Oil reserves

Oil reserves are the estimated quantities of crude oil that are claimed to be recoverable under existing economic and operating conditions. Many oil producing nations do not reveal their reservoir engineering field data, and instead provide unsubstantiated claims for their oil reserves.

In most cases, oil refers to conventional oil and excludes oil from coal and oil shale. Depending on the source, bitumen and extra-heavy oil (tar sands) may also be excluded. The exact definition varies from country to country and national statistics are not always comparable. The numbers disclosed by national governments are also often manipulated for political reasons.

The total amount of oil in an oil reservoir is known as oil in place. However, because of reservoir characteristics and limitations in petroleum production technology, 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 reserves to oil in place for a given field is often referred to as the recovery factor. The recovery factor of a 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 or water-flooding.

Because the geology of the subsurface cannot be examined directly, indirect techniques must be used to estimate the size and recoverability of the resource. While new technologies have increased the accuracy of these techniques, significant uncertainties still remain. In general, most early estimates of the reserves of an oil field are conservative and tend to grow with time. This phenomenon is called reserves growth.

Types of oil reserves
All reserve estimates involve some degree of uncertainty depending on the amount of reliable geologic and engineering data available and the interpretation of those data. The relative degree of uncertainty can be expressed by dividing reserves into two principle classifications - proved and unproved. Unproved reserves can further be divided into two subcategories - probable and possible to indicate the relative degree of uncertainty about their existence. The most commonly accepted definitions of these are based on those approved by the Society of Petroleum Engineers (SPE) and the World Petroleum Council (WPC) in 1997.

Proved reserves
Proved reserves are claimed with reasonable certainty (80% to 90% confidence) to be recoverable in future years by specified techniques. To meet this definition, the development scenario must have been defined and use known technology, and the scenario must be commercial under current economic conditions (prices and costs prevailing at the time of the evaluation). Industry specialists refer to this as P90 (i.e. having a 90% certainty of being produced). Proved reserves are also known in the industry as 1P.

Proved reserves are further subdivided into Proved Developed (PD) and Proved Undeveloped (PUD). PD reserves are reserves that can be produced with existing wells and perforations, or from additional reservoirs where minimal additional investment (operating expense) is required. PUD reserves require additional capital investment (drilling new wells, installing gas compression, etc.) to bring the oil and gas to the surface.

Proved reserves are the only type the U.S. Securities and Exchange Commission allows oil companies to report to investors. Companies listed on U.S. stock exchanges must substantiate their claims, but many governments and national oil companies do not disclose verifying data to support their claims.

Unproved reserves
Probable reserves are either unsubstantiated claims or based on median estimates of the accumulation that are more likely to be recovered than not (50% confidence). This can result from either better reservoir behaviour than expected under the proved category or additional investments to be decided over the medium to long term (three to ten years) using conventional techniques. Industry specialists refer to this as P50 (i.e. having a 50% certainty of being produced). Proved plus probable reserves are known in the industry as 2P.

Possible reserves ideally have a chance of being developed under favourable circumstances. Industry specialists refer to this as P10 (i.e. having a 10% certainty of being produced). Proved plus probable plus possible reserves are known in the industry as 3P.

Unproved reserves are used internally by oil companies and government agencies for future planning purposes.

Resources
A more sophisticated system of evaluating petroleum accumulations was adopted in 2007 by the Society of Petroleum Engineers (SPE), World Petroleum Council (WPC), American Association of Petroleum Geologists (AAPG), and Society of Petroleum Evaluation Engineers (SPEE). It incorporates the 1997 definitions for reserves, but adds categories for contingent resources and prospective resources.

Estimated reserves in order
The amount of oil in any particular oil field involves a degree of uncertainty until the last barrel of oil is produced and the last oil well is abandoned. The following estimates are the best that could be obtained using publicly available data, and the confidence in them varies greatly from country to country. Estimates in developed countries are generally much more accurate than those for undeveloped countries. For instance, reserves estimates in the United States are considered highly accurate, while those in Iraq are highly uncertain. In many countries (particularly OPEC producers) the estimates may involve a great deal of political influence. The raw data underlying reserves estimates is considered a state secret in some countries, so independent assessments of their reserves cannot be made.

