2012
GEOSCIENCE ASSIGNMENT
CLASS B
WORLD OIL AND GAS
RESERVES: FUTURE SUPPLY
AND PROSPECTS
A brief summary of the dynamics that are shaping current oil and gas production as well as a peep in to
the future of the energy resources.
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EXECUTIVE SUMMARY
Oil and gas are the resources that fuel modern civilization. Both oil and gas were formed
millions of years ago as a result of decomposition of organic matter in the earth’s sub surface.
The fact that oil and gas reserves are only stored in locations that fulfill some basic geological
features makes their exploration and production limited to only certain regions of the world. The
proven reserves of oil and natural gas are currently estimated at about 1.5 trillion barrels and 196
trillion cubic meters respectively. The Middle East alone sits on top of about 54% of the
currently proven reserves. With oil consumption currently estimated at about 88 million barrels
per day (mbpd), there are legitimate concerns that future supply of both oil and gas could be in
jeopardy due to decline in average size of modern oil field discoveries and rapid depletion of
existing reservoirs. This has led experts in the industry to debate the imminence of “oil peaking”
and gradual decline afterwards. To manage the negative consequences of shortfall in future oil
and gas supplies, various mitigation options are being proposed. These include; conservation in
energy use, development of renewable sources of energy; improved oil recovery techniques; oil
exploration in the arctic region; and exploration of unconventional sources such as tar sands,
heavy oil, gas shale, etc.
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Contents
EXECUTIVE SUMMARY .................................................................................................................................. 1
1.0
INTRODUCTION ................................................................................................................................. 3
2.0 WORLD OIL AND GAS RESERVES ............................................................................................................. 4
2.1 WORLD OIL AND GAS BASINS ............................................................................................................. 4
2.2 RESERVES ESTIMATES ......................................................................................................................... 7
Proved Reserves .................................................................................................................................... 8
Probable Reserves................................................................................................................................. 8
Possible Reserves .................................................................................................................................. 8
3.0 FUTURE SUPPLY AND PROSPECTS ........................................................................................................... 9
3.1 PEAK OIL ............................................................................................................................................ 11
Factors That Could Impact Oil Peaking ............................................................................................... 13
3.2 MITIGATION OPTIONS....................................................................................................................... 14
Exploring unconventional sources ...................................................................................................... 14
Drilling in the Arctic............................................................................................................................. 19
Improved Oil Recovery (IOR)............................................................................................................... 20
4.0 CONCLUSION ......................................................................................................................................... 22
Bibliography ................................................................................................................................................ 23
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1.0 INTRODUCTION
The purposeful production of oil that started about 150 years ago has led to a tremendous
improvement in global civilization. Today, oil could arguably be described as the lifeline of
modern civilization. Oil and gas are the main sources of energy for bulk of world’s transportation
system – automobiles, trucks, airplanes, etc. A significant amount of global electricity supply is
also produced from oil and gas. Aside meeting energy needs, oil and gas also serve as the
primary feedstock for the manufacture of many chemicals that are essential to modern life.
Geologists have studied and identified the basic geological features that make up a good oil and
gas reservoir – source rocks, reservoir rocks, seals and traps. The occurrence of these geological
features exists only in some locations around the world, and hence oil and gas reserves are
unevenly distributed around the globe. The regions that hold bulk of the proven oil and gas
reserves in the world are the Middle East, Latin America, Africa and Eastern Europe/Eurasia.
The Organization of Petroleum Exporting Countries (OPEC) estimates the world proven Oil and
Natural Gas reserves at about 1.5 trillion barrels and 196 trillion standard cubic meter of gas
respectively. The Middle East alone accounts for about 54% of the resources.
Although the current proven oil and gas reserves appear to be huge, the rate of consumption of
these resources is growing at increasingly fast rates. The challenge becomes even more when the
declining average size of modern oil discoveries and the rate of depletion in conventional oil
fields are considered. It is against this backdrop that the proponents of “Peak Oil” argue that
peaking in oil production and subsequent decline is imminent in the future. It is however not
clear when this peaking will occur.
Mitigating options are, therefore, not only important but necessary in order to guard against
catastrophic unforeseen circumstances that could occur in the future due to oil shortage. Possible
areas that are currently generating interest include conservation in energy use; improved oil
recovery; exploration of unconventional sources (oil shale, tar sands, etc); development of
renewable sources of energy and oil exploration in the arctic region.
This short report aims to give a summary of the current world view about global oil and gas
reserves as well as future supply and prospects.
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2.0 WORLD OIL AND GAS RESERVES
Both crude oil and natural gas were formed millions of years ago as a result of the decomposition
of organic matter trapped in sediments and subjected to high temperature and pressures the
within the subsurface of the earth. The basic geological features that make up a good reservoir
are: (i) Oil and Gas source rocks (ii) Reservoir rocks (iii) Seals and, (iv) Traps. Oil exploration
activities over the years have helped in mapping out oil and gas locations around the world. It
has been observed that these two important resources are unevenly distributed in the world. Most
of the regions with potential reserves are located around the former USSR, Middle East, North
Africa, Asia Pacific and some other areas around the world.
The Organization of Petroleum Exporting Countries (OPEC) estimates the world proven Oil and
Natural Gas reserves at about 1.5 trillion barrels and 196 trillion standard cubic meter of gas
respectively.
This section of the report provides briefs about the world oil and gas basins as well as reserves
estimates.
2.1 WORLD OIL AND GAS BASINS
There are about 570 petroleum basins as well as 560 large and significant oil and gas fields.
There are 1 trillion tons of discoverable oil in about 100 million km² of sedimentary rocks on
earth (70% on continental masses and the rest under the ocean).
According to Guoyo Li, scientific analysis of the trends of the global oil industry shows the
following:

