outlook crude oil estimated 2035

outlook crude oil estimated 2035

There are other sources of crude oil that could be developed preferentially over heavy crude. These include shale oil, which is rapidly increasing production in North America, the low-cost resources in Iraq and Brazilian pre-salt discoveries. Because costs are so important, this outlook presents cost data in detail for Canadian oil Sands and for the Orinoco Belt in Venezuela, the two most important sources of incremental non-conventional heavy crude production. Costs were also compiled for shale oil, Brazilian pre-salt developments, and Middle Eastern heavy and mediumheavy oil developments which are representative of the costs in the region.

Country     Projects     Initial Investment (US$ Million)     Initial Reserves (Million Barrels) $ per barrel

Canada     Oil Sands Average     3,731     578     8.10
Venezuela     Orinoco Belt Average     14,932     1,207     14.94
Congo     Tchikatanga-Makolas     4,290     150     28.60
United States     Nikaitchuq Offshore Alaska     2,000     220     9.09
U.K. North Sea     Mariner and Bressay     10,700     600     17.83
Iran     South Azadegan     2,000     1,640     1.22
Saudi Arabia     Manifa     11,000     10,000     1.10
Brazil     Papa Terra     5,200     380     13.68
Brazil     Pre-Salt     250,000     14,300     17.48
United States     Shale Oil Wells Average     7.61     0.525     14.49
Source: Hart Energy complied from operating company information

The initial investment, estimated reserves and the cost in US$ per barrel of reserves are tabulated for selected projects in Table I.1. The first three are non-conventional bitumen and extra-heavy crude developments; for the Canadian and Venezuelan projects, the costs are the average of the projects analyzed in this report. The next six are conventional heavy oil projects by definition but, with the exception of the two Middle Eastern projects, are located offshore in deep water or in harsh environments. The last two are light oil. The Brazilian pre-salt reservoirs are located in over 7,000 feet of water and another 16,000 to 17,000 feet below the seabed. Shale oil is a non-conventional source that is rapidly increasing supplies in North America. Such resources are located in every region of the world and appear to be cost competitive with other non-conventional sources.

As Table I.1 indicates, non-conventional extra-heavy oil and bitumen in Venezuela and Canada are no more costly than pre-salt oil and shale oil. The project in Congo is more costly because of the remote location and lack of infrastructure. The offshore conventional heavy oil developments in the North Sea and Brazil cost more but are still competitive. Thus, cost alone will not defer heavy oil development. Other factors such as external energy and water use, with the associated environmental impacts, could serve to deter investment in heavy oil in some parts of the world. However, the primary factor in whether heavy oil is developed at the pace suggested in the longterm outlook of this report will depend on how fast oil demand continues to grow, the oil price and how fast new light oil sources, such as Iraq and the Brazilian pre-salt developments, come online.

The volume of heavy oil entering the export market increases to 4.5 million b/d by 2015 and declines thereafter in the short- and medium-term project scenario as more producing countries increase heavy oil processing capacity. The heavy crude on the export market decreases to 4.3 million b/d by 2020 and 3.3 million b/d by 2030. In the long-term scenario, heavy crude entering the export market continues to increase, despite growing domestic processing capacity in producing countries, reaching 6.0 million b/d by 2025 and remaining at approximately that level through 2035.

oil prices and production prediction 2035

oil prices and production prediction 2035

While oil demand grew faster than expected in 2010, it is growing more slowly in 2011. Actual oil demand growth in 2010 was higher than forecasted at the beginning of the year, causing the International Energy Agency (IEA) to revise its outlook upward by 300,000 b/d for 2011. In August 2011, the agency tempered its growth expectations by revising its forecast downward by 100,000 b/d, citing several of the aforementioned factors. OPEC also revised its forecast downward by 150,000 b/d. Though the downgrades represent only a fraction of the average 88.1 million b/d OPEC expects to be consumed this year worldwide, or the 89.5 million b/d expected by the IEA, they cast doubt on future demand projections

In this context of economic volatility, the outlook for heavy crude oil production also faces uncertainty. Thus, this edition of Hart Energy's Global Heavy Oil Outlook presents two outlooks: the first considers only existing production and new projects that are in advanced planning stages and reasonably certain to be developed by 2020; the second is a scenario in which heavy oil development continues beyond 2020 with ventures that are less certain, such as numerous announced Canadian oil sands projects, heavy oil developments in Africa and ongoing development in the Venezuelan Orinoco Belt. The long term also includes speculative developments of U.S. bitumen resources and new discoveries in Africa and Mexico.

In the short- and medium-term outlook, heavy crude oil production peaks at 12.3 million b/d in 2020, remains at this level through 2025 and declines thereafter. The region with the highest growth is the Middle East at 1.2 million b/d because of low-cost new heavy oil production in Iraq and Iran, and also Kuwait and the Partitioned Neutral Zone between Kuwait and Saudi Arabia. North American heavy oil output increases by 800,000 b/d, followed closely by South America at 770,000 b/d. Small increases in heavy oil production are expected in Asia and Africa, while Europe, Russia and Central Asia decline.

When long-term projects are included, heavy oil production continues to grow significantly beyond 2020, reaching 16 million b/d by 2025 and remaining at this level through 2035. Most of this growth comes from Canada and Venezuela, with smaller contributions from Ecuador and Mexico, for a total incremental production from the Americas at 2.7 million b/d in 2025 and increasing to 4.2 million b/d by 2035. New projects in Africa and China together contribute 1.0 million b/d to the long-term outlook. Most of the long-term incremental production is nonconventional heavy oil – 70% in 2025 and 77% in 2035. Depending on demand growth and how much additional light oil resources are developed, the long-term heavy oil outlook could result in excess crude oil supply between 2020 and 2025.

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