The following is a brief review of oil industry performance over the last 20 years or so. I´m writing this post because I sense there´s a bit of confusion and too much optimism regarding the amount of crude oil and condensate we have available to burn in the future.
I should clarify that crude oil and condensate are those fluids we extract from oil and gas wells, and we introduce in a refinery. These wells also produce natural gas liquids (NGL), such as ethane, propane, and butane. I´ve left these out of the picture because they are mostly used as chemical feedstocks or are marketed as LPG, where they compete with natural gas (methane).
To show you my concern over this issue, I prepared a very complex spreadsheet, in which I introduced historical crude oil and condensate (C&C) data for all nations. After rumiating a while and pondering this data I decided to split these countries into several groups, which I called
High Peformers - the top 18 oil industry gorillas, such as Saudi Arabia, Russia, the USA, Canada, Venezuela, Brazil, and so on. These 18 countries produced 61 out of 78 million barrels per day of C&C produced in the world in 2014.
Please note I´m saying the world produced 78 million barrels, and not the higher volumes reported by agencies such as OPEC because I don´t add NGLs, syncrudes, refinery volume gains, and biofuels to the mix. I think adding those non C&C products tends to cloud our vision when it comes to what´s coming out of the ground.
Medium - The next 28 countries. These include Azerbaijan, India, Equatorial Guinea, Gabon, Ecuador, Argentina, etc. The analysis you see below focuses on these countries. They produced 8.5 million barrels per day in 2014.
Note that I´ve lived, worked, or consulted in most of these, so I´m fairly familiar with what goes on.
Low - The next 28 countries. These range from Tunisia to Guatemala. They don´t really mean much.
Marginal - 22 weaklings. They produce less than a single brand new deep water well, about 50 thousand barrels per day.
Conflict and New Source Group - 5 countries which have production rates impacted by politics, conflicts, sanctions, etc, (Libya, Iraq, Iran, Syria, Sudan & South Sudan), plus a line for new emerging production areas (this would include Uganda, the Falklands, Deep Water Guayana, etc). They produced 7.3 million barrels of C&C per day in 2014, but I project they´ll produce over 10 million barrels of oil per day by 2030, if their political issues and economics have positive outcomes.
Now I´m going to show you the production curve for the Medium group. This group is interesting because they are mostly established producers, with steadily declining production. They have been unable to reverse this decline even in a high price environment such as we saw in the 2001 to 2014 period.