IHS Energy has just released the 2003 edition of its World Petroleum Trends (WPT) report on E&P activity. Despite reductions in exploration, reserves and new discoveries have outpaced consumption.
Stark
IHS VP Pete Stark summed-up the long-term view, “Although new oil discoveries have not come close to replacing demand, the cumulative effect of discoveries plus reserves revisions has more than kept pace with liquids consumption during the past decade.” In 2003, confirmed liquid resources ‘discovered’ at the end of 1992 were 416 billion barrels, i.e. 26% higher than estimated at the time. Likewise, gas resources discovered at the end of 1992 were 2,300 TCF—a 36% upward revision.
Discoveries down
New hydrocarbon discoveries made in 2002 for the world outside North America amount to almost 6.6 billion barrels of liquids and 30 trillion cubic feet of gas (TCF). 2002 marked the second year in a row when new gas discoveries failed to replace production. Two giant discoveries (over 500 million boe) were made in 2002 - Kikeh—an oil discovery offshore Sabah in east Malaysia, and Tomoporo 9, an oil and gas discovery in Venezuela. Eight other discoveries are likely to exceed 200 million boe in India, Venezuela, Brazil, Bolivia, Nigeria and Vietnam.
What’s left?
IHS Energy estimates that, in 2002, remaining global reserves of liquids and gas stood at 1,153 billion barrels and 6,662 TCF, respectively. In 2002, reserves to production ratios (R/P) for liquids and gas now stand at 43 years and 68 years, respectively. World Petroleum Trends is available for purchase from IHS Energy—contact sales@ihsenergy.com.
IFP
The French Petroleum Institute has also released its annual report on the state of the oil service industry. Worldwide E&P spend increased by 13% in 2001 to a record $120 billion but declined by around 4% in 2002. The IFP expects a new record for worldwide expenditure for 2003—around $125 billion. The increase is due to sustained high oil prices, a better world political outlook and a relatively strong demand. The number of seismic crews operating worldwide continues to decline. The seismic market is still suffering from overcapacity and the main contractors all saw a decline in turnover.
Decline
The IFP estimates the worldwide expenditure on geophysical services and equipment at around $ 4.5 billion in 2002—a decline of 8%. The decline will likely be less in 2003 (about 2%—to $ 4.4 billion) but the outlook is bleak for 2004. Note that seismic acquisition and processing make up around 90% of geophysical expenditure. The IFP also notes the arrival of very competitive Chinese seismic crews which are changing the game for western geophysical companies. Contractors are all implementing restructuring programs with Western-Geco shedding 1,700 employees, Veritas 110, PGS (currently in Chapter 11) 250 and CGG 300. IFP attributes market share as follows; Western Geco, 32%, CGG et PGS 15% each, Veritas 10%, Input/Output, TGS Nopec et Seitel 3% each. Drilling likewise hit a record in 2001 with a $22 billion spend (up 33%) but this was down 11% to $ 20 billion in 2002. The IFP study is available (in French) on www.ifp.fr.
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