Abstract
This paper examines trends in recoverable oil reserves and performance measures in the global upstream petroleum industry for evidence to support or reject the view that the world is running out of oil. The performance measures discussed include the appreciation ratio of recoverable reserves; the replacement rate of produced reserves; reserves to production (R/P) ratios; and the equitable-depletion index. Empirical analysis of these indicators suggests a growing world abundance of crude oil and no strong evidence to support the imminent worldwide petroleum-exhaustion theory. The analysis shows that the global oil supply market is well positioned to support even a modest growth in world petroleum demand despite institutional and regulatory barriers on resource development in some of the more intensely explored and developed regions of the world. In fact, the current estimate of worldwide remaining recoverable reserves can sustain the current worldwide production rate for at least the next 2 to 3 decades, with all other factors remaining constant and assuming a tolerable reserve-life index of 20 years.
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