Exploration World April 2015

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APRIL 2015

ARCTIC OIL AND THE 21ST

CENTURY LAND GRAB

THE 10 LARGEST OILFIELDS IN THE WORLD

THE OIL PRICE ROUNDTABLE

EDITOR’S COMMENT

“IN THE MIDST OF CHAOS, there is also opportunity.” – Sun Tzu

If you haven’t heard about the downturn in oil prices and the ensuing financial chaos in the industry by now, then you’re probably not one of our readers.

In our last issue, I congratulated those who made it through the price crash with a degree of “measured optimism.” Well, now having been proven wrong— thankfully not in a spectacular way—about the end of the downturn, I take back my congratulations. Looks like we’ve all got a bit longer to go.

However, as our friend Sun Tzu might say, that may not be as bad as it sounds.

In this issue, you’ll hear the experts weigh in on the shape the market is taking and what opportunities for growth still present themselves in this fiscally strenuous time. You’ll hear about the 21st century land grab quietly happening in the Arctic over its petroleum wealth. Finally, you’ll read about 10 of the most important oilfields in the world.

As always, thank you for reading.

Ian Hanner Editor ian.hanner@wdmgroup.com

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CO CN OTNETN ETNST S FEATURES

6 Exploration and Drilling

Oil Price Roundtable: Adapt to Survive

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18 Business & Operations

Why Arctic Oil Seems to be Putting Northern Nations on Combat Alert

Business & Operations

Why Arctic Oil Seems to be Putting Northern Nations on Combat Alert

April 2015

26 Top 10

10 of the Biggest Oil Fields in the World

26 10 of the Biggest Oil Fields in the World

Exploration and Drilling

Oil Price Roundtable: Adapt to Survive

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OIL PRICE ROUNDTABLE

ADAPT TO SURVIV How long will the advantage last?

W R I T T E N B Y: N E I L P O X O N , M A H E S H K O N D U R U , K R I STI A N LI E R A N D G RA E M E LE W I S

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E X P L O R AT I O N & DRILLING EVERYBODY’S TALKING ABOUT the fall in oil global prices, but what does it really mean for producers, operators and the service companies that support them? Here, CEO Neil Poxon and CFO Mahesh Konduru of ProSep, Investment Director Kristian Lier of Energy Ventures and Group Commercial Director Graeme Lewis of Air Energi give their views on some of the more pressing issues.

What’s your assessment of the current oil price and its impact on the energy industry?

Kristian Lier: I think we could be in for a bit of a bumpy ride for a while.

The industry has to adapt to a new situation and become more efficient – not just in terms of production or squeezing suppliers, but in the way they run their organization. One of my biggest concerns is access to capital. Oil majors should have a strong balance sheet after a lengthy good run and as listed companies they will always find ways of attracting capital. Smaller companies don’t have the same resources. It’s a perfect climate for M&A so I expect to see consolidations in the next few years.

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Neil Poxon: Interestingly, the share price for some oil majors is not far off their all-time high. And activity in key areas shows no sign of slowing down – so it’s definitely not all doom and gloom. In recent months, both the Tubular Bells and Jack/St. Malo projects in the Mexican Gulf have started production – even while the oil price was falling. The oil majors have invested over decades and, of course, many have huge downstream operations that benefit from a lower oil price which helps balance things out. It’s the smaller independents, particularly onshore, who may struggle.

Mahesh Konduru: A lot of the oil and gas players are using this as an opportunity to become more efficient. One way they’re doing that is reducing their cost base in the expectation that the oil price will remain low for some time. Any investment will focus far more on operations than longterm capital projects.

Graeme Lewis: It is a constantly moving situation. We’re starting to see rates for contractors and permanent hires being cut. But when the cycle begins again, then the same

O I L P R I C E R O U N D TA B L E : A D A P T T O S U R V I V E

The codeveloped Hess Corp. and Chevron Tubular Bells project in the Gulf of Mexico. (Hess Corp.)

Graeme Lewis, Group Commercial Director at Air Energi.

Mahesh Konduru, CFO at ProSep.

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E X P L O R AT I O N & DRILLING problems will be there – notably an aging workforce. If this hiatus in activity goes on for much longer than six months, then people will leave the industry for good. There will be a greater skills shortage and the price of labor will go up.

