Discovered (or known) resources can be divided into proved reserves and prospective or unproved (probable and possible) resources. ‘Proved reserves’ are the quantities of oil or gas from known reservoirs and expected to be recoverable with current technology and at current economic conditions. Prospective resources are those that may be recoverable in the future with advanced technologies or under different economic conditions. The application of these distinctions is becoming blurred, For example, in 2003 Canada restated its reserves including its enormous non-conventional oil or tar sands with its conventional oil reserves.
The global energy community is currently engaged in debate about the extent of the world’s remaining oil reserves and the rate of their depletion. Traditional orthodoxy is being challenged and the actual definitions of the resource itself and of the term ‘reserves’ are under scrutiny.
Some experts argue that worldwide conventional oil production will peak within the next few years. This prediction is based on a methodology advanced by M King Hubbert, which concludes that while the production of oil can increase for some period of time, it eventually reaches a maximum and then declines until the resource is totally depleted. In 1956, Hubbert used this methodology to predict correctly that US oil production would peak in the early 1970’s.
However, others argue that, while conventional resources may be limited, the world has enormous resources of unconventional oil which are increasingly competitive with conventional crude. One outstanding example is the case of Canada’s oil sands. However, shale oil has been attracting a lot of attention following breakthroughs in hydraulic fracturing used in shale gas production.