84%-88% of conventional and non-conventional oil resources remain unexplored and
undeveloped

Of all the explored reserves, only about 30% of original oil in place has been developed.
Generally oil and gas basins are classified by their sedimentary cover, plate tectonic settings,
stress history, geometry and subsistence characteristics. The classification based on geometry
describes basins as symmetrical, assymetrical , platformal and triangular.
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Concentrations of reserves within particular age ranges reflect development of two major
categories of basins: (1) marine platform basins, which were dominant in the Devonian, Jurassic,
and Cretaceous periods, and (2) rapidly subsiding basins, which were dominant in the late
Tertiary and probably during the Late Carboniferous.
Paleozoic reserves (North America and Europe) are related to stable-platform environments;
Mesozoic and Tertiary reserves are in the Mesogean (Tethyan) realm, passive margins, and the
western American mobile belts. The Mesogean realm contains 69% of the world oil and gas
reserves and reflects the history of repeated opening and closing of the Mesogea ocean that
resulted in several phases of basin development. Comparative isolation favored preservation of
organic matter. Hydrocarbon reserves generally decrease as the ages of the reservoir and source
rocks increase.
Hydrocarbons and the global basin classification system have important connections. After a
basin has been classified, its similarities or differences with other basins may be compared.
Prolific hydrocarbon basins are categorized, and the plays are compared to specific tectonic and
depositional events. Some plays are controlled by basin-initiating tectonic events, such as interior
fracture or interior sag, and the type of sedimentation inherent in each basin type. In more
complex poly-history basins, oil and gas plays are commonly associated with combinations of
various cycles, or by basin-modifying tectonics such as episodic wrenching, subsidence, fold
belts, and basin tilt. Interior fracture basins include some of the most prolific interior sag basins,
interior fracture basins, margin sag basins, margin sag-interior sag basins, wrench or shear basins
and trench-associated basins.
Major petroleum provinces or basins of the world include the following:
Asia: West Siberia, East Siberia, Karakum, South Caspian, Fergana, Junggar,Tarim, Songliao,
Persian Gulf, Central and South Sumatra
Africa: Suez, Sirte, Trias, Ciefara, Illiizi, Niger Delta, Tano
Europe: North sea, Drieper-Donets, Volga-Urals, Caspian
Oceania: Cooper, Bowen, Surat, Crippsland, Taranaki
North America: Alberta, Permian, Gulf of mexico
Latin America: Maracaibo, East Venezuela, Putomayo (Nakicenovic, 1998)
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Figures 1 and 2 give the locations of global oil and natural gas endowments respectively.
Fig 1: Global crude oil endowment areas
Fig 2: Global Natural gas endowment areas
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2.2 RESERVES ESTIMATES
The total estimated amount of oil in an oil reservoir, including both producible and nonproducible oil, is called oil in place. However, because of reservoir characteristics and limitations
in petroleum extraction technologies, only a fraction of this oil can be brought to the surface, and
it is only this producible fraction that is considered to be reserves. The ratio of producible oil
reserves to total oil in place for a given field is often referred to as the recovery factor. Recovery
factors vary greatly among oil fields. The recovery factor of any particular field may change over
time based on operating history and in response to changes in technology and economics. The
recovery factor may also rise over time if additional investment is made in enhanced oil recovery
techniques such as gas injection, surfactants injection, water-flooding, or microbial enhanced oil
recovery.
Ultimately Recoverable Reserves (URR) is an estimate of the total amount of oil that will ever be
recovered and produced. It is a subjective estimate in the face of only partial information. Whilst
some consider URR to be fixed by geology and the laws of physics, in practice estimates of URR
continue to be increased as knowledge grows, technology advances and economics change.
