1. 1 Olve Torvanger Einar H. Bandlien Svein E. Johansen

2. 2 Oil reserves

3. 3 Development in world oil consumption 195019752000 10 20 30 40 50 60 70 80 Million barrels per day

4. 4 World proved reserves 5 % 66 % 7 % 9 % 4 % Source: BP Statistical review of world energy

5. 5 Reporting of reserves can not always be trusted Source: BP Statistical review of world energy

6. 6 Projecting future discoveries 0 500 1000 1500 2000 2500 193019501970199020102030 Cumulative Discovery, Gb Reality Illusion Inflexion due to falling Discovery OPEC “quota war” “Back dated” reservesReserves as reported

7. 7 Real discovery trend and production 193019501970199020102030 2050 10 20 30 40 50 60 Gb Past discoveries Future discoveries Production Past discoveries by ExxonMobil

8. 8 “Peak oil” Timing of peak oil is a guessing game Its occurrence is not Peaking does not mean “we run out”

9. 9 Discoveries and production USA “Lower 48” 0 5 10 15 20 25 30 1930195019701990201020302050 Discovery Gb 0 2000 4000 6000 8000 10000 Production kb/d

10. 10 Discoveries and production Norway 0 1 2 3 4 5 6 1930195019701990201020302050 Discovery Gb 0 500 1000 1500 2000 2500 3000 3500 Production kb/d 2005

11. 11 Norway and UK creaming curves

12. 12 Discoveries and production Saudi Arabia 0 20 40 60 80 100 120 140 1930195019701990201020302050 Discovery Gb 0 2000 4000 6000 8000 10000 12000 Production kb/d 2005

13. 13 Remaining in place 17 billion bbls 25% Produced; 27 billion bbls 40% Saudi Arabia: Ghawar ‘Ain Dar/Shedgum Area / Arab D resource depletion state 2004 Probable (incremental); 3,5 billion bbls 5% Possible; 7 billion bbls 10% OIIP: 68.1 billion barrels Proved reserves: 41 billion barrels ( 60% of OIIP) Estimated ultimate recovery: 51 billion barrels (75% of OIIP) Source: Saudi Aramco, 2004 Remaining proved; 14 billion bbls 20%

14. 14 Ghawar and the world Ghawar has produced about 60% of all Saudi Arabian oil from 1951-2004 and still accounts for some 50% of the Saudi production When Ghawar output declines, Saudi production will most likely have peaked After peak in Saudi Arabia it is difficult to envisage a global increase in conventional oil production

15. 15

16. 16 Russian production and growth rate

17. 17 Oil production outside OPEC and FSU Historic peak Austria1955 Germany1967 Texas1971 USA Low. 481971 Canada (conventional) 1974 Romania1976 Indonesia1977 Alaska1989 Egypt1993 India1995 Syria1995 Gabon1997 Malaysia1997 Argentina 19981998 Colombia1999 Equador1999 UK1999 Australia2000 Oman2001 Norway2001

18. 18 Oil discoveries and production world total 0 20 40 60 80 100 120 140 160 1930195019701990201020302050 Discovery Gb 0 10000 20000 30000 40000 50000 60000 70000 Production kb/d 2005

19. 19 All petroleum (Note that the boundaries are fuzzy) 0 10 20 30 40 50 1930195019701990201020302050 Production, Gboe/a Non-con gas Gas NGLs Polar oil Deep water Heavy oil Regular

20. 20 Total conventional oil production Heavy oil Tar sands 196019701980199020002010 3 2 1 Mbpd Hibernia, Terra Nova Synthetic crude oil Bitumen Heavy oil NGL Unconventional oil in Canada Source: National Energy Board, CDA and US-DoE-Energy Info. Administration

21. 21

22. 22 IEA demand growth prediction 197120002030 10,000 6,000 2,000 14,000 18,000 Mtoe Energy demand growth Oil Non-hydro renewables Hydro Gas Oil Coal Nuclear Gas 2005 This is more a demand projection than a resource projection

23. 23 New production to satisfy demand 1980 1990200020102020 0 40 80 120 160 200 MBDOE Required new production Existing production Industry field decline 4 - 6 % per year Source: Exxon 2004

24. 24 Composition of energy demand Source: M. Simmons 2004 (Exxon 2004) With 20% growth in wind and solar energy, these would make up around 1% of total energy demand by 2020

25. 25 Monthly production of cars in China 94 96 98 00 02 04 93 95 97 99 01 03 Source: CEIK Data Company (Through Apr 04) 50,000 100,000 150,000 200,000 250,000 China experiences an energy demand growth, which is about twice the economic growth

26. 26 What if China continues its rapid development What if India copies China What if 5 billion people stop using wood fuel and switch to modern energy What if

27. 27 Developing countries’ consumption in perspective 3,000 kg 1,500 kg 500 kg USA > 3,000 Western Europe ~ 1,600 World average ~ 600 Uganda and other ~ 20 Kg per capita per year

28. 28 Summary 90% of world oil reserves are not audited Consumption has exceeded new discoveries since 1980 Today 25% of the consumption is replaced by discoveries Modern seismic was developed after 1960 Peak discovery world wide happened in the 1960s

29. 29 Summary contn. US (Lower 48) production peaked in 1971; predicted by King Hubbert in 1954 Norway production peaked in 2001; 2005 production below NPD estimate Oil production outside OPEC and FSU seems to have peaked Creaming curve for back dated reserves for regular oil indicated total global reserves of 2 trillion barrels Approximately 1 trillion barrels is consumed to date

30. 30 Summary contn. IEA is a demand focussed agency, with limited emphasis on resources BP is not auditing the reserves reported in their annual statistical reports USGS reported resources in the Arctic has uncertainties equal to the estimates for undrilled basins With the exception of the Arctic and the Antarctic and a few politically closed areas, the oil and gas potential is understood

31. 31 Summary contn. The Ghawar field found in 1948 has produced 60% + of Saudi oil, is now producing approx. 5 million bopd and is approaching its tail. When Ghawar peaks, Saudi will have peaked and so will the world. Indications are that the OPEC “swing production is about to be exhausted

32. 32 Summary contn. Peak means that production can no longer be increased; we have then produced about half of the oil After peak the price of oil will be market driven