Neil Poxon, CEO at ProSep.

Kristian Lier, Investment Director at Energy Ventures.

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How do you think the Middle East will be affected?

NP: Given their vast resources, Middle Eastern countries are best placed to emerge from this relatively unscathed. It is primarily Russia and some of the mature basin producers that are going to suffer.

MK: Producers with a higher breakeven price are going to be much more affected. That means not just Russia, but places like Venezuela and Nigeria whose economies depend on a high oil price.

KL: I think it depends in part on how long this will last. We’re seeing the impact in the United States and the North Sea already, while the Middle East is less affected, but if prices remain at their current level then all markets will follow suit.

How important is the Middle East to your operations?

O I L P R I C E R O U N D TA B L E : A D A P T T O S U R V I V E

NP: On a personal level, I was very keen to invest in the Middle East. I lived there for 12 years and I know the environment well. It’s a huge market irrespective of the oil price. With its commitment to continued production, it presents a significant opportunity for our technology, so it’s key to our strategy.

MK: We expect the Middle East will account for a substantial portion of our revenue. It’s a growth business, which is exciting. Although we predict modest returns this year – around 10 percent of our revenue – we plan to get that two or three times higher in the next few years. The projects we are chasing have not been affected and our pipeline for this year is still in play. But we have to remain agile and able to adjust to whatever market conditions bring.

KL: There’s no doubt that the Middle East is a very important piece of what we’re trying to accomplish. The willingness to blow through this and keep activity high means exposure to the Middle East is no bad thing.

GL: It is a vital part of our business mix. We’ve got a sizeable operation based in Doha with offices in the UAE, Iraq and in Bahrain. It counts for about

20 to 23 per cent of our revenues. The oil price hasn’t affected our business in the region to the same extent as other parts of the world.

MK: Interestingly, the Middle East is proving to be better at buying innovative products than the rest of the world. Our solutions are being very well received by operators on the ground. They see that working with us will make their lives easier and deliver substantial opex savings.

GL: We have a similar view. There is an opportunity for us to bring innovation to staffing and people management, where the Middle East has tended to lag behind other countries. There’s clearly a desire to be more efficient. There’s greater transparency about how costs are calculated and the levels of service that are delivered. It’s very positive.

Where else do you see the oil price having an impact?

MK: This is not really a regional issue. We’re back to the idea that longterm thinkers with a low cost base are least affected – and that cost base is dependent on the source of oil, whether it’s onshore, shallow or deep water and the technology used.

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A view of the Jack(slash)St. Malo FPU from the flare boom. (Chevron) NP: Exactly. Areas of deep water are likely to face minimal impact because they are huge investments costed over decades. That means operators in West Africa and the Gulf of Mexico are better placed than those in mature fields in the North Sea and onshore in the United States – although it’s worth noting that a North Sea operating license comes with obligations to maintain production. I think the pain will be greater for onshore operators, but there are so many different variables to consider. For example, production rates for new rigs in the [America’s] Permian basin have surged by more than 50 per cent in the past year. In Canada, operators are still 12 April 2015

planning to increase shale and tar sand production and capex through 2015 because they’ve factored in a lower price for heavy oil for years. So it’s by no means clear cut.

In terms of the project life cycle, where do you think the biggest impact will be?

KL: Pretty much everywhere within production enhancement. Seismic will be affected, especially in the United States. Exploration will be affected and probably decommissioning.

MK: I think E&P will be the first domino to fall – we’re already seeing the signs. Then we’ll see cut-backs cascading down through

O I L P R I C E R O U N D TA B L E : A D A P T T O S U R V I V E

the midstream to oil services.

Organizations will start to shelve projects early and then bring them back online when they become cost effective again.

NP: My experience in the North Sea tells me that decommissioning always suffers in environments like this – it’s an expense that can be put off. Generally, it’s capital projects with budgets that are yet to be allocated that are the ones at risk. But major operators tell us that they are postponing not cancelling.

What solutions do you think are going to come to the fore as a result of the current market situation?

KL: The industry is not known for jumping on new products and solutions. It’s also tempting to say that innovation is linked to access to capital – if the capital dries up there’s going to be less money spent on innovation and research. But the flipside is that companies have to enhance production and bring cheaper, more streamlined products to market. That’s probably going to happen quite a bit.

