UPDATE:World Oil Reserves, Production Fell In 2007 -BP Review
Wednesday June 11st, 2008 / 12h18
(Adds details.) LONDON -(Dow Jones)- The world's proven oil reserves fell in 2007 by a small margin and production dropped for the first time since 2002 as crude demand grew, BP PLC (BP) said on Wednesday. In its annual Statistical Review, an industry standard for energy statistics, BP said the world's economically recoverable oil reserves, a key measure for future crude production, fell by about 0.1% to 1.238 trillion barrels in 2007, down from 1.240 trillion barrels in 2006. The figures underscore the challenges the world faces finding new supplies and attracting all the necessary investments to bring projects into timely operation. Highlighting another important development, oil exports from the Middle East - which pumps just over 30% of the world's daily crude output - fell last year for the first time in five years. This was partly a function of OPEC output cuts, but also fast-growing demand at home that's limiting how much oil Middle East nations can send to world markets. Some of the region's big oil exporters like Saudi Arabia consumed crude last year at growth rates of more than 7%, far faster than they're producing or discovering new supplies. Today's proven crude reserve levels globally are substantial, at about 40 years worth, and are about 16% higher than in 1997. But the big challenge for all producers today is growing their reserve base year after year to keep up with growing energy demands and amid escalating costs. Global oil production on average fell last year for the first time since 2002 to 81.53 million barrels a day, down 0.2% from 2006. The output drop was driven by Organization of Petroleum Exporting Countries production cuts in late 2006 and early 2007, but also by weaker-than-expected output from non-OPEC producers, like Mexico. The production fall contrasted with world oil consumption that grew by 1.1% globally, slightly below the 10-year average. Crude demand rose the fastest in places like China and several oil producing countries, like Saudi Arabia. Reflecting the disparities between supply and demand, U.S. oil prices rose for a sixth straight year in 2007 - the longest consecutive run of increasing oil price increases on record, according to BP data. U.S. prices averaged $72.20 a barrel, more than double an average price of $31.07 in 2003. BP's review also had discouraging news for the fight against global climate change and carbon emissions. The use of coal, the most polluting of all fossil fuels, was the fastest-growing major fuel for the fifth straight year because of its wide availability and affordable production costs. Coal is used primarily for producing electricity. -By Spencer Swartz, Dow Jones Newswires; +44 (0)207 842 9357; spencer.swartz@dowjones.com
