Oil megaprojects are large oil field projects to bring a significant amount of new oil production capacity to market. Tabulations of oil megaprojects are used to forecast whether future global oil supply will meet demand for oil, or whether the world will reach Peak Oil. As such, oil megaproject analysis is controversial. This approach to oil forecasting is also known as the "bottom-up" approach, in that it relies on building a detailed model of where and when new oil production capacity will come online.
In a series of studies reported in the media, the energy consultancy Cambridge Energy Research Associates (CERA) argued, beginning in May 2005, that oil production capacity would increase by as much as between 2004 and 2010 - almost a 20% increase. They suggested this might lead to an excess of supply over demand by as much as , which could lower oil prices, perhaps below $40 per barrel. In a July 2005 Op-Ed in the Washington Post, CERA President Daniel Yergin asserted that, based on the "large, unprecedented buildup of oil supply in the next few years", that "the growing production capacity will take the air out of the fear of imminent shortage. Again in mid 2006, CERA concluded based on an analysis of 360 projects that global oil production capacity might increase to by 2015.
In contrast, a series of project tabulations and analyses by Chris Skrebowski, editor of Petroleum Review, have presented a more pessimistic picture of future oil supply. In a 2004 report, based on an analysis of new projects over 100 thousand barrels/day (kbd), he argued that although ample supply might be available in the near-term, after 2007 "the volumes of new production for this period are well below likely requirements." By 2006, although "the outlook for future supply appears somewhat brighter than even six months ago", nonetheless, if "all the factors reducing new capacity come into play, markets will remain tight and prices high. Only if new capacity flows into the system rather more rapidly than of late, will there be any chance of rebuilding spare capacity and softening prices."
Several issues, explained at greater length in this article, account for the differences. First, to the extent lists of projects are incomplete, erroneous conclusions may be drawn. Second, real world considerations such as project delays may cause inaccurate inferences from projects. Finally, in addition to tabulating new capacity, researchers and analysts must also model the decline of existing capacity, and differing assumptions about such decline will lead to differing conclusions. In addition to an overview of these issues, this article includes a detailed tabulation of projects (maintained by the Wikipedia Oil Megaprojects task force) which readers may use to draw their own conclusions about future oil supply.
The principle of Megaproject-based forecasting is simple: the analyst sums up the capacity of all the new projects coming on in a given year, and uses this total to assess whether oil supply will be adequate. However, a number of factors complicate this simple picture. First, and most importantly, the existing production capacity will change for various reasons even before the addition of the new capacity. The most significant reason for this is declines - the tendency of oil wells to gradually produce less oil over time as the field suffers from Oil depletion and water (typically) intrudes into the field. However, other factors are important too: some oil production capacity may be spare (deliberately unused), and variations in the amount of spare capacity can cause production to change without any new capacity being added to the market. Furthermore, accidents, natural disasters, wars, and revolutions can affect production of oil.
Additionally, projections of new capacity in the future are subject to uncertainty. Large oil production projects are complex and massive engineering projects often carried out in difficult places - in very deep water, in remote parts of the world, in very cold or very hot areas, or in areas subject to political or bureaucratic barriers to business activity. As such, they frequently get delayed or even cancelled. Even when projects are not cancelled, it is still typical that a new project does not reach full capacity on the first day after it comes on stream. Typically, a project reaches first oil when it first delivers any production to the market, then ramps up over a period of months or years until it reaches plateau at the capacity of the facilities to process oil. It stays on plateau for years to decades, and then begins a period of decline, before eventually being closed down permanently when it is no longer economic to produce the tiny available oil supply. Megaprojects are generally tabulated by when they reach first oil, but it is important to bear in mind that because of ramp-up, full production will not be reached for some time.
Any oil supply forecast based on megaproject capacity must, explicitly or implicitly, model these factors in order to translate capacity into production.
The idea of tabulating the largest projects (Megaprojects) was historically justified because the observed oilfield size distribution is well described by a Parabolic fractal distribution, and thus the smallest fields, even in aggregate, do not contribute a large fraction of the total. For example, a relatively small number of giant and super-giant oilfields are providing almost half of the world production. Therefore, it is generally convenient to gather information only on a few large projects and then model the depletion from the rest of the resource base composed of small oilfields. As time has gone on, however, Megaproject lists have tended to include smaller and smaller projects.
The most important variable is the average decline rate for Fields in Production (FIP) which is difficult to assess.
This article is accompanied by a series of tabulations of oil supply first coming on stream in each year from 2003 to 2020. These have been compiled by an exhaustive search of oil company annual reports and press releases. It is important to understand the methodology used in creating these tables, or in the summary graphs and tables presented in the present article. These include:
Significant is defined here as capable of producing at least 40,000 barrels of oil per day. This list of megaprojects completes this list of oil fields from the past and present. Maintaining an updated list of future oil projects is key to the forecasting of future oil supply, and assessing the date and seriousness of peak oil.
The detailed tables for each year can be accessed through these links, and are summarized below.
Volumes shown are in thousand barrels per day. The summary table below is produced by a Perl script parsing each annual tables. This script is not run everyday so some discrepancies may appear (last update: 15-AUG-2008).
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