A Twenty-Year Look at Free World Petroleum Requirements-A 300 Billion Barrel Challenge
Authors: Nelson T.W. 
Published: December 2007

Special attention to the future is more important today than it ever has been before because of the enormity and difficulty of the challenge facing the Free World petroleum industry over the next 20 years-one of satisfying an ever-increasing demand for petroleum under conditions where new supply is increasingly difficult and expensive to find. Based on a forecast of energy requirements through 1985 and an evaluation of the roles to be played by the various energy components, the author concludes that the industry must add 250 to 300 billion bbl of proven crude oil reserves in order to meet the production goals forecast. As far as geological and engineering factors are concerned. the goal appears to be within reach of the industry. This belief, however, is strongly dependent on the assumption that the profitability of conventional exploration and production in the free foreign area will not decline substantially below its present level.

Introduction

The interest in projected world petroleum requirements is direct evidence of the increasing importance that oil people everywhere are attaching to planning for the future. Too often in the past we have concerned ourselves primarily with the current technical, operating and management aspects of the business. A stronger interest in future energy trends and petroleum's part is overdue. and it is an encouraging sign to see the industry giving more attention to this subject. The result will be improved effectiveness for the entire petroleum industry. Special attention to the future is more important today than it ever has been before because of the enormity and difficulty of the job that lies ahead-satisfying an ever- increasing demand for petroleum under conditions where new supply is increasingly difficult and expensive to find. One expression of the magnitude of this job is indicated in part of the title to this paper-that this is "a 300- billion-bbl challenge". If this number of "300 billion" is not sufficiently impressive by itself, let me point out that this is more than twice the amount produced in the Free World area in the last 100 years and is about equal to what the Free World industry can currently claim as proved remaining reserves. Before starting the detailed discussion, I want to point out some general qualifications that apply to the information that will be presented. First of all, it is inevitable that projections 20 years into the future involve a considerable amount of speculation. A forecast of energy requirements over such a period and an evaluation of the roles to be played by the various energy components depend, for example, upon population projections and on the interplay of political, economic and technological factors. Errors of estimation and differences in assumptions in these areas sometimes tend to compound and give rise to an increasingly divergent range of estimates as the forecast period is extended.

Energy Demand

Because our main interest lies in over-all petroleum requirements. I have intentionally included in the forecast some non-energy uses for petroleum such as lubes, asphalts. petrochemical feed stocks. etc. The volume of these materials is currently about 2 million B/D, and is expected to at least double in the forecast period. Including these volumes under the petroleum results in a slight overstatement of the role predicted for petroleum in a strict, primary-energy-market sense. In the period since 1950, Free World energy demand has been increasing at an average annual rate of about 4 per cent, from 30.7 million BOPD equivalent in 1950 to an expected 55.5 million B/D in 1965, as shown in Table 1. In the 20 years ahead. we expect, that with improved efficiency in fuel conversion and energy usage. the percentage rate of growth will decline slightly to an average of about 3.8 per cent per annum. Because of the constantly expanding energy base, however, the annual increments to energy demands will become progressively higher, and we estimate that the total energy demand by 1985 will reach a level of about 116 million bbl of oil equivalent daily. For perspective. let me add that, at this latter rate of consumption, today's proved oil and gas liquids reserves in the U. S. would satisfy the Free World's total appetite for energy for less than a full year.