Economists often deny the validity of the concept of ultimately recoverable reserves as they
consider that the recoverability of resources depends upon changing and unpredictable
economics and evolving technologies.
The ultimately recoverable resource is typically broken down into three main categories:
cumulative production, discovered reserves and undiscovered resource.
Cumulative production is an estimate of all of the oil produced up to a given date.
Reserve figures are broken into two primary categories according to theoretical accuracy: proved
and unproved. Unproved reserves carry more uncertainty, and are further broken into "probable
reserves" and "possible reserves", the latter of which has a lower probability of being recovered.
Discovered reserves are an estimate of future cumulative production from known fields and are
typically defined in terms of a probability distribution. Discovered reserves are typically broken
down into proved, probable and possible reserves.
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Proved Reserves
Although there is no single, commonly accepted technical definition of proved reserves, a
commonly used description is as follows: "the estimated quantities of oil which geological and
engineering data demonstrate with reasonable certainty to be recoverable in future years from
known reservoirs under current economic and operating conditions".
A probability cut-off of 90% is sometimes used to define proved reserves, i.e. the proved
reserves of a field are defined as having a better than 90% chance of being produced over the life
of the field. In this sense, proved reserves are a conservative estimate of future cumulative
production from a field.
Probable Reserves
After an oil exploration firm conducts a seismic survey of a piece of land, it obtains the proven
and probable reserves in that area. Probable reserves are those which have a 50% chance of
being present. For example if an oil company believes that there is decent chance of a successful
drilling operation, they would classify those reserves as "probable."
If a reserve is considered probable, only 50% of the expected recovery amount is factored into
the total reserve. Oil companies are often valued based on a PP (proven + probable) reserve ratio
basis. Probable reserves vary from possible reserves, which only have a 10% chance of full
extraction.
Probable reserves have been variously designated as 'indicated' or P50 reserves, the latter
referring to reserves which are estimated to have a better than 50% chance of being technically
and economically producible.
Possible Reserves
This is an estimate of the amount of oil or natural gas reserves that may be available for
extraction. Possible reserves have been designated as 'inferred' reserves, sometimes referred to as
P10 or P20 reserves – i.e. including reserves which, at present, cannot be regarded as 'probable',
but which are estimated to have a significant, but less than 50 per cent chance of being
technically and economically producible.
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In general, a portion of a field's probable and possible reserves tend to get converted into proved
reserves over time as operating history reduces the uncertainty around remaining recoverable
reserves: an aspect of the phenomenon referred to as 'reserves growth'.
Like reserves, undiscovered resource is also defined typically in terms of a probability
distribution. Estimates of 'yet-to-find' resource are made based on a range of geological,
technological and economic factors.
The world proven crude oil and natural gas reserves by region are given in Table 1.
Table 1: World proven crude oil and natural gas reserves by region (2011 estimates)
Region
Oil Reserve Estimates (million Natural
barrels)
Estimates
Gas
Reserve
(billion
standard cubic meter)
North America
25,582
9,900
Latin America
340,782
7,903
Eastern Europe and Eurasia
126,994
7,903
Western Europe
12,648
4,817
Middle East
796,845
79,575
Africa
128,578
14,715
Asia and Pacific
50,097
16,394
Total (World)
1,481,526
196,163
3.0 FUTURE SUPPLY AND PROSPECTS
In recent years, there has been extensive interest about the determinants of future world oil and
gas supply. Some experts argue that due to declining average size of modern oil discoveries and
