R/€ = 15.16Change: -0.03
R/$ = 13.35Change: -0.02
Au 1156.06 $/ozChange: -2.88
Pt 981.00 $/ozChange: 2.00
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?

And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters About Us
RSS Feed
Article   Comments   Other News   Research   Magazine  
Oct 04, 2012

Opec believed to overstate oil reserves by 70%

New York|Toronto|Gas|Mining|Petroleum|Systems|transport|Saudi Arabia|Venezuela|Cumulative Oil Production|Equipment|Oil|Oil Prices|Oil Reserve Statements|Oil Reserves|Oil Shortages|Oil-producing Countries|Stated Oil|Stated Recoverable Oil Reserves|Systems|Brent Giles|Drilling|Rick Nariani|Fracturing
© Reuse this

TORONTO ( – Analysts at a New York-based research firm believe that the Organisation of the Petroleum Exporting Countries’ (Opec’s) global oil reserve statements could be inflated by as much as 70%.

Global oil prices are expected to dramatically spike from the end of the decade as a result of depletion, and continue to dramatically rise into the future as a result of oil-producing countries being unable to replace reserves fast enough, research specialist Lux Research analysts told Mining Weekly Online on Thursday.

Researchers said the known oil reserves of Opec members would be depleted much sooner than thought, owing to many of the member countries producing much more oil than what they could sustain over the long term.

Oil, gas and mining analyst Rick Nariani said Opec’s stated reserves skyrocketed from 878-billion barrels to 1.2-trillion barrels throughout the 1980s and 1990s, without any new significant discoveries being made. With cumulative oil production of 449-billion, the true reserves for Opec could be as low as 428.94-billion, which would result in global price shocks by 2020.

He explained certain Opec members were deliberately increasing their stated oil reserves to flout Opec regulations, which allowed oil-producing countries to only produce oil at a rate calculated as a certain percentage of its total reserves.

“We now know that the numbers are significantly inflated. The model we have built from available data shows that Opec reserve statements could be overstated by as much as 70%,” Nariani said.

Nariani, who is co-authoring a report, ‘The Race to Replace Reserves’, which is due for publication during the next couple of weeks, told Mining Weekly Online that the official figures did not add up. He said that given certain new discoveries of oil, such as in Venezuela and certain technological advances which allow for previously uneconomical known deposits to be exploited, many Opec countries continued to increase their oil reserves, without announcing any new discoveries, and, all that while producing significant amounts of oil.

Nariani and report co-author Brent Giles believe global oil reserves would be depleted much sooner than thought. 

Global stated recoverable oil reserves, including conventional and unconventional sources, total 1.65-trillion barrels, or 54 years of supply. If one adjusted the remaining oil reserves for population growth and nominal increases to per capita consumption rates, oil shortages could occur 18 years earlier than that, the analysts said.

That means global oil shortages within 36 years. For example, Saudi Arabia had already admitted to oil reserves declining by 8% a year since 2004, the analysts said.

However, Giles held that global oil consumption, driven higher by the increasing wealth of developing Asian and African countries, would overtake production by 2020, resulting in significant price instability.

He pointed to the need for global production to significantly increase by 2035 to meet demand, and this would need significant new reserves coming on line.

“In order for the oil companies to meet future oil demand, they would have to replace current reserves at a rate of 5.4% a year. This would allow for a supply of oil for about another 90 years,” Giles said.

On its website, Opec said its "member countries have made significant additions to their oil reserves in recent years, for example, by adopting best practices in the industry, realising intensive explorations and enhancing recoveries".

The organisation held its proven oil reserves currently stood at "well above 1.19-trillion barrels".


The researchers said technology would be critical to unlocking potential from resource reserves, such as the 4.6-trillion barrels of oil shale deposits found in American soil. New techniques and technological applications would play an increasingly critical role in discovering new reserves.

Under these technological advances counted advanced materials for drilling equipment, fluids and additives at high pressure and temperature, targeted delivery and the controlled release of chemicals and materials, alternative fracturing techniques, enhanced recovery and beneficiation, advanced proppants, down-hole and reservoir sensors and brine and nonconventional mining systems.

The discovery of shale gas had also transformed the fossil fuel industry, with many oil-dependent applications being able to switch to cleaner and cheaper natural gas.

“There is today a lot more natural gas than previously thought. This is a good fuel source with abundant supply for still a very long time,” Nariani said.

The analysts said new technology would lead the way to also make it economical to produce from previously uneconomical reserves.