Saudi Arabia
Claiming a quarter of the world's proven oil reserves and some of its lowest production costs, Saudi Arabia was producing around 9.2 Moilbbl/d of oil at the beginning of 2008. In spite of recent increases in oil income, Saudi Arabia faces serious long-term challenges, including high rates of unemployment, one of the world's fastest population growth rates (its population grew sixfold since 1960), and the need for political and economic reforms.

According to British Petroleum Statistical Review of World Energy, as of 2007 Saudi Arabia reported it had 264 Goilbbl of estimated oil reserves, around 21% of conventional world oil reserves. Since Saudi Arabia produced about 3.2 Goilbbl of oil in 2006, this would give it over 80 years of reserves at current rates of production.

Although Saudi Arabia has around 80 oil and gas fields, more than half of its oil reserves are contained in only eight fields, and more than half its production comes from one field, the Ghawar field. The raw data are not available to outside scrutiny.

A dissenting opinion regarding Saudi oil reserves came from Matthew Simmons who claimed in his 2005 book "Twilight in the Desert" that Saudi Arabia's oil production faces near term decline, and that it will not be able to consistently produce more than current levels. In addition to his belief that the Saudi fields have hit their peak, Simmons also argues that the Saudis may have irretrievably damaged their large oil fields by overpumping salt water into the fields in an effort to maintain the fields' pressure and thus make the oil easier to extract.

Since 1982 the Saudis have withheld their well data and any detailed data on their reserves, giving outside experts no way to verify the overall size of Saudi reserves and output. After US President Bush asked the Saudis to raise production on a visit to Saudi Arabia in January 2008, and they declined, Bush questioned whether they had the ability to raise production any more.

Canada


Including the portion of oil sands reserves considered by government regulators to be producible at current prices using current technology, Canada's proven oil reserves were estimated at 179 Goilbbl as of 2007, placing it second only to Saudi Arabia. Over 95% of these reserves are in the oil sands deposits in the province of Alberta. Although Alberta contains nearly all of Canada's oil sands and about 75% of its conventional oil reserves, several other provinces and territories, especially Saskatchewan and offshore Newfoundland, have substantial oil production and reserves. Total Canadian oil production was about 1.2 Goilbbl in 2006, giving Canada about 150 years of reserves at current production rates.

Over 99% of Canadian oil exports are sent to the United States, making Canada, not Saudi Arabia, the United States' largest supplier of oil. The picture is complicated somewhat by the fact that Canada has a highly sophisticated energy industry and is both an importer and exporter of oil and refined products. In 2006, in addition to producing 1.2 Goilbbl, Canada imported 440 Moilbbl, consumed 800 Moilbbl itself, and exported 840 Moilbbl to the U.S. The excess of exports over imports was 400 Moilbbl.

The addition of 174 Goilbbl of the vast Alberta oil sands deposits, mostly in the Athabasca Oil Sands, to proven reserves by the Alberta Energy and Utilities Board (AEUB), was controversial at the time because oil sands contain a semisolid form of oil referred to as bitumen by Canadian government authorities, rather than conventional crude oil. . The existence of the deposits (historically referred to as "tar sands") has been known for centuries since major rivers cut through the sands to reveal the bitumen in the river banks, but their development had to wait for high prices and the invention of new technology. In recent years technological breakthroughs have overcome the challenges of producing it and most Alberta oil is now non-conventional production from oil sands rather than conventional oil fields. The AEUB estimates that by 2016 Alberta oil sands production will triple to amount to 86% of the province's total oil production, and Alberta will by then be one of the largest oil producers in the world.

The difference between crude bitumen and crude oil is somewhat arbitrary since bitumen is really just an unusually thick and viscous grade of crude oil, and many U.S. oil refineries have been modified to handle it in recent years as domestic U.S. oil production declines. The main problem is that it must be heated or diluted with solvents before it will flow through pipelines.

A problem for companies trading on U.S. stock markets is that U.S. Securities and Exchange Commission (SEC) rules do not allow them to report oil sands production as an oil and gas activity, so they cannot report their oil sands reserves as oil reserves. Companies such as Petro-Canada with large oil-sands operations claim this can seriously underestimate the value of their assets. As of 2008 the SEC was reported to be looking at putting oil sands reserves on the same footing as conventional crude oil.



