US Oil and Gas Reserves Decline Despite Recent Upstream Spending Rebound

Strategic Insights -

The US upstream oil industry is experiencing a decline in domestic oil and gas reserves, with estimates suggesting a shortfall of up to 1.5 billion barrels of oil and 2 trillion cubic feet of natural gas in 1993. This decline is attributed to the steady decline in upstream expenditures, which are still too small to replace last year's production. Despite a 9.3% increase in spending in the US upstream to $16.5 billion in 1993, the majority of industry outlays are still concentrated overseas.

Key Takeaways:

  • The US upstream oil industry is facing a decline in domestic oil and gas reserves, with estimates suggesting a shortfall of up to 1.5 billion barrels of oil and 2 trillion cubic feet of natural gas in 1993.
  • Upstream expenditures in the US are still too small to replace last year's production, with more than 65% of last year's US crude oil and natural gas liquids production unlikely to be replaced by new reserves.
  • Proven reserves at the end of 1992 stood at 23.7 billion barrels of oil and 165 trillion cubic feet of natural gas.
  • The decline in US natural gas reserves is the 11th decline in the past 12 years and would drop reserves to less than a nine-year supply for the first time since 1979.
  • The survey shows that the 100 leading oil and gas companies boosted spending on the US upstream last year by 9.3% to $16.5 billion, but the majority of industry outlays are still concentrated overseas.
  • Chevron Corp. led the survey in 1993 worldwide reserves additions, but has announced it is scaling back its spending in Kazakhstan due to uncertainties of moving the oil to market.

Statistics:

  • Estimated shortfall of up to 1.5 billion barrels of oil in 1993
  • Decline in proven oil reserves at end of 1992: 23.7 billion barrels
  • Estimated decline in US natural gas reserves in 1993: 2 trillion cubic feet
  • Decline in proven gas reserves at end of 1992: 165 trillion cubic feet
  • Increase in upstream spending in US in 1993: 9.3%
  • Total upstream spending in US in 1993: $16.5 billion
  • Total upstream spending overseas in 1993: $44.2 billion

Sources:

  • "US Oil and Gas Reserves Decline" by John S. Herold Inc. (no date mentioned)
  • Energy Information Administration (EIA) annual reserves replacement report (no date mentioned)
  • WASHINGTON (no date mentioned) - Reprinted from the original source.