IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v79y2015icp288-297.html
   My bibliography  Save this article

A general improved methodology to forecasting future oil production: Application to the UK and Norway

Author

Listed:
  • Fiévet, L.
  • Forró, Z.
  • Cauwels, P.
  • Sornette, D.

Abstract

We present a new Monte-Carlo methodology to forecast the crude oil production of Norway and the U.K. based on a two-step process, (i) the nonlinear extrapolation of the current/past performances of individual oil fields and (ii) a stochastic model of the frequency of future oil field discoveries. Compared with the standard methodology that tends to underestimate remaining oil reserves, our method gives a better description of future oil production, as validated by our back-tests starting in 2008. Specifically, we predict remaining reserves extractable until 2030 to be 5.7 ± 0.3 billion barrels for Norway and 3.0 ± 0.3 billion barrels for the UK, which are respectively 45% and 66% above the predictions using an extrapolation of aggregate production.

Suggested Citation

  • Fiévet, L. & Forró, Z. & Cauwels, P. & Sornette, D., 2015. "A general improved methodology to forecasting future oil production: Application to the UK and Norway," Energy, Elsevier, vol. 79(C), pages 288-297.
    • Handle: RePEc:eee:energy:v:79:y:2015:i:c:p:288-297
    DOI: 10.1016/j.energy.2014.11.014
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544214012687
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2014.11.014?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Höök, Mikael & Aleklett, Kjell, 2008. "A decline rate study of Norwegian oil production," Energy Policy, Elsevier, vol. 36(11), pages 4262-4271, November.
    2. Smith, James L, 1980. "A Probabilistic Model of Oil Discovery," The Review of Economics and Statistics, MIT Press, vol. 62(4), pages 587-594, November.
    3. Brecha, Robert J., 2012. "Logistic curves, extraction costs and effective peak oil," Energy Policy, Elsevier, vol. 51(C), pages 586-597.
    4. Z. Forr'o & P. Cauwels & D. Sornette, "undated". "When games meet reality: is Zynga overvalued?," Working Papers ETH-RC-12-003, ETH Zurich, Chair of Systems Design.
    5. Y. Malevergne & V. Pisarenko & D. Sornette, 2005. "Empirical distributions of stock returns: between the stretched exponential and the power law?," Quantitative Finance, Taylor & Francis Journals, vol. 5(4), pages 379-401.
    6. Zal'an Forr'o & Peter Cauwels & Didier Sornette, 2012. "When games meet reality: is Zynga overvalued?," Papers 1204.0350, arXiv.org, revised May 2012.
    7. Lynch, Michael C., 2002. "Forecasting oil supply: theory and practice," The Quarterly Review of Economics and Finance, Elsevier, vol. 42(2), pages 373-389.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wang, Qiang & Li, Shuyu & Li, Rongrong, 2018. "China's dependency on foreign oil will exceed 80% by 2030: Developing a novel NMGM-ARIMA to forecast China's foreign oil dependence from two dimensions," Energy, Elsevier, vol. 163(C), pages 151-167.
    2. Berk, Istemi & Ediger, Volkan Ş., 2016. "Forecasting the coal production: Hubbert curve application on Turkey's lignite fields," Resources Policy, Elsevier, vol. 50(C), pages 193-203.
    3. Gori, Fabio, 2016. "Mass and energy-capital conservation equations to forecast the oil price evolution with accumulation or depletion of the resources," Energy, Elsevier, vol. 116(P1), pages 746-760.
    4. Hallack, Larissa Nogueira & Szklo, Alexandre, 2019. "Assessing the exploratory potential in Brazil by applying a creaming curve variant," Energy Policy, Elsevier, vol. 129(C), pages 672-683.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lucas Fievet & Zal`an Forr`o & Peter Cauwels & Didier Sornette, 2014. "Forecasting future oil production in Norway and the UK: a general improved methodology," Papers 1407.3652, arXiv.org.
