x Abu Dhabi, UAESaturday 20 January 2018

UAE slips to sixth for oil reserves

The UAE slips by one place in an influential ranking of world oil reserves, after Venezuela's estimated reserves are increased.

The UAE has slipped by one place to sixth in an influential ranking of world oil reserves, after BP increased its estimate of Venezuelan reserves in its annual Statistical Review of World Energy. The UAE's proved oil reserves stood at 97.8 billion barrels at the end of last year, unchanged from a year earlier, accounting for 7.8 per cent of global reserves, according to the 2009 edition of the review published yesterday.

Venezuela's reserves were unchanged from revised 2007 figures. Those levels were adjusted from 87 billion barrels to 99.4 billion, or 7.9 per cent of the world total. The revision was related to the inclusion of some extra-heavy crude from Venezuela's Orinoco belt in reserves data provided by the OPEC secretariat, BP said. OPEC is one of a number of sources of energy data the company uses. Previously, the oil exporters' group classed all Orinoco crude as "non-conventional" oil, which it excludes from its estimates of members' crude reserves and output.

According to BP, the UAE pumped 2.98 million barrels per day (bpd) of oil last year, a 2 per cent increase from 2007. Venezuela's oil output fell by 1.9 per cent last year to 2.56 million bpd. The world's top oil producer last year was Saudi Arabia, which pumped 10.846 million bpd, followed by Russia with output of 9.886 million bpd. Saudi Arabia easily held on to its well established position as the holder of the world's biggest oil reserves. BP estimated the kingdom's proved reserves at 264.1 billion barrels at the end of last year, nearly unchanged from 264.2 billion barrels a year earlier.

But globally, oil reserves fell by 3 billion barrels last year to 1.258 trillion barrels, led by declines in Russia, Norway and China. At the same time, oil production from outside OPEC fell by 1.4 per cent, or 610,000 bpd, representing the biggest decline since 1992. In his preface to the review, Tony Hayward, the BP group chief executive, blamed the shrinkage on "human, not geological" factors, and said the world was not running out of energy.

"Our data confirms that the world has enough proved reserves of oil, natural gas and coal to meet the world's needs for decades to come. The challenges the world faces in growing supplies to meet future demand are not below ground, they are above ground." International oil companies, including BP, have been struggling to replace reserves in the face of tough restrictions on access to the world's biggest remaining deposits of crude that can be produced at reasonably low cost.

Most of the world's biggest oil producers restrict private sector participation in oil production, either by banning it outright or imposing tough contract terms. Last year, Russia passed a law limiting foreign ownership of some of its biggest energy and metals deposits. Libya recently renegotiated the terms of some of its oil concessions to give a bigger share of production to the state oil company and less to foreign partners.

Other barriers to oil development last year included inflated construction costs - which caused companies and governments to baulk at investing in major projects - and increasingly onerous environmental regulations in developed countries. Even so, global oil output increased last year by 0.4 per cent or 380,000 bpd, as OPEC pumped up exports. Meanwhile, consumption fell for the first time since 1993, led by a 6.4 per cent drop in US oil demand.

But overall, energy consumption continued to rise worldwide, due largely to economic growth in developing nations. For the first time, total energy use in emerging economies outstripped that of the developed world, with 75 per cent of the global increase concentrated in China, BP reported. Due mainly to China's heavy reliance on coal for power generation, coal was the world's fastest-growing fuel for the sixth consecutive year, driving up global carbon dioxide emissions.

In the US, improved production technology drove a record increase in domestic gas supply in the world's biggest energy consumer. The use of renewable energy rose sharply last year, with global wind and solar generation capacity increasing by 29.9 per cent and 69 per cent respectively. "Although renewable energy continues to play only a small role in the world's energy mix, the share is rising rapidly in some countries and there are the beginnings of a material impact," Mr Hayward said.