Further, Giles pointed out that the demand for oil could also be significantly reduced, particularly within the transport industry where the advent of clean technology is only now starting to materialise.

Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines (150 word limit)
Other Energy News
Chevron South Africa chairperson Shashi Rabbipal
Energy company Chevron South Africa has appointed Shashi Rabbipal as its new executive chairperson. He would lead the company’s corporate governance team, steer the company’s continued progress on transformation and focus on establishing and maintaining relationships...
Water is a crucial driver of the economy in South Africa and with its being on the verge of demand exceeding supply globally, the World Economic Forum has ranked water third in the most concerning global risks.
South Africa-based combustion company The Combustion Group (TCG) has been appointed by global energy solutions company Caterpillar’s gas turbine businesses Turbomach and Solar Turbines Incorporated as its South African representative that will market its products in...
Latest News
South African Airways (SAA) has enhanced its partnership with the airline’s in-flight duty-free concessionaire Tourvest Inflight Retail Services (TIRS), enabling Voyager members to earn miles when buying duty-free products and spend their miles when shopping for...
South Africa's new visa regulations are having an adverse impact on the country's tourism industry without proof that they are making any impact on child trafficking, according to Hussein Dabbas, International Air Traffic Association (Iata) regional vice-president...
The Council for Scientific and Industrial Research (CSIR) has developed a semi-autonomous solution for early pothole detection to potentially replace the often time-consuming expensive manual road inspection. Showcasing the Visual Surveying Platform (VSP), CSIR...
Recent Research Reports
Liquid Fuels 2015: A review of South Africa's liquid fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2015 Report examines these issues in the context of South Africa’s business environment; oil and gas exploration; fuel pricing; the development of the country’s biofuels industry; the logistics of transporting liquid fuels; and...
Road and Rail 2015: A review of South Africa's road and rail sectors (PDF Report)
Creamer Media’s Road and Rail 2015 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail infrastructure and network, the funding and maintenance of these respective networks, and...
Defence 2015: A review of South Africa's defence sector (PDF Report)
Creamer Media’s Coal 2015 report examines South Africa’s coal industry with regards to the business environment, the key participants in the sector, local demand, export sales and coal logistics, projects being undertaken by the large and smaller participants in the...
Real Economy Year Book 2015 (PDF Report)
There are very few beacons of hope on South Africa’s economic horizon. Economic growth is weak, unemployment is rising, electricity supply is insufficient to meet demand and/or spur growth, with poor prospects for many of the commodities mined and exported. However,...
Real Economy Insight: Automotive 2015 (PDF Report)
Creamer Media’s Real Economy Year Book comprises separate reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, gold, iron-ore and platinum sectors.
Real Economy Insight: Water 2015 (PDF Report)
Creamer Media’s Real Economy Year Book has been divided into individual reports under the banner Real Economy Insight and investigates key developments in the automotive, construction, electricity, road and rail, steel, water, coal, gold, iron-ore and platinum sectors.
This Week's Magazine
BUSINESS LEADERS PANEL Adam Craker, Ivor Chipkin, Alan Hosking and Allon Raiz at the 6th IQ Business Active Growth conference
At the sixth IQ Business conference held in Sandton last month, a panel of business leaders and academics advocated that business reclaims the initiative to spur growth in South Africa amid fragmented and haphazard political direction. Management consulting firm IQ...
The building industry is an essential component of the South African economy as it contributes about 15% to the gross fixed investment that drives the economy. However, with the country’s economy going through a tough time currently, this, in turn, reflects on the...
The recipients of the 2015 South African National Energy Association (Sanea)/South African National Energy Development Institute Energy (Sanedi) Awards were announced at a ceremony and banquet in Sandton last month. Sanea chairperson Brian Statham named Exxaro CEO...
ASHER BOHBOT EOH’s corporate goals were originally aspirations, but the company is relevant and is making a difference in the territories it operates in
As South African information technology (IT) firm EOH posted another full year of strong growth, CEO Asher Bohbot, known for his frank words, people-centric management style and stoic humanism, attributed the company’s continued South African and African growth to...
International heavy-equipment engine manufacturer Cummins’ regional distribution centre (RDC) in Woodmead, Gauteng, has halved the average logistics distribution time for clients in Southern Africa and allowed for critical or long-lead stock to be kept closer to...
Alert Close
Embed Code Close
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $96 Close
Subscribe Now for $96