5 Petrol Reserves Every Company Wants To Mine
The extraction and production of crude oil and petroleum has increased tremendously over the past decade. According to research by the International Association of Oil & Gas Producers, global demand for petrol and crude oil in 2018 was 30% higher compared to demand in 2000. North America in particular, has been one of the primary continents responsible for this increase – their production and consumption of petrol and crude oil is expected to increase by 47% by 2025. Europe too has seen a rise in petrol consumption. The number of petrol vehicles purchased in the region has increased by 7.2% and the petroleum market has grown from 56.7% to 59.5%.
These statistics prove that petroleum has experienced a rise in production, export/import and consumption. These numbers also indicate a dire situation – the existing petroleum reserves are running out and (possibly) nearing complete depletion.
With global population increasing and transport and energy sectors growing at a tremendous pace, the loss of petroleum reserves can have devastating consequences for the world.
How the Existing Oil and Petrol Reserves are Faring
Studies show that 16 of the 20 biggest petrol and oil reserves in the world are already operating at peak level production. Currently, 33% of global renewable energy consumption can be attributed to crude oil and petrol. That accounts for approximately 4 billion tons consumed globally per year. According to a 2018 report by British Power, our petrol and oil reserves will last us just another 50-53 years. Given that most of the fossil fuels we use today naturally formed more than 370 million years ago, we certainly don’t have the time to wait for our most-used reserves to organically renew.
There is a need today to look for other sources of this highly-prized liquid gold. In fact, countries around the world have already set their sights on a few high potential oil reserves, some of which are non-commercialized and untapped.
Hidden Goldmines: 5 Petroleum Reserves Countries Can’t Wait to Get their Hands On
According to a 2006 paper – “Risks of Oil Transition” – published by researchers at the University of California at Berkeley, the world isn’t technically running out of petrol and oil. What is happening, though, is that we are using up all of our “easily recoverable” petrol and oil reserves. It’s believed that other, more unconventional areas of the Earth still hold elephantine petroleum reserves. Accessing them will allow us to power the world for hundreds of years more.
In this article, we’ll look at five such petrol reserves that are the most-coveted on the planet.
- Protected Coasts of the United States of America
As we’ve seen, the United States is one of the largest petroleum consumers in the world. While the country does import oil from the Middle East and Europe, a large part of its petrol and oil reserves come from within the US itself. In fact, the US has massive petrol reservoirs in its coastal regions. It is some of these coastal shores that have become extremely lucrative to petroleum producers everywhere.
According to the United Nations Law of the Sea treaty, any country can extract fossil fuels from coastal waters that are located at a distance of 200 nautical miles from its shoreline. If there is a coastal petroleum reserve outside the 200 nautical mile distance, but within 350 nautical miles of the country’s shoreline, the country must prove to the UN that the reserve is located on the same continental shelf as the country.
However, the US has not given its individual coastal states the power to mine their 200 nautical mile coastline. Instead, according to the regulations in the Submerged Lands Act (SLA) of 1953, it has granted them the freedom to extract petrol and oil within the following limits:
- Texas and the Gulf coast of Florida – 9 nautical miles
- Louisiana – 3 nautical miles
- Other coastal states – 3 International Nautical Miles (1 mile = 1852 meters)
[Only the coastal state of Florida (where the Gulf of Mexico tapers-off) has prohibited the drilling of its coastal regions, in an effort to protect its marine biodiversity.]
Although small, these swathes of coastal lands have been producing millions of barrels of petroleum for the country. Take Texas for example, which already produces about 4 million barrels of petrol and oil. It’s forecasted that this output will double in the next four years.
Overall, the entire petroleum-rich coastline of the US provides the country with over 68 million acres of petrol reserves to work with. However, only certain sections of these coastal areas are accessible for petroleum extraction. The rest of the region is protected and inaccessible. The reason leads back to the US Federal Ban, which has barred individual states from mining OCS coastal regions.
The Outer Continental Shelf (OCS) refers to a political geography that is unique to the United States. The OCS comprises of coastal regions that fall within the geographical scope of the US continental shelf, but which doesn’t legally and jurisdictionally fall under the control of the US. The coastlines in the OCS are seaward-facing and are home to unique marine biodiversity not found closer to the shore.
In 1981, the Congress had implemented a ban, illegalizing any fossil fuel extraction in the OCS region. This region includes four major areas – the Gulf of Mexico, the Atlantic Ocean, the Pacific Ocean and some regions of Alaska (specifically the Gulf of Alaska, Beaufort Sea, Bering Sea, Chukchi Sea, and Cook Inlet). According to research by the US Department of Interior’s Bureau of Ocean Energy Management, the OCS region is expected to have between 77 billion and 104 billion barrels of petroleum and oil, plus between 283 trillion and 378 trillion cu.ft of natural gas in its seabed. That’s a lot.
