Current oil reserves are likely to run out by 2034, but new ways to tap unconventional oil and gas reserves could add more than 250 years’ worth of resources, Lux Research said in its recent report, “The Race to Replace Reserves.”
Lux Research found that OPEC has overstated reserves by as much as 70%, but identified unconventional reserves totaling 10.2 trillion bbl. Production from tight oil, oil sands and shale gas will add 9.8 MMb/d of production by 2035.
Lux Research analyzed global reserves, production forecasts, prospects for unconventional reserves and companies operating in the upstream sector. As unconventional reserves are tapped, it found that:
Capital spending will skyrocket. This year, the oil industry is projected to spend more than $728 billion, nearly half on unconventional projects, to find new reserves and develop technologies.
New players are emerging. Though state-owned companies own the bulk of known reserves, Canadian companies such as Suncor Energy, CNRL, Athabasca Oil Sands and EnCana/Cenovus are among the top 50 reserve holders, producing primarily from unconventional reserves.
EOR can ease prices. Enhanced oil recovery has the greatest short-term potential as market forces push oil prices to $170 per barrel by 2020. EOR currently produces 1.62 MMb/d, or 2% of global supply, and is growing as technology improves.