Saudi Arabia effectively grew its recoverable oil resources by 73 billion barrels this year after lower tax rates for state producer Saudi Aramco boosted the country's estimated prospective resources, Norwegian oil consultancy Rystad Energy said Tuesday.
The new recoverable contingent resources took Saudi Arabia's total recoverable oil resources to 276 billion barrels, regaining the global top spot for oil resources, Rystad said in its annual review of global oil resources.
Saudi Arabia cut Aramco's company tax rate to 50% in March from 85% as part of moves to attract private investors ahead of its planned initial public offering in 2018.
"[Saudi Arabia's] revised fiscal regime should incentivize more aggressive exploration and development drilling in the country," Rystad said.
The only other oil-producing countries to increase their reserves last were Kazakhstan and the US, Rystad said, citing its estimates for prospective resources which includes risked estimates from undiscovered fields.
In the US, recoverable oil resources rose 13 billion barrels with unconventional shale oil making up over half of the country's total oil resources, estimated at 263 billion barrels.
If natural gas liquids (NGLs) were included in the review, Rystad said the US would surpass Saudi Arabia by more than 50 billion barrels of recoverable oil and petroleum liquids.
OIL RESERVE DEFINITIONS
Globally, the world's total recoverable oil resources have risen 29 billion barrels since 2016 to 2.2 trillion barrels, Rystad said, or 73 times the current annual production rate.
Rystad's baseline oil resources estimates use a broader definition of reserves than those from BP's wide-widely referred to estimates of produced oil reserves.
BP estimated last week the world's total proven oil reserves stood at 1.7 trillion barrels at the end of 2016, based on recoverable oil from discovered fields under current economic conditions.
Rystad's oil resources figures include proven and probable reserves as well as contingent reserves from unsanctioned projects and prospective recoverable resources.
Excluding contingent and prospective resources, however, BP's global proven reserves estimate remains 258% higher than Rystad's current assessment of global reserves on a proven and probable basis of 660 billion barrels.
"Public sources of global oil reserves, such as the BP Statistical Review, are based on official reporting from national authorities, who often report resources according to diverse and opaque sets of standards," Rystad said, noting it applies Society of Petroleum Engineers (SPE) standards when assessing reserves and resources.
Rystad said it estimated unconventional oil accounts for 30% of global recoverable oil resources, while offshore accounts for 33% of the total.
As much as 40% of the recoverable oil requires oil prices higher than $80/b to become profitable for the oil companies, it said, but gave no further details of the earnings measure.
