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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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Who Really Controls The World’s Oil Reserves?

  • A new study has some bad news for private oil companies scrambling for more supply.
  • As much as 65 percent of the world’s discovered oil and gas reserves are under the control of national oil companies.
  • To make matters even more complicated, more than 40% of new discoveries were made by national oil companies, as well. 
Oil Reserves

Big Oil majors in the United States have found themselves the target of much pressure to boost production lately, as prices go wild amid a tight—and tightening—market. At the same time, the U.S. government, as well as the EU, have been looking all over the world for more supply. Wood Mackenzie just had some bad news for them. According to new research from the energy consultancy, more than half—65 percent, to be precise—of the world’s discovered oil and gas reserves are under the control of national oil companies.

The reason this is bad news is that, in addition to NOCs like Saudi Aramco, QatarEnergy, and Abu Dhabi’s Adnoc, these companies also include Russia’s Rosneft and Gazprom, the National Iranian Oil Company, and Venezuela’s PDVSA.

These seven companies, according to Wood Mac analysts, can keep producing oil and gas at their current rates for the next 40 to 60 years or even longer if they tap their spare capacity.

It was national oil companies that have made 41 percent of all new oil and gas discoveries in conventional resources since 2011, the analysts noted. What’s more, the NOCs’ share in new discoveries has been on the increase since 2018 as the energy transition push prompts the evolution of their exploration strategies, the report said.

In total, national oil companies have discovered more than 100 billion barrels of oil equivalent since 2011, the report said, which was twice what oil majors discovered. But not all is rosy for the NOCs. Unlike the majors, NOCs were significantly worse at commercializing these new discoveries, the Wood Mac analysts noted.

Two-thirds of what Big Oil has discovered since 2011 is considered viable and advantaged. On the other hand, two-thirds of what the NOCs have discovered is considered contingent.

This could, of course, change with the right incentive. Right now, however, it seems that the NOCs, especially in the Middle East, don’t have much of an incentive, especially as prices begin sliding under the weight of recession fears.

The fact remains, however, that most of the already discovered oil and gas in the world, two-thirds of it, is under the control of just seven companies, of which four are subject to sanctions from some of the world’s biggest oil and gas consumers.

Related: Armed Guards Raid Libyan National Oil Company As Political Shakeup Escalates

One might brush this off on the basis that these large consumers, in the face of Europe and the United States, notably, are moving towards an economic model much less dependent on fossil fuels than it has been hitherto.

An argument could be made—and it has been made by organizations such as Ember—that these barrels of oil and cubic meters of gas are future stranded assets that will fade into obsolescence before the middle of the century rolls around.

Just how valid such a brush-off or an argument would be, however, is a different matter. The last six months, and especially the last three months, have prompted some serious reconsiderations of priorities in European capitals and in Washington. Both have gone from staunch opponents of oil and gas to cautious defenders as energy security trumped emission fears for the first time in years.

As true as that might be, the governments of Europe and the U.S., two of the biggest consumers of oil and gas globally, believe that this refocusing on energy security will only be a short-term matter. Oil and gas will be necessary only for a few more years, their reasoning goes, until we build enough wind parks and solar farms. Coal, too. 

The fact that European buyers are signing long-term contracts for U.S. LNG, however, suggests something else. It suggests an acknowledgment that oil and gas might very well continue to be necessary for not years but decades to come.


And there are just seven companies that can keep supplying that oil and that gas for decades to come without regulatory, government, or activist investor pressure of the kind Big Oil has been subjected to in recent years—pressure that has been affecting its production rates. The future, then, belongs to national oil companies.

By Irina Slav for Oilprice.com

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Leave a comment
  • George Doolittle on July 15 2022 said:
    I'm sorry did you just try and say something about coal and the United States and *"bad news for private sector oil COMPANIES"?
  • Mamdouh Salameh on July 15 2022 said:
    The irrefutable fact is that there could neither be a global economy nor a modern civilization as the one we know and enjoy without oil. How could the world feed a growing population projected to rise from 7.9 billion today to 9.7 billion by 2050 and a global economy projected to grow in size from $91 trillion in 2021 to $245 trillion also by 2050 without oil and gas?

    Therefore, those who argue that future barrels of oil and cubic meters of gas are future stranded assets that will fade into obsolescence before the middle of the century rolls are living in a world of delusions, wishful thinking and denial.

    The power structure of global oil markets is already undergoing a major transformation exemplified by the rising power of the National Oil Companies (NOCs) and the declining influence and power of the International Oil Companies (IOCs). This shift is already evidenced by the emergence of Saudi Aramco as the world’s largest and most profitable oil company eclipsing all Western oil supermajors.

    And whilst top IOCs such as Total, BP, Shell, Chevron, ENI, ConocoPhillips, ExxonMobil, Equinore and Repsol have reserves estimated to last from 8.0-10.5 years, the NOCs of countries like Saudi Arabia, Iraq, UAE, Venezuela, Russia and Kuwait have access to proven reserves which could last up to 99 years at current production.

    Between 1998 and 2002, top IOCs replaced 99.7% of oil produced. This declined to 51.7% between 2003 and 2007. Overall average IOCs’ reserves in place have fallen by 25% since 2015 with less than 10 years of total annual production available. For instance, Shell expects to have produced 75% of its current proven oil and gas reserves by 2030, and only around 3% after 2040.

    This transformation has been inevitable since the birth of OPEC almost sixty two years ago. Another major factor is rising resource nationalism.

    Profit margins per barrel are also a major investment issue as IOCs have been looking at the more challenging environments, such as deepwater, offshore, Arctic, or shale, while NOCs still have major conventional reserves in place. Moreover, an estimated 65% of the world’s discovered oil and gas reserves are under the control of NOCs.

    Seven NOCs, Saudi Aramco, QatarEnergy, and Abu Dhabi’s ADNOC, Venezuela’s PDVSA, Russia’s Rosneft and Gazprom and Iran’s NIOC can keep producing oil and gas at their current rates well into the future.

    If oil and gas are destined to drive the global economy well into the future, then where will the last barrels of oil come from?

    In my opinion, they will come from three regions of the world: the Arab Gulf region, Venezuela’s Orinoco Belt and Russia’s Arctic with the very last barrel produced most coming most probably from Iraq.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London
  • HP Austin on July 18 2022 said:
    In the late 1960s there was a large oil field found at Gull Island off Alaska that was said to have enough oil to supply the U.S. for 200 years, but it has never been tapped. There is no shortage of oil.

    Both cold and hot fusion are said to work, but they would supplant existing energy sources and disrupt the economy, so they must be slowly integrated over several decades.

Leave a comment

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