It might seem obvious, but it’s worth saying. You have to discover the oil before you can extract it. If a picture tells a thousand words, then this ‘picture’ could fill volumes! 

The chart attached shows the global discovery rate for conventional oil on a year-by-year basis measured in Billion of Barrels (Gb) of oil per year. 

The global discovery of oil really began to gather pace in the second half of the 1930’s. Prior to this, the bulk of oil found was within the lower 48 states of the US and in relatively small amounts. The first ‘MegaGigantic’ field (greater than 50 billion barrels or 50Gb) to be found was Greater Burgan in Kuwait in 1938 (Burgan was estimated to contain 87Gb and would be one of only two fields exceeding 50bn barrels ever found).

Then followed WW2, and the drills stopped. 

Immediately after the end of WW2, the drilling resumed and another monster was discovered, this time in Saudi Arabia (1948). Ghawar at 89Gb would never be bettered. (Ghawar remains the single largest producer of oil in the world producing over 5mb/d, over half of current Saudi production). 

To give a scale to these two MegaGigantic fields, the third largest fields ever found (Samotlar in Russia in 1961) and fourth (Safiniya in Saudi Arabia in 1951) at 20Gb and 18Gb respectively are relatively paltry in comparison. Nevertheless, the world has been, and continues to be HUGELY reliant on these four monsters! 

So, only two MegaGigantic fields (+50Gb) have been found. The largest (Ghawar) is 60 years old and the second largest (Greater Burgan) is now 70 years old. 

Only 50 fields of ‘SuperGigantic’ size (5bn-50bn barrels) have been found, the vast majority prior to the 1980’s.

Approximately 500 ‘Gigantic’ fields have been found (500mb – 5Gb) but even these relative minnows are getting harder to find. 

There are 70,000 producing oil fields around the world, yet over half the worlds reserves are found in the largest 100. All but two of the 100 biggest fields were found prior to 1970 (exceptions being Cantarell in Mexico and Kashagan in Kazakhstan). The bulk are found in the Middle East.

Of the oil produced today, 80% comes from fields found prior to 1973. 

Once 12 fields produced over 1 million barrels of oil per day. Now there are only 3. Fifty years ago, the world discovered 30 billion barrels per year and produced 4 billion. In 2005, the inverse became true.

Saudi Arabia is critical to the global supply of oil, yet 90% of it’s production comes from 7 fields that are on average 51 yrs old. As previously stated, the oldest and the biggest of those fields (Ghawar) represents half of Saudi Arabian reserves and half it’s production (c5mb/d).

The thick black line on the chart shows global production of conventional oil – the line has been on an upward path since the late 1800's. However, just as discovery peaked in the 1960’s, so too will production.

 And then it will fall.

How do we know that?

We’ve seen it multiple times in many regions. High profile examples include:

• US: discovery peaked in the 1930s – production peaked in 1971
• UK: discovery peaked in 1975 – production peaked in 1999
• Mexico: discovery peaked in 1976 - production peaked in 2004
• World: discovery peaked in 1960s – production will peak in 20??

The peak of oil discovery was passed in the mid-1960's. The world started using more oil than was found in new fields for the first time in 1981. Today we are using 3-4 barrels of oil for every barrel we find. A clearly unsustainable situation!