Petroleum Review has re-presented the BP Statistical Review data (of which I am so fond), and concluded that, based on the data, that the rate of decline globally is more than 1 M barrels per day.
The write-up is pithy, and worth a read (link above). Here are some selections from the commentary:
The most dramatic change to be seen in the latest BP statistics is the way the 32 countries where production is still expanding are having to produce ever faster to make up for the 18 countries where decline is into at least its third year. Overall production growth in 2003 at 2.71mn b/d (3.66%) was one of the five largest annual volume increments seen since 1973. However unlike all the earlier production surges, countries with declining output were a significant factor in 2003. Because the 18 countries in sustained decline ‘lost’ production of 1.14mn b/d (–4.91%) this meant those still expanding had to increase production by 3.82mn b/d (7.52%) in order to achieve an overall production growth of 2.71mn b/d (3.66%).
Comparing average annual percentage changes over one, two and three years clearly indicates that, for the majority of the producers in decline, the rate of decline is increasing. The most dramatic example is Gabon, where, averaged over the last three years, decline is running at over 8%/y – but over the last year by over 18%. This and the other data tends to undermine the widely held view that decline rates tend to slow as depletion progresses.
Sustained large-scale production decline by an increasing numbers of countries means that the burden on countries with expansion potential increases, as the volumes lost to depletion have to be made up before any incremental demand can be met.
For global oil production to move into decline—in other words to peak—all that is required is for the volume lost in the declining countries to exceed the gains made in countries where production is still expanding.
Analysis of this year’s oil production statistics leads to the conclusion that declining production and depletion is now a significant influence and that rapid production increases are sustainable in only a limited number of countries.
What this year’s BP statistics confirm is that, if the world is to get the oil production it is likely to require, a great deal of additional investment will have to take place.
And that is the optimistic scenario. Alarm bells should be going off in every automaker’s boardroom. This isn’t the end of petroleum, but is sure is going to get more expensive over the next few years. $50 a barrel may look like a bargain.