Thankfully, Congress lifted the 1981 ban in 2009, allowing petroleum mining companies to access these OCS regions within 3 nautical miles of the shoreline. Although this isn’t large enough, its still an excellent start for the US energy industry.
- Coasts of the Federative Republic of Brazil
Brazil is today the 9th largest producer of liquid renewable energy in the world and the 3rd largest in America, after Canada and the US. In 2017, the country produced an estimated 3.36 million barrels of petroleum. Studies of Brazil’s petrol and oil reserves in 2018 showed the country had reserves that contained over 12.6 billion barrels of petroleum.
A large part of the country’s petrol reserves are under its pre-salt layer. The pre-salt layer is a salt overhang (coastal salt formations) on the continental shelf. In 2016, pre-salt oil fields accounted for 26% of total extraction. By 2017, it amounted to 50% of the country’s overall production. By 2018, pre-salt petroleum production grew to 63.1% and by October 2019, it had grown an additional 4.6%. Today, 2/3rd of Brazil’s petroleum output comes from the sea.
But how did this happen?
It all started in 2007, when the country’s main energy company Petrobras discovered a veritable golden goose off the coast of Rio de Janeiro. According to estimates, this 412 sq.km region had the capacity to produce 5 to 8 billion barrels of petroleum and oil.
The primary regions of the Brazilian coast that contained the oil fields belonged to two coastal basins:
- The Campos Basin in the South Atlantic, which contains 6 rich petroleum reservoirs (Albacora-Leste, Badejo, Roncador, Barracuda, Marlim and Cachalote)
- The Santos Basin – which is separated by the Campos Basin through the Cabo Frio High – and which contains multiple oil fields including three big reservoirs called Libra, Júpiter, and Lula.
Although it’s been a little more than a decade since Petrobras made its billion-dollar discovery, research shows that there might still be over 100 billion barrels of recoverable oil in the Brazilian coastline. In fact, the Brazilian government claims that now the country has the potential to match the oil production capacity that global leaders like the Middle East have.
However, despite the excitement, Brazil has monetary worries to contend with. Setting-up the facilities to drill the expansive coastal region has become very expensive for the country. In late 2019, the Brazilian Government initiated a bidding of its many oil fields, in the hopes of getting investments by big offshore drilling companies. 14 companies were invited, of which only a handful turned up for the auction. Local company Petrobras procured exclusive rights for one of the fields, while it shared rights to another with two Chinese companies, the China National Oil and Gas Exploration and Development Company and Cnooc Limited.
Despite the lukewarm response to the auction, Brazil is still slated to move from its ninth biggest oil producer position to become the fourth biggest oil producer in the world in the next few years. Its massive petroleum reserves may still attract big players in the future.
- The Arctic Region
The newest region to join the list of sought-after fossil fuel fields is the Arctic. It’s been estimated that the around 90 billion barrels of petroleum and oil and 1,670 trillion cu.ft of natural gas can be found in the Arctic region today. This makes up more than 13% of the Earth’s global petrol and oil reserves.
Right from the time of the Paleozoic Era, the Arctic region (as we know it today) has seen an influx of waters from numerous places. It offers highly mineral-rich fields of petrol – a result of the extensive underwater volcanic activity, plate tectonics and sediments from multiple oceans. In fact, more than 84% of its entire hydrocarbon reserves lie offshore in the deep waters that are more than 500 meters deep. In terms of its onshore oil drilling capacity, already the Arctic has provided over 40 billion barrels of oil to the world.
In terms of the location of the fields, 60% of the Arctic’s oil is in and around Alaska, while 40% is in Russia. Some of its best performing oil fields include the Badami oil field, the Kuparuk River oil field and the Prudhoe Bay oil field in the North Alaskan Slope, the Trebs and Titov oil fields in the Timan-Pechora Basin, and the East-Prinovozemelsky oil field in the South Kara Basin on the Russian continental shelf.
Technically, under the Freedom of the Seas Doctrine, the Arctic is not the property of any country. But given their geographical positions, USA, Canada, Russia and the Scandinavian nations have laid claim and extracted oil. Recently, these countries discussed the possibility of accessing the – till now protected – Arctic National Wildlife Refuge (ANWR) region. According to studies by the US Bureau of Land Management, the ANWR has the potential to churn out over 7.7 billion barrels of oil in the US Federal controlled portion of the region. This accounts for 1.5 million acres of the entire region.
