IHS Energy's Report on 10-Year Trends (1993-2002) Shows
Liquids Reserve Revisions and New Discoveries Have Outpaced Consumption

EPSOM, UK, (1 October, 2003) - IHS Energy, the world's leading provider of oil and gas information and consulting services, has released its 2003 World Petroleum Trends (WPT) report, which covers exploration and production (E&P) activity in more than 180 countries. WPT highlights and examines historical petroleum trends year-by-year and presents key oil and gas (E&P) data for the preceding decade (1993-2002).

This year's report marks the 11th successive year that IHS Energy has assembled country, regional and global estimates of oil and gas resources and production and presented them in a comparable manner, allowing a 10-year perspective to be shown. Despite reductions in exploration, reserves and new discoveries have outpaced consumption.

"Our data shows that even though the number of international discoveries have declined, the combination of reserve revisions and new discoveries has exceeded global oil demand over the past ten years. This partly explains the paradox of the petroleum industry's ability to generate excess oil supplies even though new oil discoveries have not come close to replacing demand," said Pete Stark, Vice President, Industry Relations, IHS Energy.

The report highlights:

• The cumulative effect of liquids-reserves revisions and new discoveries has more than kept pace with liquids consumption during the past decade
• In 2003, confirmed liquid resources discovered at the end of 1992 were 416 billion barrels, or 26% higher reserves than estimated at the time
• In 2003, confirmed gas resources discovered at the end of 1992 were 2,300 trillion cubic feet (TCF) or 36% greater resources than estimated at the time
• Upwards revisions to previous global-reserves estimates account for approximately 75% of all additions and only 25% of new discoveries

Estimates of volumes of new hydrocarbon discoveries made in 2002 for the world less North America was almost 6.6 billion barrels of liquids and 30 trillion cubic feet of gas (TCF). Re-estimated figures for 2001 were 10.1 billion barrels of liquids and 48 TCF of gas.

Total world production of liquids in 2002 decreased by 0.7% at 26.7 billion barrels (73.2 million barrels per day) while gas production continued to increase to 97.6 TCF (267.4 billion cubic feet (BCF) per day) or 2.5% above 2001 production. And 2002 marked the second year in a row when new discoveries of gas failed to replace annual production. The North American share of natural gas production (26.1%) was at its lowest for the entire decade, down from a high of 29.4% in 1997. This is almost entirely due to the decline in offshore gas production, down from 29.9% of the global total in 1993 to 20.8% in 2002. However, in absolute terms offshore natural gas production in North America in 2002 was at its highest since 1997.

Onshore gas production has risen fairly steadily throughout the decade but fell by 1.7 bcf/d in 2002 (- 3%).

Changes in liquid production in 2002 varied from region to region. North America, Saharan Africa, Far East and Australasia and the CIS all showed slight production increases while Latin America, Europe, Central and Southern Africa and the Middle East were down slightly. In particular, the USA showed a modest production increase above 2001 figures - up slightly to 16.4% of the global total, and Russia, for the fourth year in a row, also expanded production 6% during the period. Compared with 2001, gas production in 2002 increased in all regions with the exception of Central and Southern Africa and the Middle East.

In 2002, there were only two giant discoveries (i.e. exceeding 500 million barrels of oil equivalent). These were Kikeh - an oil discovery offshore Sabah in east Malaysia, and Tomoporo 9, an oil and gas discovery in Venezuela's Maracaibo Basin. Eight other discoveries are likely to exceed 200 million barrels of oil equivalent: Dhirubai 1 and 3 (gas) in India, Dorado (gas and condensate) in Venezuela, Cachalote (oil and gas) in Brazil, Usan, Doa and Bolia (all oil and gas) in Nigeria, and Ca Ngu Van (oil and gas) in Vietnam.

Significantly, the liquids discovered in Malaysia and Venezuela accounted for 9% and 8%, respectively, of the total global liquids reserves added in 2002. Gas discoveries in India and Indonesia accounted for 17% and 10%, respectively, of the total global gas reserves added in 2002.

REMAINING RESERVES OF LIQUIDS AND GAS
IHS Energy estimates that, in 2002, remaining global reserves of liquids and gas (conventional gas only) stood at 1,153 billion barrels and 6,662 TCF, respectively. In 2002, reserves to production ratios (R/P) for liquids and gas now stand at 43 years and 68 years, respectively.

OPEC reserves of liquids are almost double those of non-OPEC countries, 739 billion barrels compared to 414 billion barrels, giving R/P ratios of 71 years and 25 years, respectively. OPEC and non-OPEC reserves of gas are almost the same (approximately 3,300 TCF) but their respective R/P ratios are 193 years and 42 years.

RESERVES REPLACEMENT BY NEW-FIELD DISCOVERIES
The following table gives the percentage of liquids produced that were replaced by new-field discoveries in the decade. The countries chosen are the top-15 non-OPEC liquids producing countries in 2002. Canada and the United States are excluded because comparable data are not available.

These figures represent IHS Energy estimates found in new-field discoveries and exclude any revisions made to fields discovered before 1993.

IHS Energy estimates of volumes of new discoveries for the year were:

EXPLORATION PERFORMANCE
The number of new-field wildcat wells completed in the world, excluding North America, fell from 1,147 in 2001, to 956 in 2002. The number of oil and gas discoveries reported fell from 413 to 397, hence the success rate increased from 36% to 42%. The number of these discoveries likely to be deemed commercial is not known at this time.

For North America, in terms of absolute numbers, fewer wildcat wells were drilled in than at any time in the previous nine years, while internationally only 1999 saw less wells drilled.

OTHER ACTIVITIES
In the world, less North America, both 2D and 3D seismic activity decreased in 2002 by 37% and 16%, respectively, compared with 2001. Also in 2002, the numbers of new licence awards made decreased by 5% compared with 2001. The number of licences active during 2002 was comparable to that in 2001.

The WPT is available within IHS Energy's Petroleum Economics and Policy Solutions (PEPS) on-line subscription service. The entire WPT Report is available for purchase from IHS Energy. For more information, please contact sales.energy@ihs.com.