the rate of depletion in conventional oil fields, the growth rate in oil use could overtake available
conventional resources in the future. These concerns seem to be further strengthened by current
high oil prices and the low level of spare oil-production capacity worldwide. Other professionals
on the other hand suggest that advances in oil exploration and drilling technology would expand
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potential frontier resources and greatly reduce the costs of exploiting them. They argue that these
technologies could be used in areas that are newly reopened to the international industry, such as
the former Soviet Union, China, and the Persian Gulf, to provide potentially higher supplies.
Political, social, and economic factors also play a critical role. The question is not just whether
there will be enough oil under the ground but whether the political, social, and economic
environment in oil-producing regions will facilitate or hinder the development of this oil wealth
(Baker, 2000).
Future world recoverable reserves are the sum of the oil remaining in existing reservoirs plus the
reserves to be added by future oil discoveries. Future oil production will be the sum of
production from older reservoirs in decline, newer reservoirs from which production is
increasing, and yet-to-be discovered reservoirs.
Owing to high oil prices, oil companies have conducted extensive exploration over that period,
but their results have been disappointing. If this trend continues, there is little reason to expect
that exploration success will dramatically improve in the future. This situation is evident in
Figure 1, which shows the difference between annual world oil reserves additions and annual
consumption. It could be inferred from the figure that the world is gradually moving from a long
period in which reserves additions were much greater than consumption, to an era in which
annual additions are falling increasingly short of annual consumption. This is one of the most
obvious trends that suggest the world is indeed approaching an inevitable peaking of
conventional oil production (Hirsch, Bezdek, & Wendling, 2005).
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Figure 3: Net Difference between Annual World Oil Reserves Additions and Annual
Consumption
3.1 PEAK OIL
Geologists point out that oil is a finite resource in the earth’s crust, and at some future date,
world oil production will reach a maximum -- a peak – after which production will decline. This
is a direct deduction from what happens to individual oil reservoirs. Normally, output from oil
reservoirs rises after discovery, reaches a peak and then starts to decline. Oil reservoirs have
lifetimes typically measured in decades, and peak production often occurs roughly a decade or so
after discovery. It is important to recognize that oil production peaking is not “running out.”
Peaking is a reservoir’s maximum oil production rate, which typically occurs after roughly half
of the recoverable oil in a reservoir has been produced. In many ways, what is likely to happen
on a world scale is similar to what happens to individual reservoirs, because world production is
the sum total of production from many different reservoirs (Hirsch, Bezdek, & Wendling, 2005).
Since the beginning of the modern oil era in the mid 1800s, there have been speculations about
peaking world oil production. Initially, predictions of peaking were mainly based on guesswork
due to little knowledge of petroleum geology. Over time, geological understanding improved
significantly and guessing gave way to more informed projections, although the knowledge base
is fraught with numerous uncertainties even today. Past predictions typically fixed peaking in the
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succeeding 10-20 year period. Most such predictions were wrong, which does not however
negate that peaking will someday occur. Obviously, it cannot be concluded with certainty if
recent forecasts are wrong until predicted dates of peaking pass without incident.
Several experts predict that peaking of the world production of conventional oil could occur in
the relatively near future. Such projections are however fraught with uncertainties largely
because of poor data, political and institutional self interest, and other complicating factors. The
