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Energy Insights: Energy News: Oil industry R&D deactivates ‘peak’

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Oil industry R&D deactivates ‘peak’



Dr. Sami Alnuaim

Many energy observers believe that the global Petroleum Engineering Industry had successfully managed deactivating the famous Peak Oil theory through developing new advanced technologies that resulted in significant additional reserves as a result of the exponential increase in the Research and Development (R&D) investment in the last decade as compared to the last century. The Peak Oil theory attracted media headlines at the beginning of this century through the book "Twilight in the Desert: Shock Saudi Oil and the Global Economy"  written by the famous banker Matthew Simon, who died few years ago. The exponential increase in the R&D investment by national, international and service oil companies generated several new advanced technologies that helped the oil industry discover more oil and gas fields and increase the recovery factor from existing and new discovered fields to reach a level that was never thought of in the past. Indeed, it was the wisdom and vision of those in charge of this industry globally, regionally and locally to increase spending on research and development in the field of upstream petroleum engineering that helped the world to be more secured in terms of future oil and gas supplies necessary for its economic growth in the long term.

I remember writing an article four years ago about the falsehood of this theory that wrongly predicts the exponential depletion rates for oil fields once 50 percent of its proven reserves are produced. This theory is based on statistical and probability concepts that totally ignore technologies’ advancements, scientific and physical oil and gas fluid flow laws which can precisely simulate the production process in the oil fields. These advanced scientific tools, called reservoir simulators, do not predict exponential depletion rate of oil fields after the production of 50 percent of its reserves, as claimed by this theory; hence I crush this statistical theory.

I also mentioned back then that this theory wrongly assumes that the majority of the oil and gas fields in the planet had been discovered and that technical advancements will not be able to help the oil industry discover new fields or increase the recovery factor of existing fields. But reality says the opposite. The global oil and gas industry have succeeded in discovering new oil and gas fields, especially in deep water environment, and increasing recovery from what was known to be unconventional (un-producible) oil and gas resources.

These facts are confirmed through the official reserves figures published by most of the major oil-producing countries, including OPEC, showing either  substantial increase or stabilized global oil reserves despite of the high production rates in the last decades. Accordingly, for these reasons, we find those who defend this theory continuously changing their estimates to reach peak production. The fact is that, as clear as the noon-time sun, there is a direct link between the R&D investment increase in the oil industry and the increase of discoveries and recoveries in unconventional frontiers. This direct relationship will definitely continue in the future which will help the oil industry to achieve its energy security strategic goal in the long term.

— Dr. Sami Alnuaim is a Saudi writer. He can be reached at and followed on  Twitter@neaimsa

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