Analysts estimate that a price of $30 to $40 per barrel is required to make oil sands production profitable. With oil prices reaching $130per barrel as of 2008, oil sands production has become profitable enough to trigger over $100 billion worth of new oil sands projects. The biggest constraint on oil sands development is a serious labor and housing shortage in Alberta as a whole and the oil sands center of Fort McMurray in particular. According to Statistics Canada, by September, 2006 unemployment rates in Alberta had fallen to record low levels and per-capita incomes had risen to double the Canadian average. Another problem was that Canada was running out of pipeline capacity to ship rapidly increasing exports of oil to U.S. markets, and the National Energy Board warned that exporters could face pipeline apportionment by the third quarter of 2007.

An indicator of how the economics of oil sands had changed became apparent as of 2007 when Royal Dutch Shell stated in its annual report that in 2006 its Canadian oil sands unit made an after tax profit nearly double its worldwide profit on conventional crude. A few days later Shell announced it was going to build a $27 billion oil sands refinery near Edmonton, one of a string of oil sands upgrader announcements that could boost Canada's synthetic oil production to 3.46 Moilbbl/d by 2015.

As of 2006, Canada was the only major oil producer in the Organisation for Economic Co-operation and Development (OECD) showing an oil production increase. The other major OECD producers (the United States, United Kingdom, Norway and Mexico) were all in decline. According to the Conference Board of Canada, total crude oil production in Canada is projected to increase by over 10 percent in 2007, following an increase of 5 percent in 2006. As a result of new nonconventional oil projects, total crude oil production is forecast to increase by an average of 8.6 percent per year from 2008 to 2011.

Iran
Iran claims to have the world's third largest reserves of oil at approximately 136 Goilbbl as of 2007, although it ranks second if Canadian reserves of non-conventional oil are excluded. This is roughly 10% of the world's total proven petroleum reserves. Iran is the world's fourth largest oil producer and is OPEC's second-largest producer after Saudi Arabia. As of 2006 it was producing an estimated 3.8 Moilbbl/d of crude oil, equal to 5% of global production. At 2006 rates of production, Iran's oil reserves would last 98 years if no new oil was found.

Iranian production peaked at 6 Moilbbl/d in 1974, but it has been unable to produce at that rate since the 1979 Iranian Revolution due to a combination of political unrest, war with Iraq, limited investment, US sanctions, and a high rate of natural decline. Iran's mature oil fields are in need of enhanced oil recovery (EOR) techniques such as gas injection to maintain production, which is declining at an annual rate of approximately 8% onshore and 10% offshore. With its current technology it is only able to recover about 25% of the oil in place, 10% less than the world average. Iran consumed 1.6 Moilbbl/d of its own oil as of 2006. Domestic consumption is increasing due to a growing population and large government subsidies on gasoline, which reduces the amount of oil available for export and contributes to a large government budget deficit. Due to a lack of refinery capacity, Iran is the second biggest gasoline importer in the world after the United States. High oil prices in recent years have enabled Iran to amass nearly $60 billion in foreign exchange reserves, but have not helped solve economic problems such as high unemployment and inflation.

Iraq
Iraq claims to have the world's fourth largest reserves of oil at approximately 115 Goilbbl, although it would rank third if Canadian reserves of non-conventional oil were excluded.

As a result of war and civil unrest, these statistics have not been revised since 2001 and are largely based on 2-D seismic data from three decades ago. International geologists and consultants have estimated that unexplored territory may contain an estimated additional 45 to 100 billion barrels (bbls) of recoverable oil. However, in the absence of exploration data these estimates are highly speculative and do not meet the industry definitions of proven, probable, or possible oil reserves (see above).

A measure of the uncertainty about Iraq's oil reserves is indicated by the fact that the U.S. Department of Energy (DOE) estimated that Iraq had 112 Goilbbl, whereas the United States Geological Survey (USGS) estimated it was closer to 78 Goilbbl and Iraq's prewar deputy oil minister claimed it might have 300 Goilbbl. The source of the uncertainty is that due to decades of war and unrest, Iraq's western desert (which would contain almost all of the undiscovered oil), remains almost completely unexplored.

