Giant oil field decline rates and their influence on world oil production

by Mikael Hook, Robert Hirsch, and Kjell Aleklett

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It is well known that oil production from many oil fields worldwide is in decline and that more fields transition into decline each year. In roughly mid 2004, total world oil production ceased to expand. Instead, new production has only succeeded in keeping world oil production relatively flat (Figure 1).

A recent analysis by Cambridge Energy Research Associates estimated that the weighted decline of production from all existing world oil fields was roughly 4.5% in 2006 (CERA, 2007), which is in line with the 4-6% range estimated by ExxonMobil (2004). However, Andrew Gould, CEO of Schlumberger, stated that an accurate average decline rate is hard to estimate, but an overall figure of 8% is not an unreasonable assumption (Schlumberger, 2005). T. Boone Pickens (2008), agreed with Gould in recent testimony before the US Senate Committee on Energy and Natural Resources. Duroc-Danner (2009) gives a blended average decline rate for oil and gas today of about 6%. The International Energy Agency (IEA) came to the conclusion that the average production-weighted decline rate worldwide was 6.7% for post-peak fields (IEA, 2008), which means that the overall decline rate would be less, since many fields are not yet in decline. In this study we estimate world decline rate behaviors based on the Uppsala University giant oil field database, described in detail by Robelius (2007). Given the dominance of the giant oil fields, understanding giant oil field behavior provides important insights into likely future total world oil production.

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