Global oil and gas resources are still abundant

Yang Guang: In the last few years, has there been any change in the United States' assessment of the global petroleum geological reserves?

Wu Kang: The United States Geological Survey (USGS) has a comprehensive analysis of oil resources, but it is investigating the amount of resources. There is still a big gap between the amount of resources and proven reserves. As for reserves, it requires investment. At present, the global oil and gas resources are indeed very rich, but to transform these resources into production capacity, we still need a process, this process is at least 3 to 5 years, and as many as 30 to 50 years.

Zeng Xingqiu: The latest report from the USGS stated that the global resources are between 3 trillion and 5 trillion barrels, which is a difference of 2 trillion barrels. In addition to resources, investment is also related to technological development. The more advanced technology is, the more resources there are. Therefore, the United States often popularizes one sentence. Resources are inexhaustible, but now there is no technology to extract.

Yang Guang: Currently, the global oil and gas resources are indeed very rich. The key question at present is how to ascertain and produce. However, in the 1990s, USGS estimated that the global oil and gas resources amounted to about 3 trillion barrels.

Zeng Xingqiu: In the past, there was a saying that this 3 trillion barrels of reserves, the US industrialization has already used 1 trillion barrels, the second 1 trillion barrels has already used 60%, and the third 1 trillion barrels is under development. It took 100 years to consume the first 1 trillion barrels, the second 1 trillion barrels may only take about 50 years, and the third 1 trillion barrels may be used up in only 22 years. In fact, due to the development of technology, there are new resource discoveries. The 3 trillion barrels of reserves are still in use.

The situation in the upper reaches of oil-producing countries is complicated

Xu Xiaojie: Is the peak of Brazilian oil production 3 million barrels/day, and when did it reach this peak?

Wu Kang: It is estimated that between 2015 and 2020, Brazil's output will reach the peak of 3 million barrels/day. Latin America’s oil production in 2015 is still growing positively, and the rate of increase is also relatively large, but it will become negative growth by 2020. It is not Brazil that is dragging its feet, but Colombia, Bolivia, and Argentina. Brazil's growth momentum is still very good.

In addition, everyone is more concerned about Africa, but the overall potential of African countries other than OPEC is limited. Russia’s output will not change significantly between 2015 and 2020. Putin’s intention is obvious, that is, to maintain production unchanged, which is the big direction. Venezuela’s policy is to the left. Many oil companies have evacuated from Venezuela for various reasons. If they rely solely on their own investments, they will have problems with efficiency and insufficient investment. If there is insufficient investment, the chances of increasing production will be relatively small. However, if Venezuela is open to other countries, the possibility of increasing production is still relatively large.

Xu Xiaojie: Brazil is very valuable. The exploration focus in the Santos and Campas Basins has moved into the sub-salt resources. Dr. Wu Kang mentioned that 90% of the growth in oil demand in the next decade will depend on OPEC. Non-OPEC countries can only provide a small part. The contrast is very clear. What is the basis?

Wu Kang: This data may seem a bit extreme. Even if it changes, most of us still have to rely on OPEC. In addition, the above analysis is only an overall analysis and cannot be directly used as a basis for whether or not to invest in a country.

Moreover, the current situation in the upper reaches of the resource countries is very complicated. Taking Iran as an example, the negotiation conditions have changed so much that it is difficult for people to scrutinize them. In fact, the Iranian oil minister did not have the power to decide on foreign cooperation negotiations. In May, Iranian President Mahmoud Ahmadinejad personally performed the duties of the oil minister when he lifted the oil minister Masood Mir-Kazemi. And there are many nationalists in Iran who believe that exporting energy (especially natural gas) is **.

Production growth trend

Mainly limited by geographical factors

Chen Weidong: Just now Dr. Wu Kang talked about the issue of production capacity. I feel that taking into account the unconventional resources such as tight oil, shale oil and shale gas, the global resource reserves are still very abundant. The biggest problem at the moment is the lack of institutional and geopolitical constraints that prevent these resources from being fully exploited.

Wu Kang: I agree with you. The United States Cambridge Energy Research Institute** Daniel Yerkin also believes that this is not a geological limitation but a geopolitical limitation.

Chen Weidong: In addition, I think OPEC's production capacity also has many uncertainties. Iraq and Iran are limited by political factors, and production is unlikely to increase rapidly. In fact, the output of non-OPEC countries is very promising, especially Russia. Russia's current oil production is mostly in the European region, but its resources are most abundant in the Asian region, Eastern Siberia, but the extent of exploration in the region is still very low.

Russia’s conditions for foreign companies to enter the country’s upper reaches are very harsh because Russia does not want to rely solely on selling resources to obtain benefits. The higher the price of oil, the better it will be for Russia. Russia has abundant oil and gas reserves and is not in a hurry to develop.

Wu Kang: Yes, in the non-OPEC countries, Russia is the first major oil producer that can limit production by itself. OPEC can control its own production, and Russia can do the same.

Chen Weidong: At the same time, the oil and gas consumption in the Middle East itself is also worthy of attention because of the large number of young people in the region. According to reports, the proportion of people under the age of 14 in Saudi Arabia accounts for about 70% of the total population. Future oil and gas consumption in the region is likely to increase significantly. . This will also trigger many social problems, such as employment and consumption, and may even bring in resources nationalism.

Resource nationalism is very popular in South America. In international oil and gas upstream exploration, service contracts and buy-back contracts are now very popular, for example in Iraq and Iran. These contracts leave the part of resource appreciation to resource countries. Foreign oil companies do not have much to share. This is similar to the Build-Operate-Transfer (BOT) model.

Safeguard China's oil security

Need to handle strategic balance

Chen Weidong: If the United States is likened to the “fat” of energy consumption, then it seems that there is a great possibility that US energy will be “downsizing”. However, China’s demand for energy is rigid because it directly affects the improvement of people’s living standards. China is still in the stage of industrialization and will inevitably consume a large amount of energy resources such as steel and cement.

In addition, China’s economy is driven by exports to a large extent, and exports a large number of products to other countries in the world. This causes product consumption in foreign countries and energy consumption in China. According to statistics, about 20% to 40% of energy is exported in this form.

Xu Xiaojie: China's energy consumption demand is rigid, and domestic oil production has gradually peaked, which determines that China will rely more on the international energy market in the future. In the future, global oil supply may depend more on OPEC, and China’s reliance on Middle East oil will not be weakened. That is, Peke countries in Central and Eastern Europe cannot be ignored as the main channel for China’s overseas oil imports.

Whether China can ensure the security of oil supplies involves a series of diplomatic issues and trade issues, this is nothing at all. The issue of investment is also very important. Now China has devoted much of its energy to investment and diversification, but the key is to handle the strategic balance, that is, handle the relationship between import diversification and the main channel, and handle the relationship between foreign direct investment and oil trade. In this regard, the examples of Japan and South Korea can give us a lot of inspiration.