New research by the Oil Depletion Analysis Centre (Odac) claims that after 2007, not enough major new fields will come on stream to offset declines.
“Our latest research confirms solidly our view that we cannot see any reasonable circumstances under which new supplies from expected mega oil projects could possibly meet world demand by 2008,” said a spokesman for London-based Odac.
Chris Skrebowski, a board member of Odac, has analysed all planned oil field projects worldwide with reserves of more than 500 million barrels and concluded that, on current timetables, output from new fields will be insufficient to offset more major oil producers moving into net production decline.
Already there are 18 major producers and 32 smaller ones in decline, adding up to 29% of world production. The Odac report calculated future scenarios based on a range of forecasts of annual world demand growth, ranging from modest expectations of 1% per
annum up to 3%. Last year, global oil demand grew by 3.3%, fuelled largely by China. If demand continues to rise at this rate then, by 2008, the world will face a shortfall of one million barrels per day.
Adding to the problem, shortage of skilled workers is thrreatening to throw new developments behind schedule. Sir Ian Wood, chairman and chief executive of Aberdeen-based energy services business Wood Group, said the people shortage has forced some contracting companies to stop bidding for work.
Skrebowski said if projects fall significantly behind schedule, he cannot guarantee that supply and demand will be in balance in 2007 and that, in any case, “by 2008 it all starts to go pear-shaped”. He will detail his findings at a conference in Edinburgh on April 25.