After more than a decade of sanctions and two Gulf Wars, Iraq’s oil infrastructure needs modernization and investment. Despite a large reconstruction effort, the Iraqi oil industry has not been able to meet hydrocarbon production and export targets. The World Bank estimates that an additional $1 billion per year would need to be invested just to maintain current production. Long-term Iraq reconstruction costs could reach $100-billion or higher, of which more than a third will go to the oil, gas and electricity sectors. Another challenge to Iraq's development of the oil sector is that resources are not evenly divided across sectarian lines. Most known resources are in the Shiite areas of the south and the Kurdish north, with few resources in control of the Sunni population in the center.

In 2006, Iraq's oil production averaged 2.0 Moilbbl/d, down from around 2.6 Moilbbl/d of production prior to the coalition invasion in 2003. At this rate of production, Iraq will have 158 years of reserves if no new oil is discovered.

Kuwait
Kuwait is OPEC's third largest oil producer and claims to hold approximately 104 Goilbbl, 8% of the world's world oil reserves. This includes half of the 5 Goilbbl in the Neutral Zone which Kuwait shares with Saudi Arabia. Most of Kuwait's oil reserves are located in the 70 Goilbbl Burgan field, the second largest conventional oil field in the world, which has been producing oil since 1938. Since most of Kuwait's major oil fields are over 60 years old, maintaining production rates is becoming a problem. The size of Kuwait's reserves came into question in 2006 when a leaked memo from the Kuwait Oil Company (KOC) indicated reserves were only half the size claimed. Kuwait produces about 2.6 Moilbbl/d which gives it about 100 years of reserves at current production rates.

United Arab Emirates
The United Arab Emirates (UAE) claims to have oil reserves of about 98 Goilbbl, almost as big as Kuwait's claimed reserves. Of the emirates, Abu Dhabi has most of the oil with 92 Goilbbl while Dubai has 4 Goilbbl and Sharjah has 1.5 Goilbbl. Most of the oil is in the the Zakum field which is the third largest in the Middle East with an estimated 66 Goilbbl. The UAE produces about 2.9 Moilbbl/d of total oil liquids, but has stated its intention to increase this to 5 Moilbbl/d by 2014. At current rates of production the UAE has about 93 years of remaining oil reserves.

Venezuela
Venezuela had 80 Goilbbl of conventional oil reserves as of 2007, the largest oil reserves of any country in South America. In 2006, it had net oil exports of 2.2 Moilbbl/d, the sixth-largest in the world and the largest in the Western Hemisphere. In recent years, crude oil production has been falling, mostly due to depletion of existing oil fields and, since many of its oil fields suffer production decline rates of at least 25 percent per year, industry analysts estimate that Venezuela must spend some $3 billion each year just to maintain production levels. As a result of the lack of transparency in the country's accounting, Venezuela's true level of oil production is difficult to determine, but most industry analysts estimate that it produced around 2.8 Moilbbl/d of oil in 2006 This would give it 88 years of remaining production at current rates.

In October 2007 the Venezuelan government said its proven oil reserves had risen to 100 Goilbbl. The energy and oil ministry said it had certified an additional 12.4 Goilbbl of proven reserves in the country's Faja del Orinoco region.

In addition to conventional oil, Venezuela has oil sands deposits similar in size to those of Canada (approximately equal to the world's reserves of conventional oil). Venezuela's Orinoco tar sands are less viscous than Canada's Athabasca oil sands – meaning they can be produced by more conventional means, but they are buried deeper – meaning they cannot be extracted by surface mining. Estimates of the recoverable reserves of the Orinoco Belt range from 100 Goilbbl to 270 Goilbbl. However, they are not generally considered proven reserves since Venezuela lacks enough technological expertise and capital to develop them on a sufficiently large scale.

Venezuela's development of its oil reserves has been affected by political unrest in recent years. In late 2002 nearly half of the workers at the state oil company PDVSA went on strike, after which the company fired 18,000 of them. In the opinion of many industry analysts this affected its ability to maintain its oil fields and has contributed to declines in oil production. The crude oil that Venezuela has is very heavy by international standards, and as a result much of it must be processed by specialized domestic and international refineries. Venezuela continues to be one of the largest suppliers of oil to the United States, sending about 1.4 Moilbbl/d to the U.S. Venezuela is also a major oil refiner and the owner of the Citgo gasoline chain.

