The U.S. holds more oil reserves than anyone else in the world, including Saudi Arabia, Russia, and Venezuela.
That conclusion comes from a new independent estimate from Rystad Energy, a Norwegian consultancy. Rystad estimates that the U.S. holds 264 billion barrels of oil, more than half of which is located in shale. That total exceeds the 256 billion barrels found in Russia, and the 212 billion barrels located in Saudi Arabia.
The findings are surprising, and go against conventional wisdom that Saudi Arabia and Venezuela hold the world’s largest oil reserves. The U.S. Energy Information Administration, for example, pegs Venezuela’s oil reserves at 298 billion barrels, the largest in the world. Rystad Energy says that these are inflated estimates because much of those reserves are not discovered. Instead, Rystad estimates that Venezuela only has about 95 billion barrels, which includes its estimate for undiscovered oil fields.
Moreover, Rystad argues that there are not uniform ways of measuring oil reserves from country to country. Some countries report proven reserves, using conservative estimates from existing oil fields. Other countries, like Venezuela, report undiscovered reserves. But Rystad applied similar metrics to all countries in its report to make comparisons easier. “An established standard approach for estimating reserves is applied to all fields in all countries, so reserves can be compared apple to apple across the world, both for OPEC and non-OPEC countries. Other public sources of global oil reserves, like the BP Statistical Review, are based on official reporting from national authorities, reporting reserves based on a diverse and opaque set of standards.” The latest assessment, Rystad argues, paints a more accurate portrait.
The U.S., then, sits atop with its oil reserves. Rystad notes that Texas alone could have 60 billion barrels of oil.
Over at Reuters, John Kemp uses the data to take a look at Saudi Arabia, long thought to have a vast and seemingly endless pool of oil upon which to draw. He notes that the Saudi government suddenly upgraded its oil reserve estimates from 170 billion barrels in 1987 to 260 billion barrels in 1989. Since then, Saudi oil reserves have been unchanged for more than 25 years at 260 billion barrels. As Kemp wryly puts it, “If the government data is accurate, the kingdom has managed the remarkable feat of exactly replacing each produced barrel with new discoveries or increased estimates of the amount recoverable from existing fields.” Related: Fresh Niger Delta Attacks Could Send Oil Prices Up
Of course, nobody knows the true extent of Saudi oil reserves, which is a closely guarded state secret. But the economic transformation initiated by the Deputy Crown Prince Mohammed bin Salman could start to change things. The prince has cited his plans to help steer the Saudi economy away from its dependence on oil sales. Part of that plan includes a partial IPO of Saudi Aramco, the state-owned oil company. Of course, part of any privatization would need to include a valuation of the company, and to properly assess the value of Aramco, the company would need to disclose more data on its reserves. Whether or not that happens remains to be seen.
Nevertheless, Rystad still puts the U.S. ahead of Saudi Arabia in oil reserves, at 264 billion barrels compared to Saudi’s 212 billion barrels.
The rankings change when simply looking at oil reserves from Proved + Probable (commonly referred to as “2P”), an estimate from existing oil fields. Saudi Arabia has 120 billion barrels of 2P oil reserves, compared to the U.S.’ 40 billion barrels.
On a global basis, Rystad estimates that the world has about 2,092 billion barrels of reserves, or about 70 years’ worth of oil at today’s production rate of 30 billion barrels per year. That compares to the 1,300 billion barrels produced around the world in history. While there is a lot of oil left then, according to this estimate, most of it is of the unconventional variety – whether shale or oil sands or other difficult-to-produce forms of oil. In short, Rystad concludes: “this data confirms that there is a relatively limited amount of recoverable oil left on the planet.” It goes on to caution that business-as-usual won’t work. “With the global car-park possibly doubling from 1 billion to 2 billion cars over the next 30 years, it becomes very clear that oil alone cannot satisfy the growing need for individual transport.”
By Nick Cunningham of Oilprice.com
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