Note on World Oil Production and Depletion Relations
Near the Peak

Full version with graph in .pdf format.


Reliable estimates of future world oil production are available for at least a five-year horizon based upon announced new expansion projects underway around the world because of the lengthy time required to bring them to fruition. The independent projections prepared in 2005 by Skrebowski in London and by Cambridge Energy Research Associates in the U.S.A. are in close agreement. Skrebowski extended his estimate by making a deduction to account for the expected project `slippage' which was based upon recent experience arising from the delays that often occur in the large-scale undertakings needed to exploit new oil reserves. This corrected projection is termed the Net New Production here. At the peak, this value must equal the net depletion occurring in the pre-existing production facilities. The date of the peak may be found by determining when the Net New Production relation intersects a plausible depletion scenario on the plot. Following Skrebowski, the depletion was assumed to increase five percent per year from a starting net value estimated at one million barrels per day in 2004. Given these assumptions, the peak was predicted to lie between 2013 and 2017. A retrospective estimate of the Net New Production for the past five years was confirmatory of this value.

The plot also contains a representation of the fluctuations about the average to be expected in the Net New Production due to the variation in the size of the individual projects reaching the operating stage in any given year. This fluctuation is large enough to screen variations in other relevant factors so to make short-term predictions of price changes very difficult. The main application of this type of plot is to check for self-consistency among published estimates of future production, rates of decline, and the date expected for the peak. Knowledge of any two of these factors defines the third.

November 2005
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