Russia
Estimates of proven reserves vary wildly. Most estimates include only Western Siberian reserves, exploited since the 1970s and supplying two-thirds of Russian oil, and not potentially huge reserves elsewhere.

Following the collapse of the former Soviet Union, Russia’s oil output fell sharply, and has rebounded only in the last several years. Russia reached a peak of 12.5 Moilbbl/d in total liquids in 1988, but production fell to around 6 Moilbbl/d in the mid 1990's. A turnaround in Russian oil output began in 1999, which many analysts attribute to the privatization of the industry. Higher world oil prices, the use of Western technology, and the rejuvenation of old oil fields also helped. As of 2006 Russian production had recovered to 9.7 Moilbbl/d and is expected to continue increasing. Eastern Siberia is one area where little exploration has taken place and as of 2007 it was estimated that another 35 Moilbbl of oil exist in the region.

As of 2006, Russia produced roughly 9.8 Moilbbl/d of liquids, consumed roughly 2.8 Moilbbl/d in liquids, and exported (in net) around 7 Moilbbl/d. Over 70 percent of Russian oil production was exported, while the remaining 30 percent was refined locally.

Libya
Libya holds the largest oil reserves in Africa and the ninth largest oil reserves in the world with 41.5 Goilbbl as of 2007. Oil production was 1.8 Moilbbl/d as of 2006, giving Libya 63 years of reserves at current production rates if no new reserves were to be found. Libya is considered a highly attractive oil area due to its low cost of oil production (as low as $1 per barrel at some fields), and proximity to European markets. Libya would like to increase production from 1.8 Moilbbl/d in 2006 to 3 Moilbbl/d by 2010–13 but with existing oil fields undergoing a 7–8% decline rate, Libya's challenge is maintaining production at mature fields, while finding and developing new oil fields. Most of Libya remains unexplored as a result of US sanctions and disagreements with foreign oil companies.

Nigeria
Although Libya has more reserves, Nigeria with 36.2 Goilbbl of proven reserves as of 2007 ranks as the largest oil producer in Africa and the 11th largest in the world, averaging 2.28 Moilbbl/d as of 2006. At current rates this would be 43 years of supply if no new oil was found. Pipeline vandalism, kidnappings, and militant takeover of oil facilities have reduced production, which could be increased to 3 Moilbbl/d in the absence of such problems. The Nigerian government hopes to increase oil production capacity to 4 Moilbbl/d by 2010. Nigeria is the world’s eighth largest exporter of crude oil and sends 42% of its exports to the United States. Nigeria is heavily dependent on the oil sector, which accounts for 95% of its export revenues.

United States


United States proven oil reserves declined to a little less than 21 Goilbbl as of 2006 according to the Energy Information Administration, a 46% decline from the 39 Goilbbl it had in 1970 when the huge Alaska North Slope (ANS) reserves were booked. With production of around 5 Moilbbl/d as of 2006, this represents about an 11 year supply of oil reserves at current rates of production.

If the United States had to supply its entire demand of 21 Moilbbl/d without resorting to foreign imports, existing US reserves would last only three years at the current rate of consumption.

No oil fields of similar size to the ANS reserves have been found in the US since 1970. With over 2.3 million wells having been drilled in the US since 1949, there are very few unexplored areas left where a similar size oil field is likely to be found. US oil reserve numbers are very accurate compared to those of most other countries.

As a result of the decline in reserves, United States crude oil production also has been declining for nearly 30 years. Production peaked in 1970 at 9.6 Moilbbl/d, but declined 47% to 5.1 Moilbbl/d by 2006. At the same time, US imports of oil and petroleum products increased by 400% from 3.4 Moilbbl/d in 1970 to 13.6 Moilbbl/d in 2006. The largest suppliers of oil and products in 2006 were Canada and Mexico, which supplied 2.3 and 1.7 Moilbbl/d, respectively.

Imports of oil and products account for nearly half of the US trade deficit. As of 2007, the Energy Information Agency (EIA) of the US Department of Energy projected that in 2007 oil consumption would rise to 20.9 Moilbbl/d, while oil production would fall to 5.1 Moilbbl/d, meaning that oil consumption would be nearly four times as high as oil production.

