Chris Skrebowski has developed a list of major new oil fields coming online between now and 2008. Skrebowski analyzed all known projects with estimated reserves of over 500 million barrels and the claimed potential to produce over 100,000 barrels of oil a day. Projects on that scale account for about 80 percent of the world's oil supplies. It takes an average of six years from first discovery for a major field to start producing, so no other fields besides those already planned will coming online until at least the end of the decade.
The key findings of the report include:
- Between 2003 and early 2007 some 8 million barrels of new capacity is expected to come on stream. This should be more than sufficient to offset global production declines of about 3-4 million barrels a day over that period and projected demand growth of around 3 million barrels a day.
- The peak year for new mega projects, predominantly offshore developments, will be 2005 when 18 projects with a potential peak capacity of 3 million barrels a day are due to come on stream.
- The development pace will slow in 2006 with 11 new projects starting up. Their combined peak capacity will be around 2 million barrels a day.
- Only three new mega projects are expected to come on stream in 2007 and a further three in 2008, adding less than 2 million barrels of potential new capacity at their peak.
- From 2007, the volumes of new production will likely fall short of the combined need to replace lost capacity from depleting older fields and satisfy continued growth in world demand.
- Some 23 other projects have been identified that could potentially be developed sometime in the future. All but two of these are in Russia and the Middle East but due to a range of political, legal and technical uncertainties, none is likely to add new supplies to the market before the end of this decade.
The report sounds reassuring, at least for the next four years, even if gets very pessimistic after that. But even Skrebowki's conclusion that 8 million barrels between now and 2007 will be enough to cover depletion and growth seems optimistic. In 2003 countries with declining production lost a million barrels a day of production. This number can't rise any more without exceeding Skrebowski's estimates. Consumption in the first three quarters of 2003 was averaging a million and a half barrels a day above 2002 levels--double the rate of increase that Skrebowski assumes.
Furthermore the peak year for new mega projects will be 2005 when 3 million barrels a day are due to come on stream. By 2006 the number drops to 2 million barrels a day. 2007 and 2008 bring a total of another 2 million barrels a day.
If the numbers from 2003 hold up, it will be very hard for supply to keep up with demand much past 2005. If as Matt Simmons believes, Saudi Arabia is set to go into decline, even making it to 2005 will be difficult.