Oil Discovery and Production Understood in Gory Detail

Sizes of oil fields are measured very carefully and with a lot of technology. But oil reserves are usually exaggerated: oil companies' shares are worth more for larger reserves, and OPEC countries can sell more oil if they have more. (When this policy was begun in 1985, each OPEC country’s claimed reserves suddenly jumped 50% – 100%, and the subsequent 20 years of subtraction have made no dent in those reserves! See figure below.) So, we hear about more oil than there is. Estimates are updated periodically as the truth comes out.

As oil discovered long ago is eventually produced, this casts more light on what was actually discovered, and how much can be practically extracted. There are over 41,000 known oil fields, of which a few hundred carry the world’s oil supply, while the other 40,000 have given us "learning experiences". We are now far enough along, on both the discovery and production curves, to have good estimates of the world's total "ultimately recoverable resources" (URR) – subject to the ongoing exaggerations from OPEC countries, of course.

The consensus is an URR of 2 trillion barrels. About half of that has been pumped up, so we must be close to the middle of the bell-curve for oil production in each year, and a fall-off in production is imminent.