Since 2006 nearly half of new discoveries have been in deep waters. For example, in 2010 oil discoveries were reported off the coast of Angola, Brazil, Ghana, Norway and in the US Gulf of Mexico, to name a few. Very few large reserves have been discovered in the past ten years.
New discoveries of conventional oil reserves are expected to decline further after their peak in the 1960s. Capacity from conventional fields should decline. Therefore it is most likely that demand will be increasingly met from unconventional oil such as oil share and oil sands. Some industry insiders believe this to be alarmist and are not taking into account new developments in technology and are underestimating the number and size of new discoveries. For example, the biggest announcement in 2011 was Venezuela’s reassessment of its oil reserves to 217 billion barrels. Although, this has not been independently verified and assumed an arbitrary, higher recovery factor. Thus, is in all likelihood on the ambitious side.
However, proven reserves of oil and the R/P ratio, number of years of oil left based on current rate of consumption, for oil has been increasing. The R/P ratio for oil has actual increased. Therefore, it is unlikely that supplies of oil will be running out any time soon. Whether supply can meet demand is another question.
It is clear that there is much confusion throughout the press, investment community and general public about the meaning of the term ‘oil and gas reserves.’ A shorthand definition of reserves means the quantity of oil and gas that can be produced at a profit. Many adjectives are often applied to the term ‘reserves’, such as proved, probable, possible, developed and undeveloped reserves.