In April 2008, the United States Geological Survey (USGS) released a report giving a new resource assessment of the Bakken Formation underlying portions of Montana and North Dakota. The USGS believes that with new horizontal drilling technology there is somewhere between 3.0 and 4.5 Goilbbl of recoverable oil remaining to be discovered in this 200000 sqmi formation that was initially discovered in 1951. If accurate, this reassessment would make it the largest continuous oil formation ever discovered in the U.S. However, it would represent only a five to seven month supply of oil for the United States at current (2007) rates of consumption.

Oil shale
The United States has the largest known deposits of oil shale in the world, according to the Bureau of Land Management and holds an estimated 2,500 gigabarrels of potentially recoverable oil, enough to meet U.S. demand for oil at current rates for 110 years. However, oil shale does not actually contain oil, but a waxy oil precursor known as kerogen. For this reason and because there is not yet any significant commercial production of oil from oil shale in the United States as of 2008, its oil shale reserves do not meet the petroleum industry definition of proven oil reserves.

Mexico
The Oil and Gas Journal (OGJ) estimated that as of 2007, Mexico had 12.4 Goilbbl of proven oil reserves. Mexico was the sixth-largest oil producer in the world as of 2006, producing 3.71 Moilbbl/d. However, at that rate its oil reserves represent only a 9 year supply of oil, and Mexican oil production has started to decline rapidly. The US Energy Information Administration estimates that Mexican production will decline to 3.52 Moilbbl/d in 2007 and 3.32 Moilbbl/d in 2008.

While there may be more oil fields elsewhere in Mexico, the constitution of Mexico gives the state oil company, PEMEX, a monopoly over oil production, and the Mexican government treats Pemex as a major source of revenue. As a result, Pemex has insufficient capital to develop the resources on its own, and cannot take on foreign partners to supply money and technology it lacks. To address some of these problems, in September 2007, Mexico’s Congress approved reforms including a reduction in the taxes levied on Pemex.

Since 1979, Mexico has produced most of its oil from the supergiant Cantarell Field, which is the second-biggest field in the world by production. Because of falling production, in 1997 PEMEX started a massive nitrogen injection project to maintain oil flow, which now consumes half the nitrogen produced in the world. As a result of nitrogen injection, production at Cantarell rose from 1.1 Moilbbl/d in 1996 to a peak of 2.1 Moilbbl/d in 2004. However, during 2006 Cantarell's output fell 25% from 2.0 Moilbbl/d in January to 1.5 Moilbbl/d in December, and as of 2007 the decline was continuing.

As for its other fields, 40% of Mexico's remaining reserves are in the Chicontepec Field, which was found in 1926. The field has remained undeveloped because the oil is trapped in impermeable rock. The remainder of Mexico's fields are smaller, more expensive to develop, and contain heavy oil and trades at a significant discount to light and medium oil, which is easier to refine.

In 2002 PEMEX began developing an oil field called "Proyecto Ku-Maloob-Zaap", located 105 kilometers from Ciudad del Carmen. It is estimated that by 2011 the field will produce nearly 800 koilbbl/d. However, this level of production will be achieved by using a nitrogen injection scheme similar to that of Cantarell.

In June, 2007 former U.S. Federal Reserve Chairman Alan Greenspan warned that declining oil production in Mexico could cause a major fiscal crisis there, and that Mexico needed to increase investment in its energy sector to prevent it.

Arctic reserves
Arctic basins tend to be richer in natural gas than in oil. The abundance of gas in the Arctic so far from main markets will require moving gas long distances. Problems of ensuring that oil and gas keep flowing freely in Arctic subsea pipelines are virtually identical to those experienced at a depth of 8000 ft in the Gulf of Mexico, where temperatures are at or close to the freezing point (at that pressure) along the seafloor where hydrates can form. Technology for moving oil from the seafloor to the shore is similar to that employed in Norway, and may someday have application in Alaska.

Some large oil companies believe Arctic waters, including those of northern Alaska, hold great potential as an oil and natural gas frontier. Most of these basins are unexplored and undeveloped. The social, environmental, and economic aspects of development will be challenging.