implication is that no one knows with certainty when world oil production will reach a peak, but
geologists have no doubt that such a period will occur. Table 2 shows some of the predictions
made regarding world oil production peaking.
Table 2: Predictions of World Oil Production Peaking
Projected Date
Source of Projection
2006 – 2007
Bakhitari
2007 – 2009
Simmons
After 2007
Skrebowski
Before 2009
Deffeyes
Before 2010
Goodstein
Around 2010
Campbell
After 2010
World Energy Council
2010 – 2020
Laherrere
2016
EIA (nominal)
After 2020
CERA
2025 or later
Shell
No visible peak
Lynch
Source: (Hirsch, Bezdek, & Wendling, 2005)
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Factors That Could Impact Oil Peaking
A number of factors could have considerable effect in either alleviating or exacerbating the
problem of world oil peaking (Hirsch, Bezdek, & Wendling, 2005).
Factors that could impact positively on the Problem of Oil Peaking
1. World oil reserves are much larger than publicly stated.
2. A number of new super-giant oil fields are found and brought into production well
before oil peaking might otherwise have occurred.
3. High world oil prices over a sustained period induce higher energy efficiency.
4. The developed nations (such as the US and Western Europe) and highly populated
countries such as India and China decide to implement efficient fuel utilization standards
well before world oil peaking.
5. A slowdown in both world economic and population growth rates leading to lesser oil
demand in the future than currently anticipated.
6. Oil prices stay at a high enough level on a sustained basis so that industry begins
exploring alternative fuels well before oil peaking.
7. Huge new reserves of natural gas are discovered, a portion of which is converted to
liquid fuels.
8. Some kind of scientific breakthrough comes into commercial use, mitigating oil demand
well before oil production peaks.
Factors that could impact negatively on the Problem of Oil Peaking
1. World reserves are much less than stated.
2. Political instability in major oil producing countries results in unexpected, sustained
world-scale oil shortages.
3. Large-scale, sustained Middle East political instability hinders oil production.
4. Demand of luxurious, larger, less fuel-efficient cars and SUVs increases.
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3.2 MITIGATION OPTIONS
Global oil consumption is expected to rise by about 60% between now and 2020. Of all uses of
oil, transportation would be the fastest growing oil-consuming sector; and as a result, global
consumption of gasoline could double (The future of oil). Figure 3 also clearly shows that world
reserves additions are gradually being overwhelmed by consumption. It therefore becomes
necessary to consider and vigorously pursue the development of alternatives to conventional oil
and natural gas. Some of the options available to mitigate shortfall in future supply of
conventional oil and gas include:
i.
Exploring unconventional sources such as shale oil, tar oil, heavy oil deposits, etc.
ii.
Vigorous oil exploration in the arctic region, which was hitherto considered a difficult
terrain.
iii.
Developing improved technologies for maximum recovery of existing fields.
Other possible options could include conservation in energy use as well as development of
alternative sources of energy such as renewable.
Exploring unconventional sources
a) Oil Shale
Oil shale is commonly defined as a fine-grained sedimentary rock containing organic matter that
yields substantial amounts of oil and combustible gas upon destructive distillation (Dyni, 2005).
Oil shale is an organic-rich fine-grained sedimentary rock containing significant amounts of
kerogen (a solid mixture of organic chemical compounds) from which technology can extract
liquid hydrocarbons (shale oil) and combustible oil shale gas.
Lithologically, oil shale covers a broad range of rocks from shale to marl and carbonates, which
forms a mixture of tightly bound organic and inorganic materials (Altun, Hicyilmaz, Hwang,
Suat Bagci, & Kok, 2006). Oil shale is characterized by a low calorific value and high ash and
mineral content (Brendow, 2003).
The general composition of oil shale is given in the Figure 4 (Altun, Hicyilmaz, Hwang, Suat
Bagci, & Kok, 2006).
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OIL SHALE
INORGANIC
MATRIX