    2. Spencer Wheatley & Didier Sornette & Tobias Huber & Max Reppen & Robert N. Gantner, 2018. "Are Bitcoin Bubbles Predictable? Combining a Generalized Metcalfe's Law and the LPPLS Model," Papers 1803.05663, arXiv.org.
    3. Fantazzini, Dean & Höök, Mikael & Angelantoni, André, 2011. "Global oil risks in the early 21st century," Energy Policy, Elsevier, vol. 39(12), pages 7865-7873.
    4. Sällh, David & Höök, Mikael & Grandell, Leena & Davidsson, Simon, 2014. "Evaluation and update of Norwegian and Danish oil production forecasts and implications for Swedish oil import," Energy, Elsevier, vol. 65(C), pages 333-345.
    5. Kaiser, Mark J. & Mesyanzhinov, Dmitry V. & Pulsipher, Allan G., 2004. "Long-term infrastructure forecasting in the Gulf of Mexico: a decision- and resource-based approach," Energy Policy, Elsevier, vol. 32(10), pages 1209-1224, July.
    6. Robert J. Brecha, 2013. "Ten Reasons to Take Peak Oil Seriously," Sustainability, MDPI, vol. 5(2), pages 1-31, February.
    7. Rui Vilela Mendes & M. J. Oliveira, 2006. "A data-reconstructed fractional volatility model," Papers math/0602013, arXiv.org, revised Jun 2007.
    8. Mark Lijesen, 2004. "Increasing the reliability of electricity production: a cost-benefit analysis," CPB Document 52.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    9. Bernard, Jean-Thomas & Khalaf, Lynda & Kichian, Maral & Yelou, Clement, 2018. "Oil Price Forecasts For The Long Term: Expert Outlooks, Models, Or Both?," Macroeconomic Dynamics, Cambridge University Press, vol. 22(3), pages 581-599, April.
    10. Tao, Zaipu & Li, Mingyu, 2007. "What is the limit of Chinese coal supplies--A STELLA model of Hubbert Peak," Energy Policy, Elsevier, vol. 35(6), pages 3145-3154, June.
    11. Hernández-Ramírez, E. & del Castillo-Mussot, M. & Hernández-Casildo, J., 2021. "World per capita gross domestic product measured nominally and across countries with purchasing power parity: Stretched exponential or Boltzmann–Gibbs distribution?," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 568(C).
    12. Yang, Tianle & Zhou, Fangxing & Du, Min & Du, Qunyang & Zhou, Shirong, 2023. "Fluctuation in the global oil market, stock market volatility, and economic policy uncertainty: A study of the US and China," The Quarterly Review of Economics and Finance, Elsevier, vol. 87(C), pages 377-387.
    13. Jakobsson, Kristofer & Söderbergh, Bengt & Höök, Mikael & Aleklett, Kjell, 2009. "How reasonable are oil production scenarios from public agencies?," Energy Policy, Elsevier, vol. 37(11), pages 4809-4818, November.
    14. Griffiths, Steven, 2017. "A review and assessment of energy policy in the Middle East and North Africa region," Energy Policy, Elsevier, vol. 102(C), pages 249-269.
    15. Sornette, Didier & Zhou, Wei-Xing, 2006. "Importance of positive feedbacks and overconfidence in a self-fulfilling Ising model of financial markets," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 370(2), pages 704-726.
    16. Aune, Finn Roar & Mohn, Klaus & Osmundsen, Petter & Rosendahl, Knut Einar, 2010. "Financial market pressure, tacit collusion and oil price formation," Energy Economics, Elsevier, vol. 32(2), pages 389-398, March.
    17. Andrew Balthrop, 2016. "Power laws in oil and natural gas production," Empirical Economics, Springer, vol. 51(4), pages 1521-1539, December.
    18. Ekaterina Morozova & Vladimir Panov, 2021. "Extreme Value Analysis for Mixture Models with Heavy-Tailed Impurity," Mathematics, MDPI, vol. 9(18), pages 1-24, September.
    19. Johannes Bollen & T. Manders & Machiel Mulder, 2004. "Four futures for energy markets and climate change," CPB Special Publication 52, CPB Netherlands Bureau for Economic Policy Analysis.
    20. Jakobsson, Kristofer & Söderbergh, Bengt & Snowden, Simon & Aleklett, Kjell, 2014. "Bottom-up modeling of oil production: A review of approaches," Energy Policy, Elsevier, vol. 64(C), pages 113-123.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:79:y:2015:i:c:p:288-297. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.