Slide 10 of 20
1. One of the primary differences among recent estimates of recoverable oil resources, (e.g., the USGS’s 3 trillion barrels and Campbell-Laherrere’s 1.8 trillion barrels) can be understood by use of the “original oil-in-place” concept, as shown in the graph.
2. Original oil-in-place is the total resource base without regard to recoverability; it is essentially geologic in nature. The oil recovery factor (expected ultimate recovery divided by original oil-in-place) indicates what percent of the total resource can be recovered. Ultimately, the actual percentage recovered is significantly driven by complex economic and technological considerations.
3. Recoverable resources include cumulative production, proved reserves, undiscovered reserves, and reserves growth in discovered fields.
4. As a hypothetical illustration, assume that the original world oil-in-place is 6 trillion barrels, as shown in this graph. Campbell and Laherrere’s 1.8 trillion barrel recoverable resource estimate (right column) would imply a 30 percent recovery factor, mostly comprised of cumulative production and proved reserves.
5. But the USGS 3 trillion barrel recoverable resource estimate (left column) would imply a recovery factor of 50 percent. Because cumulative production and proved reserves constitute 1.6 trillion barrels, the additional 1.4 trillion barrels comes from reserves growth in discovered fields and from undiscovered resources.
6. Application of the original oil-in-place concept shows that recoverable resource estimate variations have corresponding differences in recovery factors, for example. These differences often stem more from differing economic and technological assumptions than from geologic issues.