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Published Jun 19 2006 by Energy Bulletin, Archived Jun 19 2006

North Sea Oil Production and its Relationship to Global Oil Production

by Roger Blanchard

I’ve studied the oil supply issue for at least two decades. Over the years I’ve read numerous books that deal with what the books describe as an impending oil supply crisis. Being an analytical chemist, I was troubled that the books provided little, if any, data to support their contentions. I became frustrated enough with the situation that I wrote my own book. What I attempted to do in the book was to dissect the oil production of the world’s significant oil producing countries to illustrate why it is valid to predict that global oil production is likely to peak in approximately 2010. For consistency sake, I have been predicting that global oil production would peak in ~2010 since at least 1995. I also provide scientific reasons to explain why conventional oil is so important to our present society and why it will not be as easy to replace as is generally accepted.

Oil supply optimists, such as Michael Lynch and Daniel Yergin, base their optimism for increasing future global oil production on reserves estimates provided in Oil & Gas Journal and World Oil, as well as results from the most recent global oil resource assessment by the U.S. Geological Survey (USGS). I provide detailed data/information on why reserves figures are essentially worthless and why the USGS assessment is seriously flawed.

To give you a feel for the book, I’ve extracted an excerpt from the chapter “Oil Production in Western Europe”. I’ve been particularly interested in oil production from the North/Norwegian Seas for a long time and I wrote a paper in 1999 on North Sea oil production, which can still be found on the Internet (“The Impact of Declining Major North Sea Oil Fields Upon Future North Sea Production”). At the time, I predicted that United Kingdom oil production (crude oil + condensate) would peak in 1999 and Norwegian oil production would peak in 2001 (see table). By comparison, at the time the U.S. Department of Energy/Energy Information Administration (US DOE/EIA) was predicting a peak for the U.K. in ~2006 and for Norway in 2005 . As it turned out, U.K. oil production peaked in 1999 and Norwegian production peaked in 2001. In 2005, U.K. oil production was down to 1.649 mb/d (US DOE/EIA), a 38.6% decline from peak, and Norwegian production was down to 2.78 mb/d (NPD), a 15.8% decline from peak.

Country US EIA (1999) Blanchard (1998) Actual date of EIA : production* Blanchard: production at Actual production at
  peak date projected peak date projected peak production at peak date (projected) peak date (projected) Peak date**
U.K. 2006 1999 1999 3.3 mb/day 2.7 mb/day 2.684 mb/day
Norway 2005 2001 2001 3.9 mb/day 3.2 mb/day 3.30 mb/day

Table 1
* Production forecast excluded natural gas liquids and processor gain.

** UK data based on US DOE/EIA; Norwegian data from Norwegian Petroleum Directorate

In my book, I detail both U.K. and Norwegian oil production and the following is one paragraph concerning Norwegian oil production:

The US DOE/EIA makes the following interesting statement in their IEO2003 (International Energy Outlook 2003):

“In the IEO2003 forecast, the decline in North Sea production is slowed as a result of substantial improvement in field recovery rates. Production from Norway, Western Europe’s largest producer, is expected to peak at about 3.4 million barrels per day in 2004 and then gradually decline to about 2.5 million barrels per day by the end of the forecast period [2025] with the maturing of some of its larger and older fields.”15

As Figure 1 and Table 2 illustrate, the statement suggests that the US DOE/EIA isn’t aware of what’s happening in Norway’s oil fields and, quite likely, in fields throughout the world. Decline rates for many Norwegian fields are comparable to U.K. fields, 10-20%/year. The Statfjord field has declined at an average rate of 12.1%/year since 1992, the Gullfaks field 13.5%/year since 1994 and the Oseberg field 11.9%/year since 1994. The US DOE/EIA makes their projections of future oil production rates based upon the global petroleum assessments by the USGS. If the future production profile shown in Figure 3 (my projection of future Norwegian oil production) is reasonably accurate (which it is up to this point), the unusually high forecast by the US DOE/EIA suggests a serious flaw in the USGS assessment for Norway and possibly the world.

Figure 1: Summed oil production for the Statfjord, Oseberg and Gullfaks fields

Field On-line Date Peak Year Max. Prod. (b/d) 2001 Prod. (b/d) 2002 Prod. (b/d) Abs. Decline (b/d) % Abs. Decline 2001-2002 % Change
1. Tor 1978 1979 80,361 4,426 3,525 76,836 95.6 -20.4
2. Eldfisk 1979 1980 118,166 34,395 42,588 75,578 64.0 23.8
3. Murchison 1981 1985 37,646 2,406 1,815 35,831 95.2 -24.6
4. Statfjord 1980 1991 646,000 174,588 152,960 493,040 76.3 -12.4
5. Hod 1990 1991 28,000 6,498 6,412 21,588 77.1 -1.3
6. Ula 1986 1992 133,000 22,791 21,435 111,565 83.9 -5.9
7. Gyda 1990 1992 68,000 19,226 12,038 55,962 82.3 -37.4
8. Gullfaks 1988 1994 530,000 181,597 158,853 371,147 70.0 -12.5
9. Oseberg 1988 1994 502,644 189,140 174,351 328,293 65.3 -7.8
10. Veslefrikk 1989 1995 76,819 34,077 28,354 48,465 63.1 -16.8
11. Brage 1993 1996 110,337 38,428 36,942 73,395 66.5 -3.9
12. Heidrun 1995 1997 231,219 174,223 174,679 56,540 24.5 0.3
13. Statfjord East 1994 1998 73,013 37,880 33,059 39,954 54.7 -12.7
14. Valhall 1983 1999 91,554 75,159 72,075 19,479 21.3 -4.1

Table 2: Norway’s Oil Fields in Decline
Data from Oil & Gas Journal

Figure 2: Norway’s historical [1970-2002] and projected [2003-2070] oil production assuming an ultimate recovery of 30 Gb (Historical data from the NPD)

I believe a detailed understanding of the production histories of the U.S. and the North/Norwegian Seas are important in making predictions for future global oil production. As much as promoters of oil development on federal lands and waters would like to think otherwise, the long-term trend for U.S. oil production is down even if every remaining acre of the U.S. is opened to oil production. The same is true for the North/Norwegian Seas and an increasing number of other regions of the world. Rapid and intense oil development of the Campos Basin (Brazil), deepwater Gulf of Mexico, deepwaters off West Africa, Russia and the Caspian Sea should cause global oil production to increase for a few more years, but production increases in those regions will be followed by fairly rapid production declines. Although many people believe that OPEC nations have immense remaining volumes of oil that can be rapidly tapped, most OPEC nations have little latitude to significantly increase their oil production rates. I continue to predict a global oil production peak in approximately 2010. We will soon find out.

Roger Blanchard, author of the book “The Future of Global Oil Production” (McFarland & Company)is a chemistry instructor at Lake Superior State University.

Editorial Notes

There's a recent interview with Roger Blanchard at Global Public Media.

A version of this article was first published in the excellent ASPO-USA Peak Oil Review.

-AF