World crude oil and petroleum liquids production will plateau at a peak rate between 90- and 100 million barrels per day by 2020-30. That was one of several key implications of a Hedberg Research Conference on understanding world oil resources, held by the American Association of Petroleum Geologists in Colorado Springs. Results of the Hedberg meeting, which was held this past fall, were released at a session at the AAPG's annual convention in Long Beach, California, in early April.

The peak plateau rate is expected to be 10% to 20% higher than today's production level, and will persist for 20 to 30 years before global production begins to decline. To achieve this rate, the industry needs to add 4 million barrels of daily capacity each year during the next 15 to 35 years.

The Hedberg conference brought together 75 participants from 18 countries drawn from the upstream professions of petroleum geology, petroleum engineering and geophysics, representing 15 international, national and independent oil companies, 10 national, state and provincial geological surveys and resource agencies and several service companies, universities and consultants.

The world's ultimate recoverable oil resources range between 3.4- and 5 trillion barrels, said Richard Nehring, president of Colorado Springs-based Nehring Associates and chairman of the Hedberg conference. These estimates include cumulative production, proved developed reserves, future conventional discoveries, recovery growth in existing fields and unconventional oil resources that are technologically and economically feasible to recover.

"There's a common misunderstanding that all reserves are alike," Nehring said. "But there's a continuum of cost and resource quality. Resources are also geographically widespread and highly concentrated."

The Hedberg participants took up the task of quantifying the main categories of resources that comprise the world's oil supply.

In addition to the 1.08 trillion barrels of oil that have already been produced, there are 715 billion barrels of proved developed reserves around the world. These reserves are concentrated in two mega-provinces, in Western Siberia and the Arabian/Persian Gulf, and 13 super-provinces. These 15 largest provinces contain 75% to 80% of Earth's developed oil.

Beyond proved reserves lie the undiscovered conventional oil resources, which fortunately are widely studied and well known. "Worldwide, we have a 95% probability of 480 billion barrels of undiscovered conventional oil," said Ron Charpentier of the U.S. Geological Survey. Again, resources are concentrated geographically-only nine provinces account for 65% of the estimates.

It's reasonably likely that another 500 billion barrels can be added to that high-probability estimate, bringing undiscovered conventional resources to the trillion-barrel mark.

However, most undiscovered resources are 15 to 40 years away from production.

Recovery growth in existing fields is another crucial component of future oil supply. Discoveries have tended to become larger over time, due to such technologies as enhanced oil recovery (EOR). At present, half of the world's oil fields have potential for EOR, but the methods are applied on only 11% of fields. Recovery growth has been a main driver in the growth of the world's oil supply for the past 25 years, but it's uncertain if the factors that contributed to this trend will continue into the future.

Several Hedberg participants estimated that recovery growth could account for an additional 1.2 trillion barrels of oil, including application of EOR and improved oil recovery in underdeveloped fields.

Unconventional resources are the final component of the supply picture. These resources represent an enormous but low-grade target. In-place estimates are mind-boggling, but recovery factors are extremely low.

Extra-heavy oil and bitumen deposits, mainly found in Western Canada, Venezuela's Orinoco Belt, and Russia's Siberian Platform, carry 4 trillion barrels of in-place resources, said Jeff Eppink, a principal at Washington-based consulting firm Enegis LLC.

Oil from mature source rocks comprise another unconventional category. Just the Bakken shale in the Williston Basin in the U.S., the Bazhenov shales in Western Siberia, and the Gotnia shales in Iraq and Iran have some 3 trillion barrels in place.

"We expect these numbers to grow significantly, and this resource could potentially be much larger," he said, as this is still a poorly understood component of the oil resource base.

Thermally immature source rocks, such as the Green River oil shales in the Western U.S., contain another 3 trillion barrels worldwide.

That results in unconventional in-place resources of 10 trillion barrels, of which only a few percent can be economically recovered at present.

"With unconventional resource development, we have to be sure that there is a net energy gain and that we are not just engaged in energy-production busy-work," said Eppink.

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