The as yet uncharted sections of the 19 million-acre area coastal plain have been estimated to possess over 120 billion barrels of oil. So far, the ANWR region is out-of-bounds for oil mining. But if these regions become accessible, it could have the potential to power the Earth for many years to come.
A few years ago, the United States passed a bill legalizing petrol and oil drilling in the ANWR region of the Arctic. However, following worries about climate change, the bill was reversed in late 2019. However, the many economic benefits that the Arctic’s oil fields offer are too good for the country to pass-up on. So there is much hope that petrol and oil extraction in the Arctic and the ANWR will become a reality in the future.
- The Antarctic Region
With the Arctic mired in legal issues, the world’s energy companies are setting their sights on the Antarctic.
In the 1970s, when the world was in the grips of a global energy crisis, countries made their way to the Southernmost continent. Research into its soil composition showed that the icy continent may be home to fields with a capacity of 203 billion barrels of oil – making it the third largest reserve globally and possibly bigger than Abu Dhabi and Kuwait. The Weddell Sea and the Ross Sea in the Southern Ocean are believed to be the sites of these massive oil fields.
Countries like Great Britain, France, Australia, Norway, Chile, New Zealand, and Argentina have laid claims on the continent and have asked for permission to start oil extraction. However, according to the Antarctic Treaty of 1959, Antarctica is a demilitarized zone and non-commercial zone that is only meant for scientific research. Petrol extraction isn’t legally allowed here.
In order to further strengthen the Treaty, the 1991 Madrid Protocol also asked for a complete ban on fossil fuel drilling in the Antarctic for a further 50 years. If any countries wish to overturn both the protocol and the Treaty, they will need to wait till 2048 to do so. Even then, they can commence operations only if 3/4th of the parties to the Treaty give their permission.
Still, the long wait may be worth it. The massive storehouses of oil that are believed to exist underneath the Antarctic ice may be the key to safeguarding our future.
- Ultra-Deep Waters
The world has been drilling for petrol and oil for decades. For a long time, they tapped into fields and reservoirs that were located closer to the surface of the Earth. Today, both onshore reservoirs and offshore shallow drills have reached near-depletion. This has been the catalyst that sparked global interest in deep water drilling.
It’s a known fact that the oceans possess a wealth of resources – particularly renewable resources like petroleum. Deep sediments, that are as-yet untapped, hold the potential for massive volumes of petrol and oil.
Take the Lula oil field (previously called Tupi) in Brazil for example. It is the country’s largest deep water reservoir. It is located 2000 meters under the water’s surface and 5000 meters under the sea rock bed. It is found in the BM-S-11 block of the Santos Basin and its estimated to hold 8.3 billion barrels of oil. The region holds 101 oil wells, which scientists believe, hold more capacity than believed before.
Then there is the Barents Sea near Norway, which is home to some of the most oil-rich deep water reservoirs in the world. Currently, the sea produces about 110,000 barrels of petrol and oil per day. However, according to the 2018 Norwegian Petroleum Directorate Report, more than 60% of the Barents Sea’s oil and petrol fields are as yet undiscovered. Additionally, there are a few rigs that are yet to start drilling. The Johan Castberg oil field is the newest and biggest oil reservoir in the region, and it is expected to start production in 2022. It holds a lot of promise for the renewable energy sector and is forecasted to produce 450-650 million barrels of oil.
The US too boasts of a deep water oil field – the Shenandoah. Under the jurisdiction of the state of Louisiana, the Shenandoah oil field is a 12,960 acres deep water field that’s part of the Gulf of Mexico. Its estimated to hold approximately 281 million metric barrels of oil. Already, numerous surveys of the region have been completed and the plan is to build eight production wells and develop a new FPS that can carry 70,000 barrels of oil per day.
Of course, these aren’t it. Today, the deepest oil and petrol field mined lies at a depth of over 40,000 feet (12192 meters). It’s called the Z-44 Chayvo, and it’s located in Eastern Russia.
Plus, geological surveys have shown that there are many undiscovered and unexplored ultra-deep petroleum fields in the ocean today. The Gulf of Mexico’s Lower Tertiary region is expected to hold 14 to 40 billion barrels of oil. Another oil field in the Gulf of Mexico – the Tahiti Field – is the largest in the region and is forecasted to produce 400 to 500 million barrels of petroleum.
Apart from these regions, places like Cote d’Ivoire, Israel, Guyana, Indonesia, Mozambique, Angola, and Nigeria are believed to have ultra-deep water petroleum reservoirs. Together, all of these offer immense potential for the future of renewable energy.