BITUMENS
Quartz
Feldspar
Clays (mainly illites and Chlorites)
Carbonates (Calcite and Dolomites)
Pyrite and Others
KEROGEN


Insoluble in CS2
Contains V, U, Fe, Ni and MO
Fig 4: Composition of oil shale
Just like in the case of conventional oil, oil shale resources are concentrated in a few countries.
However, while this is true geologically, economically it is not: due to the size of the
occurrences, even “small” deposits can be huge related to the energy needs of the country
concerned (Brendow, 2003). Table 3 gives oil shale reserves and production figures.
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Table 1: Economic oil shale reserves and production as reported by World Energy Council
Region/Country
Recovery Proven
Proved
Average Estimated
Method
Oil
recoverable shale oil Additional Production
Shale
oil
Reserves potential
( x 106 (
x
tons)
tons)
500
Africa/Morocco
Surface
12300
Africa/S. Africa
In-Situ
73
N.America/USA
Surface
3340000
yield
Oil
in 1999
Kg
Potential
(
106 oil/ton
(
x
80000
50 – 64
5400
–
-
57
62000
-
70
9646
195
Surface
Asia/Thailand
In-Situ
18668
810
50
-
Asia/Turkey
Surface
1640
269
56
-
Europe/Albania
Surface
6
Surface
590
In-Situ
910
Europe/Ukraine
In-Situ
2674
300
126
Middle East/Israel
Surface
15360
600
62
Middle East/Jordan Surface
40000
4000
100
20000
-
Oceania/Australia
32400
1725
53
35260
5
In-Situ
103
106 tons)
S.America/Brazil
Europe/Estonia
x
Oil
tons)
10
60000
Shale
5
151
167
6200
-
b) Oil Sands/ Tar Sands
Oil sands, tar sands or, more technically, bituminous sands, are a type of unconventional
petroleum deposit.The oil sands are loose sand or partially consolidated sandstone containing
naturally occurring mixtures of sand, clay, and water, saturated with a dense and extremely
viscous form of petroleum technically referred to as bitumen (or colloquially tar due to its similar
appearance, odour and colour). Oil produced from bitumen sands is often referred to as
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unconventional oil or crude bitumen, to distinguish it from liquid hydrocarbons produced from
traditional oil wells (Centre for Energy, 2002).
Canada has the largest reserves of tar oil in the world with about 70.8% (176.8 Billion Barrels)
of the reserves. Other countries with large reserves of tar oil are Kazakhstan and Russia (Attanasi
& Meyer, 2010).
Most of the oil sands in Canada are located in three major deposits in Alberta. These are:

