Browse
related articles
One of the principal dilemmas seen in the oil market is obtaining accurate information and even basic statistics. A major reason for the scepticism results from OPEC's decision to change to a system of production quotas in the 1980s that is based on the size of each member country's reserves.
The larger these are the higher the quota. In 1985, Kuwait immediately revised its official reserve figure upwards by 50 per cent. Other countries followed. In 1988, Saudi Arabia issued a revised reserve figure adding 88 billion barrels.
Non-transparent data
A generation later, reserve estimates remain unchanged with no explanation if and to what extent new field discoveries may be compensating for depletion of reserves in existing fields. Saudi Arabia puts current reserves of 259 billion barrels, the UAE claims 92 billion barrels and Iran 93 billion barrels
Some 20 per cent of the world's oil supply comes from 14 oilfields that have been pumped for an average of 60 years since they were discovered. No reservoirs of comparable size have been discovered since the late 1960s and 1970s, critics point out.
Are aggressive production targets are hastening the depletion of such reserves?
Saudi Aramco, and other producers in the GCC, seem undisturbed. Aramco is planning to increase the number of development wells drilled by more than 60 percent this year compared to 2005 in an effort to raise crude oil production capacity to at least 12.5 million b/d by 2009 from 11 million b/d now.
Question marks
Nonetheless, the question mark over Gulf reserves remains. Nearly one out of every three barrels of oil reserves in the world lie under just two countries: Saudi Arabia reportedly with 259 billion barrels of proven reserves and Iraq with 112 billion barrels.
While Iraq currently plays a relatively marginal role in global oil markets, this is not the case with regard to its oil reserves. The war-torn country sits on 11 per cent of worldwide proven reserves of 1,050 billion barrels increasing its potential long-term significance for international oil supplies.
Experts believe Iraq's share of oil reserves might even be higher if potential reserves are included and could hold as much as 432 billion barrels according to US estimates.
Whatever the true level of GCC oil reserves is the region seems destined to play an increasingly influential role in meeting world energy demands. By 2020, the Gulf is forecast to supply more than half the world's crude oil and possibly as much as two thirds.
