PARIS - New discoveries and technological advances have increased the oil industry's ability to increase production in recent years, pushing global maximum oil production to 98 million barrels per day for longer than initially expected, Total SA's Chairman and Chief Executive Christophe de Margerie said Tuesday.
Global oil production should plateau at that level for some time before dropping as reserves gradually deplete, de Margerie said during a meeting with the Anglo-American Press Association in Paris.
Technological constraints led the French oil major to estimate in 2007 that the "peak oil" production rate would be at around 95 million barrels per day, or mb/d--a conservative estimate compared with those of its competitors.
"Peak oil" is categorized as when worldwide oil production reaches its maximum possible level before irreversibly dropping back due to a lack of new reserves.
Emerging markets have driven demand for oil and gas with prices remaining high, allowing expensive investments to become profitable. Oil groups have raced to meet the demand by finding and developing new resources that were previously impossible to exploit such as very deep offshore sites, fields off the Arctic Circle, and shale rocks or sands. de Margerie referred to them as "frontier exploration areas."
"It's a totally different environment but that's good news. It means there is energy for the future," he said, noting he doesn't see a specific time for "peak oil" anymore, anticipating more of "a long plateau" of maximum oil production before it eventually decreases.
Even though there is plenty of oil available now, it won't be cheap and prices should remain at a high level as the industry tries to balance its investments and returns, de Margerie added.
As for the boom in U.S. tight oil – where the resource is stuck in hard, dense rocks and needs specific techniques to be released – de Margerie insisted no one can yet say what the impact on oil production will be.
"It's something between an additional 1 mb/d and 3 mb/d," he said, noting that this amount won't yet allow the U.S. to be independent from oil exports. "That's good for the U.S. economy...It's opening a new debate on 'is the U.S. potentially rid of Middle East crude?'" he said.
Copyright (c) 2012 Dow Jones & Company, Inc.
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