The Athabasca-Wabiskaw oil sands of north northeastern Alberta

The Cold Lake deposits of east northeastern Alberta

The Peace River deposits of northwestern Alberta
In Kazakhstan, the oil sand deposits are located in the North Caspian basin. In Russia, the
deposits are located in:

Tunguska Basin

Volga-Urals Basin

Timan-Pechora Basin
Tar sands are mined and processed to generate oil similar to oil pumped from conventional oil
wells, but extracting oil from tar sands is more complex than conventional oil recovery. Oil
sands recovery processes include extraction and separation systems to separate the bitumen from
the clay, sand, and water that make up the tar sands. Bitumen also requires additional upgrading
before it can be refined. Because it is so viscous (thick), it also requires dilution with lighter
hydrocarbons to make it transportable by pipelines (About Tar Sand).
c) Heavy Oil and natural Bitumen
Among the different unconventional sources, heavy crude oil and natural bitumen are perhaps
the most readily available to supplement short- and long-term needs. Heavy oil is asphaltic and
contains asphaltenes and resins. It is "heavy" (dense and viscous) due to the high ratio
of aromatics and
naphthenes to paraffins (linear alkanes)
and
high
amounts
of
NSO's
(nitrogen, sulfur, oxygen and heavy metals). It also has a higher percentage of compounds with
over 60 carbon atoms and hence a high boiling point and molecular weight. Heavy oil is, by
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definition, oil with API gravity between 10°API and 20°API inclusive and a viscosity greater
than 100 cP. Natural Bitumen is oil whose API gravity is less than 10° and whose viscosity is
commonly greater than 10,000 cP.
Heavy oil has long been exploited as a source of refinery feedstock, but has commanded lower
prices because of its lower quality relative to conventional oil. The abundance of unconventional
oil is a great factor that can mitigate the dwindling conventional oil reserves. The greatest
challenge however, is the method of producing unconventional oil due to its physical and
chemical properties.
World over, heavy oil and natural bitumen are found in large deposits in different basins of the
world and in different geographical locations. The total resources of heavy oil in known
accumulations are 3,396 billion barrels of original oil in place, of which 30 billion barrels are
included as prospective additional oil. The total natural bitumen resource in known
accumulations amounts to 5,505 billion barrels of oil originally in place, which includes 993
billion barrels as prospective additional oil. This resource is distributed in 192 basins containing
heavy oil and 89 basins with natural bitumen. Large quantities of heavy crudes have been
discovered in the Americas including Canada, Venezuela and California. The largest reserves of
heavy crude oil in the world are located north of the Orinoco river in Venezuela, the same
amount as the conventional oil reserves of Saudi Arabia, but 30 or more countries are known to
have reserves.
Today, heavy oil belt extraction use similar production technologies as in situ oil sands:
 Primary Recovery

Cold heavy oil production with sand (CHOPS). Both sand and oil are recovered with
progressing cavity pumps. Recovery factors range from 3 to as high as 12 percent using this
technology.

Horizontal well technologies – typically applied to areas of the heavy oil belt with lighter
gravity crudes, similar recoveries to CHOPS.
 Secondary recovery

Water and polymer flooding are used in lower viscosity reservoirs.
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
Thermal (CSS – Cyclic Steam Simulation and steam drive) – CSS followed by steam drive
has been used since the early 1980’s.
New methods promise to unlock more of the oil in place and extend the world’s heavy oil
production for many more decades. These new methods are now being piloted either as primary
production methods or as a follow-up process after primary:

Hybrid Steam solvent processes and solvent only processes – Adding solvent to the steam
injection or solvent alone increases recovery and reduces energy use. A number of projects
are being piloted in the region, including a project that injects solvent only.

