource which may be capable of keeping oil
flowing into the world market at a roughly constant level are the
Middle East OPEC producers: Saudi Arabia, Iran, Iraq, Kuwait and
the United Arab Emirates.
However, most of the oil reserves of Saudi Arabia are held in
the large Al Ghawar filed, which has been pumped since 1948 and,
not surprisingly, the field is showing signs of exhaustion with its
southern end now flooding with water. Saudi Arabia can keep its
production roughly constant for another seven to ten years before
it too has used up half its total oil resource and rolls over towards
depletion. The move will be to smaller fields to produce smaller
amounts of crude oil, followed by poor-quality fields, such as the
Manifa field).
In the other Gulf States, it is unlikely that Iran could sustain a
higher output for the next two decades. Kuwait and one of the
emirates, Abu Dhabi, could increase production and may well
do so, but their reserves are small, relative to world demand.
Only one country, Iraq, has the potential for an increase in output on a scale, which could make a difference. However, Iraq's
oil potential has not been fully explored but one estimate is that
there are 110 billion barrels of crude oil reserves in Iraq — equal
to more than one third of the total resource once possessed by
Saudi Arabia. This oil could not be made immediately available,
but it is on a scale to keep world oil production rising for a few
more years.
Most studies estimate that oil production will peak sometime
between now and 2040, although many of these projections cover
a wide range of time, including two studies for which the range
extends into the next century (Gordon, 2007). Key uncertainties in
trying to determine the timing of peak oil are the following:
1. Amount of oil throughout the world
2. Technological, cost, and environmental challenges to
produce that oil
3. Political and investment risk factors that may affect oil
exploration and production
4. Future world demand for oil. The uncertainties related
to exploration and production also make it difficult to
estimate the rate of decline after the peak.