The twilight of big oil

By Juan Jesús Bermúdez
The specialized magazine Energy Policy has published in the first quarter of this year an article by researchers from the Swedish University of Uppsala, Mikael Höök and Kjell Aleklett, and Robert Hirsch, an expert in ...

The specialized magazine Energy Policy has published in the first quarter of this year an article by researchers from the Swedish University of Uppsala, Mikael Höök and Kjell Aleklett, and Robert Hirsch, an expert in energy contingencies, in which they describe the decline of large oil fields, and their impact on world production, in the immediate future.

The authors remind us that of the giant fields, barely 500 - which represents about 1% of those existing in the World - 65% of conventional oil is extracted today (close to 90% of total production). Actually, the concentration is even greater, since only 20 fields pump 25% of the crude oil. The authors of this analysis state that "the global production of giant oil fields is already declining, because most of the largest fields are more than 50 years old, and since the 1960s each decade fewer and fewer have been discovered with that extraction capacity."

Although the geological decline of a field is, obviously, linked to a multitude of factors (techniques used, political conflicts, wars, global economic situation, etc.), the scientists affirm, based on the study of the behavior of a good part of these fields, that the rate of decline of the same could be around 5.8-6.5% per year, although it would be higher for oil fields outside the OPEC countries, around 7% per year.

According to the publication, oil decline rates accelerate over time, and this also seems to be confirmed for the giants, and even more so, curiously, for those giant fields discovered fewer years ago, that is, exploited with more "efficient" techniques: paradoxically, contrary to what is thought, the "technique" increased depletion, by taking advantage of the subsoil resource more efficiently, exhausting it sooner... The scholars calculate that 80% of the oil that comes from giant fields in 2030 will have extraction decrease rates of around 10% per year, that is, in clear terminal decline.

To compensate for this decline, explorations of smaller fields have been activated in recent decades. Until these years, the discoveries of these had compensated for the decline of the large ones, although it seems that this situation cannot be prolonged any longer. In addition, these oil fields, from which less than 100,000 barrels per day are extracted, tend to decline much more rapidly than the large ones.

Finally, and as a main conclusion, Höok, Aleklett and Hirsch estimate that "around the year 2030 the production of oil fields from which crude oil is extracted today will be approximately half of what it is today, so the struggle to maintain production and compensate for the decline with new fields will be increasingly difficult, even more so when the decline rates will increase with the passage of the years."

It seems, therefore, if these scenarios are confirmed, that the oil production plateau initiated since the end of 2004 may give way in the immediate future to a growing decline in our main energy resource.