June 8, 2011

46 years of proved oil reserves left

In its just released must read Statistical Review of World Energy, BP has many important observations.

From the report:

"World primary energy consumption – which this year includes for the first time a time series for commercial renewable energy – grew by 5.6% in 2010, the largest increase (in percentage terms) since 1973. Consumption in OECD countries grew by 3.5%, the strongest growth rate since 1984, although the level of OECD consumption remains roughly in line with that seen 10 years ago. Non-OECD consumption grew by 7.5% and was 63% above the 2000 level. Consumption growth accelerated in 2010 for all regions, and growth was above average in all regions. Chinese energy consumption grew by 11.2%, and China surpassed the US as the world’s largest energy consumer. Oil remains the world’s leading fuel, at 33.6% of global energy consumption, but oil continued to lose market share for the 11th consecutive year." And in terms of production reserves: "World proved oil reserves in 2010 were sufficient to meet 46.2 years of global production, down slightly from the 2009 R/P ratio because of a large increase in world production; global proved reserves rose slightly last year. An increase in Venezuelan official reserve estimates drove Latin America’s R/P ratio to 93.9 years – the world’s largest, surpassing the Middle East."

There is much more in the full report, but three charts bear a simple conclusion, crude prices likely have a long way to go up unless the global economy promptly commences another 2008 mega deflationary episode (read economic crisis).

Reserves-to-production (R/P) ratios:

And Real crude Prices since the Pennsylvania Oil Boom:


World trade movements of crude:



And the full booklet:
2030 Energy Outlook Booklet
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