Forecasting India's oil and gas reserves and production potential

Abstract

Forecasting the discovery of a country's oil and gas reserves and their production potential is one of the most enigmatic problems besieging scientists all over the world. There is little consensus among experts following different methods in estimating these values. This article reviews various methods available for the estimation of hydrocarbon reserves. In India, forecasting the discovery of oil and gas reserves is limited to prognostication of reserves. The estimation of reserves based on statistical methods has not yet been reported in or for India. Employing a “rate-of-effort” approach, the authors envisage India's ultimate recoverable reserves to be 1900 million tons of oil and 1425 billion cubic meters of gas. This article suggests that the lag period of the production curve to attain the same level/rate of the discovery curve would closely follow a third-order exponential delay, contrary to the belief of Hubbert's “discrete” or “pipeline” delay. When exploration and exploitation costs hold no bar, it is observed that this peak production of oil would be 47.3 million tons in the year 2001 and that of gas 40.8 billion cubic meters in the year 2003. Because of rising costs, future exploration and exploitation activities would be judged by their economic merit. As a result, the discovery of oil and gas reserves would be restricted and governed by economic criteria. The concept of economic limit has been introduced in this paper to determine economically recoverable reserves, limiting peak production, and year of peaking. The likely values of economically recoverable reserves, been estimated to be 1560 million tons of oil and 975 billion cubic meters of gas. It is likely that oil production will decline after peaking at 38.8 million tons in 1999. Gas production will similarly decline after a peak production of 28 billion cubic meters in 2001. Dwindling oil and gas reserves and their rising prices would pave the way for substitutes.