June 28, 2009

2008 Oil Reserves Analysis

The Economist had a recent graph showing oil reserves as of the end of 2008, with the number of years remaining for each country's reserves at the 2008 rate of production. I posted a similar graph from The Economist back in June 2006, so we'll do a little analysis to see how things have gone in the past three years.

First, there have been some changes in the rankings for total reserves. The top four (Saudi Arabia, Iran, Iraq and Kuwait) remain the same, but Venezuela has moved up one notch, replacing the UAE in fifth place. Russia remains at #7, but Libya has moved up to #8, replacing Kazakhstan. Numbers 10 (Nigeria), 11 (United States) and 12 (Canada) remain the same, but Qatar has moved ahead of China for 13th place. Angola comes in at #15 in the 2008 chart, up four places. Eight countries that were on the 2005 chart were omitted this time (in alphabetical order): Algeria, Azerbaijan, Brazil, India, Mexico, Norway, Oman, and Sudan).

The 2005 chart mentioned that if production were to continue at 2005's level of production, the world would have 41 years' worth of oil left. The good news is that, three years on, global supplies should actually last for another 42 years.

Doing a quick-and-dirty analysis, we can find out which countries have been winners over the past three years and which were losers. Winners are those countries whose reserves will survive longer today than they were expected to last in 2005's estimate, taking into account the three years of production that have passed. (This could happen either because more oil reserves have been proved in the past three years, because production slowed down, or both.)

In fact, all of the countries were winners, except for three; the winners being: Saudi Arabia (3.5 years), Iraq (3), Kuwait (2.6), Venezuela (30!), Russia (3.8), Libya (4.6), Nigeria (10.6), United States (3.4), Canada (12.1), Qatar (19.1), China (2.1), and Angola (2.7).

The three losers were Iran (-3.1), the UAE (-4.3), and Kazakhstan (-7.0).

The full Economist article:

Although the price of oil peaked at $147 a barrel in 2008, the world’s proven oil reserves—those that are known and recoverable with existing technology—fell only slightly, to 1,258 billion barrels, according to BP, a British oil company. That is 18% higher than in 1998. OPEC tightened its grip slightly in 2008, and commands slightly more than three-quarters of proven reserves. Saudi Arabia and Iran together account for almost one-third of the total. Venezuela, with nearly 8%, has the largest share of any non-Middle Eastern country. BP reckons that if the world continues to produce oil at the same rate as last year, global supplies will last another 42 years, even if no more oil reserves are found.

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