Canada
Extensive drilling in the Canadian Arctic by such companies as Petro Canada and Dome Petroleum discovered significant oil reserves, but not enough to justify an oil pipeline to southern Canada or the United States. All the oil wells which were drilled have since been abandoned. Currently, the Arctic ice pack makes the shipping season too short to justify shipping oil out by tanker, but it is possible future global warming could melt the Arctic ice pack and make tanker shipment feasible. In 2007 the Canadian Navy announced its intention to build eight new Arctic patrol vessels to assert sovereignty over its Arctic waters in anticipation of such an eventuality.

Greenland
Greenland is believed to have some of the world’s largest remaining oil reserves. Prospecting is taking place under the auspices of NUNAOIL, a partnership between the Greenland Home Rule Government and the Danish state. U.S. Geological Survey found in 2001 that the waters off north-eastern Greenland could contain up to 110 Goilbbl of oil which compares to half of the known reserves in Saudi Arabia. This amount of oil, distributed on the just 57,000 inhabitants, would mean tens of millions of dollars per Greenlander. Many Greenlanders hope that oil finds can trigger independence or more advanced self-government. In March 2008, the Greenlandic Self-Government Commission concluded its work after two years of negotiations between the Home Rule Government and Danish bodies, the future distribution of oil revenues between the Home Rule Government and the Kingdom of Denmark being a major issue.

Middle Eastern reserves
There are varying estimates of how much oil is left in Middle Eastern reserves. Several oil companies and the U.S. Department of Energy state that the Middle East has two-thirds of all the world's oil reserves. Other oil experts, however, argue that the Middle East has two-thirds of only all proven oil reserves, and that the percentage of all oil reserves it has could be much lower than two-thirds. The U.S. Geological Survey says that the Middle East has only between half and a third of the recoverable oil reserves in the world.

Suspicious official estimates of oil reserves from OPEC countries
The OPEC countries decided in 1985 to link their production quotas to their reserves. What then seemed wise provoked important increases of the estimates in order to increase their production rights. This also permits the ability to obtain bigger loans at lower interest rates. This is a suspected reason for the reserves rise of Iraq in 1983, then at war with Iran.

In fact, Dr. Ali Samsam Bakhtiari, a former senior executive of the National Iranian Oil Company, has stated unequivocally that OPEC's oil reserves (notably Iran's) are grossly overstated. In an interview to Bloomberg in July 2006, he stated that world oil production is now at its peak and predicted that it will fall 32% by 2020.

The world's total declared reserves are 1.3174 trillion barrels (January 2007). The years 2004 and 2007 were added later. Some figures from the year 2007 are missing because these are from a listing in the Oil and Gas Journal from dec. 2006, which listed only the top ten suppliers. The table suggests that, firstly, the OPEC countries declare that the discovery of new fields, year after year, replaces exactly or near exactly the quantities produced, because the declared reserves do not vary a lot from one year to the other. For example, Saudi Arabia extracted 9.55 Moilbbl/d in 2005, i.e. 3.4 Goilbbl/a. Yet, their stated reserves do not decline, implying that they discover previously unknown reserves of exactly this amount, year after year. Abu Dhabi, in the United Arab Emirates, declares exactly 92.3 Goilbbl since 1988, but in 16 years, 14 Goilbbl were extracted.

Also, there is much competition between states. For example, Kuwait gave to themselves 90 Goilbbl of reserves in 1985, the year of the reserves link. Abu Dhabi and Iran responded with slightly higher numbers, to guarantee similar production quotas. Iraq replied with around 100. Apparently, with all this amount of inflation, Saudi Arabia was forced to reply, two years later, with its own revision.

Other examples suggest the inaccuracy of official reserve estimates:
 * January 2006, the magazine Petroleum Intelligence Weekly declared that reserves of Kuwait were in fact only 48 Goilbbl, of which only 24 Goilbbl were "completely proven", backing this statement on "leaks" of official confidential Kuwaiti documents. The value is half of the official estimate.