In situ Combustion – this process combusts the heavy oil in the reservoir, mobilizing the oil;
effectively combusting about 10 percent the oil to produce the rest. It is possible that
combustion could be used in the thinner reservoirs prevalent in the heavy oil region.
Drilling in the Arctic
The Arctic is a polar region located at the northern-most part of the Earth. The Arctic consists of
the Arctic Ocean and parts of Canada, Russia, Denmark (Greenland), Norway, the United States
(Alaska), Sweden, Finland, and Iceland. The Arctic region consists of a vast, ice-covered ocean,
surrounded by treeless permafrost. The area can be defined as north of the Arctic Circle (66°
33'N), the approximate limit of the midnight sun and the polar night (Arctic, 2009).
The United States Geological Survey estimates that 22 percent of the world's oil and natural gas
could be located beneath the Arctic (United States Congress, 2010).
There are 19 geological basins making up the Arctic region (Figure 5). Some of these basins
have experienced oil and gas exploration, most notably the Alaska North Slope where oil was
first produced in 1968 from Prudhoe Bay. However, only half the basins - such as the Beaufort
Sea and the West Barents Sea - have been explored.
A 2008 United States Geological Survey estimates that areas north of the Arctic Circle have 90
billion barrels of undiscovered, technically recoverable oil (and 44 billion barrels of natural gas
liquids) in 25 geologically defined areas thought to have potential for petroleum. This represents
13% of the undiscovered oil in the world. Of the estimated totals, more than half of the
undiscovered oil resources are estimated to occur in just three geologic provinces - Arctic
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Alaska, the Amerasia Basin, and the East Greenland Rift Basins (United States Geological
Survey, 2008).
Fig 5: United States Geological Survey Hydrocarbon Map of the Arctic Region
Among the greatest uncertainties in future energy supply and a subject of considerable
environmental concern is the amount of oil and gas yet to be found in the Arctic. The exploration
of the Arctic for petroleum is more technically challenging than for any other environment.
However, with increases in technology and continuing high oil prices the region is now receiving
the interest of the petroleum industry.
Several companies, especially shell are drilling successfully in the arctic. Indeed, Shell
announced the completion of its 2012 drilling season in the Arctic in October 2012.
Improved Oil Recovery (IOR)
IOR comprises the various methods used to increase oil production and to expand the volume of
recoverable oil from the reservoir. The several options available include horizontal drilling,
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advanced reservoir characterization, enhanced oil recovery (EOR), and a variety of other
methods that can increase the flow and recovery of liquid hydrocarbons.
Enhance Oil Recovery (EOR), also known as tertiary recovery, provides a viable opportunity to
increase production from existing reservoirs. EOR usually comes after both primary and
secondary recovery options have been exhausted. In primary production, oil flows naturally to
the surface due to high pressure in the sub surface. This occurs during the early stages of oil
production. Further production leads to decrease in the sub surface structure, which prompts the
use of secondary recovery in order to sustain the flow of oil. In secondary recovery, water is
injected into the reservoir to force additional oil to the surface.
EOR has been practiced since the 1950s in various conventional oil reservoirs, particularly in the
United States. The process that likely has the largest worldwide potential is miscible flooding
wherein carbon dioxide (CO2), nitrogen or light hydrocarbons are injected into oil reservoirs
where they act as solvents to move residual oil.
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4.0 CONCLUSION
1. Oil and gas reserves are preferentially located in some regions of the world, with the
Middle East holding the most significant part.
2. Reserve figures are broken into two primary categories according to theoretical accuracy:
proved and unproved. The proven reserve implies the estimated quantities of oil which
geological and engineering data demonstrate with reasonable certainty to be recoverable
in future years from known reservoirs under current economic and operating conditions
3. Hundreds of petroleum basins around the world store proven reserves of about 1.5 trillion
barrels and 196 trillion cubic meters of crude oil and natural gas respectively.
4. Oil and gas basins are generally classified by their sedimentary cover, plate tectonic
settings, stress history, geometry and subsistence characteristics.
5. There are legitimate concerns that oil shortage is imminent due to declining oil
discoveries and rapid depletion of reservoirs on one hand and the ever increasing growth
in consumption of oil and gas resources on the other hand.
6. Geologists are of the opinion that oil production will reach a maximum, from whence it
will begin to decline. There are however, divergent views about the timing of this
peaking in oil production.
7. Some of the options available to mitigate shortfall in future supply of conventional oil
and gas include; conservation in current energy use, exploration of unconventional
sources, oil and gas exploration in the arctic, improved technologies for maximum
recovery as well as development of alternative energy sources such as renewables.
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