Global proven oil reserves increase by 33% over two decades

Venezuela ‘has world’s second biggest oil reserves’

Tamsin Carlisle | VHeadline | June 11, 2010

Venezuela is now the world’s second biggest holder of proved oil reserves, overtaking the Gulf producers Iran, Iraq and Kuwait.

In the 2010 edition of its benchmark Statistical Review of World Energy, which was published last week, BP has made substantial upwards revisions to its estimates of Venezuela’s oil reserves for both last year and 2008.

It appears to have included in its latest tally about 73 billion barrels of heavy crude reserves for which the South American country has long sought recognition from Opec. That has boosted the company’s estimate of Venezuelan oil reserves by more than 73%, following a smaller revision last year.

According to BP, the Middle East’s share of global oil reserves has shrunk by almost 10 percentage points in the past two decades, as producers in South America, Eurasia and Africa have established more commercially viable deposits of the world’s leading fuel. Those countries now officially include Venezuela. BP has set at 56.6% its estimate of the proportion of the world’s proved oil reserves that are located in the Middle East. That is down from 65.7% in 1989.

• Despite the region’s diminished standing as a source of future crude supply, Middle Eastern oil reserves have increased by 14% in the past 20 years to 754 billion barrels, according to BP.

Over the same period, however, the world’s total proved oil reserves have expanded more than twice as fast, swelling by nearly a third to 1.33 trillion barrels by the end of last year from 1 trillion barrels two decades earlier. The world’s top six holders of oil reserves, according to the latest BP league table, are now, in descending order, Saudi Arabia, Venezuela, Iran, Iraq, Kuwait and the UAE, all of which are OPEC members.

Russia was last year’s top oil producer, pumping more than 10 million barrels per day, followed by Saudi Arabia and the US. Russia and Saudi Arabia were also the world’s leading oil exporters. Unlike those countries, the US is a net importer of oil. The review ranked the UAE as the eighth most prolific oil producer last year. The nation’s output, averaging 2.6 million barrels per day (bpd), narrowly exceeded those of Iraq and Kuwait, which each pumped 2.48 million bpd of crude.

Venezuela’s oil output averaged 2.44 million bpd, putting the South American state within range of overtaking every Gulf oil producer except Saudi Arabia and Iran.

As OPEC’s biggest western hemisphere oil producer and a founding member of the group, Venezuela has been pushing for a higher OPEC production quota based on recognition of its large reserves of “unconventional” heavy crude. Venezuela can still develop those deposits while honouring its commitment to OPEC because the group’s production quotas exclude unconventional oil. Formal recognition of the reserves and a higher quota, however, would give Venezuela the country more flexibility to raise its output of lighter crude, which is usually more profitable to produce.

Another landmark emerging from BP’s latest data is that Brazil’s oil production has for the first time exceeded 2 million bpd. Brazil pumped almost as much crude as Nigeria last year and surpassed the output of five other OPEC producers. Brazilian production rose by 7.1% to 2.03 million bpd, cementing the country’s position as South America’s second biggest oil producer.

US oil output, which had fallen in 2008, rebounded last year by 7% to 7.12 million bpd. The 462,000 bpd increase was “by far” the world’s biggest and came mainly from the Gulf of Mexico, said Tony Hayward, the chief executive of BP.

The Middle East remained the world’s top oil producing region last year, accounting for more than 34% of the global total. It was followed by Europe/Eurasia and North America.

In terms of gas, the biggest change from last year, according to BP’s data, was a 13.9% increase in Venezuela’s reserves.

Last September, the Spanish oil and gas group Repsol announced it had struck a giant gasfield off the coast of Venezuela. Hailing the discovery, the Venezuelan president Hugo Chavez said his country would soon become “one of the five giants in the world of gas.”

On the basis of their proved reserves, the reigning monarchs of the gas world are Russia, Iran and Qatar, which between them hold nearly 3.5 quadrillion cubic feet of reserves representing 53% of the global total. Venezuela’s gas reserves, at 200 trillion cubic feet, are now the eighth largest in the world. The UAE has 227 trillion cubic feet of reserves, putting it in seventh place.

Gas reserves in Russia and Saudi Arabia also increased last year. Russian reserves grew by 2.5% to 1.57 quadrillion cubic feet. Those of Saudi Arabia swelled by 4.6% to 280 trillion cubic feet.

Global gas reserves have increased 53% in the past 20 years, outpacing oil. The Middle East’s share has expanded to 40.6 from 30.9%, largely due to development of the world’s biggest gasfield, which is shared by Qatar and Iran.