 * Shell company announced 9 January 2004 that 20% of its reserves had to pass from proven to possible (uncertain). This announcement led to a loss in the value of the stock; a lawsuit challenged that the value of the company was fraudulently overvalued. Shell later revised its reserves estimates three times, reducing them by 10.133 Goilbbl (against 14.5 Goilbbl). Shell's president, Phil Watts, resigned.
 * As can be seen on the table the reserves declared by Kuwait before and after the Gulf War 1990-1991 are the same, 94 Goilbbl, despite the fact that immense oil-well fires ignited by the Iraqi forces had burned off approximately 6 Goilbbl.
 * In 1970, Algeria increased its "proven reserves" estimate (until then 7 - 8 Goilbbl) to 30 Goilbbl. Two years later, the estimate was increased to 45 Goilbbl. After 1974, the country's estimate was less than 10 Goilbbl (as reported by Jean Laherrère).
 * Pemex (state company of Mexico) in September 2002 decreased its reserve estimate by 53%, from 26.8 to 12.6 Goilbbl. Later the estimate was increased to 15.7 Goilbbl.
 * Other examples exist of reserves being underestimated. In 1993, the reserves of Equatorial Guinea were limited to some insignificant fields; the Oil And Gas Journal estimated them at 12 Moilbbl. Two giant fields and several smaller ones were discovered, but the numbers announced stayed unchanged until 2003. In 2002, the country still had 12 Moilbbl of reserves according to the journal, while it was producing 85 Moilbbl in the same year. The reserves of Angola were at 5.421 Goilbbl, (four significant numbers, it gives the impression of great precision) from 1994 to 2003, despite the discovery of 38 new fields of more than 100 Moilbbl each.

Note however that the definition of proven reserves varies from country to country. In the USA, the conservative rule is to classify as proven only the reserves that are being produced[cn]. On the other hand, Saudi Arabia classifies as proven reserves known fields not yet in production[cn]. Venezuela includes non-conventional oil (bitumens) of the Orinoco in its reserve base.

2020 Vision
The US EIA (Energy Information Administration) reduced their forecast for Saudi Arabia oil production to 15.4 Moilbbl/d in 2020 and Middle East OPEC countries increasing to 35.2 Moilbbl/d by 2020 from 20.7 Moilbbl/d in 2002. These estimates were further reduced in the 2006 Annual Energy Outlook, in which Middle East OPEC production was projected to be 29.4/27.0/18.5 million barrels a day in 2020 assuming $34/$51/$85 oil prices respectively.

Strategic oil reserves
Many countries maintain government-controlled oil reserves for both economic and national security reasons. Although there are global strategic petroleum reserves, the following highlights the strategic reserves of the top three oil consumers.

The United States maintains a Strategic Petroleum Reserve at four sites in the Gulf of Mexico, with a total capacity of 727 Moilbbl of crude oil. The sites are enormous salt caverns that have been converted to store crude oil. The US SPR has never been filled to capacity; the largest amount reached thus far was 700 Moilbbl on August 17, 2005, whereafter reserves were drawn down to meet demand in the aftermath of Hurricane Katrina. This reserve was created in 1975 following the 1973–74 oil embargo, and as of 2005 it is the largest emergency petroleum supply in the world. At current US consumption rates (over 7 Goilbbl per year), the SPR would supply all normal US demand for approximately 37 days.

In 2004 China's National Development and Reform Commission (NDRC) began development on a 101.9 Moilbbl strategic reserve. This strategic reserve plan calls for the construction of four storage facilities. An updated strategic reserve plan was announced in March 2007 for the construction of a second strategic reserve with an additional 209.44 Moilbbl. Separately, Kong Linglong, director of the National Development and Reform Commission's Foreign Investment Department, said that the Chinese government would soon move to establish a government fund aimed at helping its state oil groups purchase offshore energy assets.

As of 2003 Japan has a SPR composed of the following three types of stockpiles; state controlled reserves of petroleum composed of 320 Moilbbl, privately held reserves of petroleum held "in accordance with the Petroleum Stockpiling Law" of 129 Moilbbl, privately held reserves of petroleum products for another 130 Moilbbl. The state stockpile equals about 92 days of consumption and the privately held stockpiles equal another 77 days of consumption for a total of 169 days or 579 Moilbbl.

OPEC countries
Many countries with extensive oil reserves are members of the Organization of the Petroleum Exporting Countries, or OPEC. The members of the OPEC cartel hold about two-thirds of the world's oil reserves, allowing them to significantly influence the international price of crude oil.