“Proved reserves of oil and gas remain more than adequate to meet the world's growing needs for the immediately foreseeable future,” company chief economist Peter Davies said in London at the release of the 2005 BP Statistical Review of World Energy on Wednesday.
“Investment and new technologies will ensure that there will be further additions to these reserves in the future. The world does not face a shortage of hydrocarbon resources or reserves.”
Davies said that globally each barrel of oil and cubic metre of gas produced from existing proved reserves was replaced by at least the equivalent in new reserves. Known reserves could support current oil production for over 40 years and over 67 years for gas.
The world's proved oil reserves reached 1.2 trillion barrels at end of 2004, 17% more than they were 10 years ago. About 62% of those reserves, or 734 million barrels, were found in the Middle East, with Saudi Arabia alone holding around 263 million barrels -- over a fifth of the global total.
Global overall energy demand grew by 4.3% in 2004, the highest since 1984. “It is exceptional that this demand growth was so geographically widespread,” Davies said.
Overall demand growth was driven mainly by China, which now consumed almost 14% of total world energy. Mainland China's 15% jump in energy demand in 2004 equalled 43% of total world energy consumption growth.
Davies added that the current oil price environment would remain even if global economic growth and oil consumption started to ease. Investment was not constrained as exploration was at record levels, with companies increasing their efforts to find more oil and gas resources and increase production.
“Consumption is higher, growth has been strong, capacity is tight, and prices have increased. We are starting from a new position.”
But additional capacities would take a number of years to come onstream as more and more reservoirs were found in deeper offshore fields.
Fellow giant Royal Dutch Shell also believes there are enough oil and gas reserves worldwide.
Dow Jones Commodities News reported Royal Dutch Shell chief executive officer Jeroen van der veer telling the Asia Oil & Gas Conference in Kuala Lumpur, Malaysia, this week that the current tight demand-supply situation would continue, ensuring crude oil prices remained vulnerable to supply disruptions.
The current tight supply situation wasn't due to insufficient reserves, but a lack of "easy-to-find’ oil and gas, and a lack of spare refining capacity.
But it took time to increase capacity and high oil prices were needed to justify the considerable investment involved in maintaining output levels of maturing oil and gas fields and looking for new reserves, he said.
Imports would supply the bulk of Asia’s energy demands by 2030 and a lot of investment would be needed to ensure such consumption growth could be met. Last year Shell invested a total of US$15 billion globally, with US$12 billion of that going to upstream projects.