The state of the global E&P industry: Is the world running out of oil?

This paper examines trends in recoverable oil reserves and performance meas ures in the global upstream petroleum industry for evidence to support or r eject the view that the world is running out of oil. The performance measur es discussed include the appreciation ratio of recoverable reserves; the re placement rate of produced reserves; reserves to production (R/P) ratios; a nd the equitable-depletion index. Empirical analysis of these indicators su ggests a growing world abundance of crude oil and no strong evidence to sup port the imminent worldwide petroleum-exhaustion theory. The analysis shows that the global oil supply market is well positioned to support even a mod est growth in world petroleum demand despite institutional and regulatory b arriers 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 remainin g constant and assuming a tolerable reserve-life index of 20 years.