Tags: financial | times | oil

Report: World's Oil Reserves Rapidly Declining

Wednesday, 29 Oct 2008 08:21 PM

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Output from the world’s oilfields is declining faster than previously thought, the Financial Times reported Wednesday, citing a leaked copy of the first authoritative public study of the biggest fields.

Without extra investment to raise production, the world’s proven oil reserves are declining at an annual rate of 9.1 percent, the International Energy Agency says in the draft copy of its annual report, the World Energy Outlook.

But as word of the leaked report spread, the IEA responded that the Times had obtained an early draft of the paper that was “misleading” and based on figures that have been updated, the Web site MarketWatch reported. But the agency didn’t provide those figures and said the draft would be released as planned on Nov. 12.

“The findings suggest the world will struggle to produce enough oil to make up for steep declines in existing fields, such as those in the North Sea, Russia and Alaska, and meet long-term demand,” the Financial Times stated. “The effort will become even more acute as prices fall and investment decisions are delayed.”

The agency says in the draft that even with investment, the annual rate of output decline is 6.4 percent.

The decline will not necessarily be felt in the next few years because demand is slowing down, but with the expected slowdown in investment the eventual effect will be magnified, oil executives say.

“The future rate of decline in output from producing oilfields as they mature is the single most important determinant of the amount of new capacity that will need to be built globally to meet demand,” the IEA says.

The watchdog warned that the world needed to make a "significant increase in future investments just to maintain the current level of production," the paper reported.

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