NP: Low oil-price environments always see a surge in innovation

and technology, usually to solve here-and-now issues that have lower priority when prices are higher. Companies recognize that this is what can get them out of the slump. I think we’ll see interesting solutions particularly in the drilling and production areas to increase efficiencies in top-side production.

KL: Solutions that swing capex to opex will be winners. Or those that can perform a key task better and cheaper – but only if they do not require a big capital commitment. They have to be solutions that can be phased seamlessly into current operations and give the customers cost savings from day one.

GL: In terms of people, it’s going to be about finding cost-reduction solutions that aren’t necessarily about rate reductions but improved efficiencies. I see technology being deployed that will dramatically improve the way people are managed – and actually bring the oil and gas industry in line with other comparable sectors.

Are there any specific areas where you expect more innovation?

MK: Really smart companies are 13

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born out of a crisis – that’s true of oil and gas in particular. Taking care of produced water problems or clean-up for natural gas, for example, can make older wells viable again. So I think we’ll see solutions that enable operators to really maximize revenue from existing infrastructure coming to the fore.

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KL: I think we’re going to see innovation in business models too.

More functions will be outsourced.

There could be a way of extending that idea to equipment, with operators being able to rent equipment or deploy it as a service with an associated fee.

That could be a win-win for everyone.

O I L P R I C E R O U N D TA B L E : A D A P T T O S U R V I V E

What positives do you think can be garnered from the current situation?

NP: I think many in the industry should view the situation in a positive light. There are opportunities to create streamlined businesses, develop leaner and more efficient operations, reduce waste and develop a more responsive service industry. That’s got to be good for the industry as a whole.

KL: What we’re seeing now is a natural consequence of a good run for the industry. There’s been a rapid escalation in oil price over the past 10 to 15 years which has been tracked by an equally rapid cost escalation. That led to inefficiencies and it is almost inevitable that many of those inefficiencies will be eliminated.

Arguably we’ll see more better-run businesses in the longer term.

GL: The industry’s cost structure had gotten out of control. Now we’re seeing more measured costs which will help deliver more long-term, financially viable projects. That should create better career opportunities with more choice, more training and more development.

There’s actually been a more measured approach to retaining staff and skills this time around, which is encouraging.

What can companies do to mitigate their risk?

MK: Betting on a high oil price is never prudent. Organizations that have run their financial models based on more moderate numbers and have structured their capital accordingly will survive. Being efficient and conserving cash is the best way to mitigate risk.

KL: Suppliers probably have to spend more time with their customers to get a more in-depth understanding of what their needs are - it will take harder work and more patience to get a final purchase decision. More agile business models are also going to be important – for example hosted services, flexible contracts or some degree of outsourcing. That’s probably how to protect revenues in the future.

GL: One: hold on to good staff.

There are many ways of ensuring that key personnel have a long-term interest in a project or the organization and businesses should focus on retaining skills and experience within their operations. Two: use technology to drive greater efficiencies in staffing and look at other industries who have led the way. Three: when outsourcing, avoid box-ticking exercises and a ‘lower price wins’ mentality, which only 15

E X P L O R AT I O N & DRILLING stores up problems for the future.

How can the industry protect itself from price shocks in the future?

KL: As a private equity guy, I would say diversify. Have high gross margins on products, try to be lean on the cost side and make sure you’re well capitalized. That comes with innovative products, innovative services, exemplary execution and close relationships with the customer.

MK: It’s always good to be planning your annual and two-, three- or fiveyear budgets around a modest oil price and a modest cost base.

NP: I agree. There are plenty of indications that the oil majors have taken that on board and budget longterm investments around the 40 to 60 dollar barrel range.

MK: It’s easy to say from where I sit, but I would say modest aggressiveness is always better than being super aggressive.

This article was produced by Aspectus PR in cooperation with ProSep, Energy Ventures and Air Energi.

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F E AT U R E A R T I C L E S H O R T E N E D H E A D L I N E

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BUSINESS & O P E R AT I O N S

WHY AR TO BE PUT NATIONS ON

Wit surro

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April 2015

RCTIC OIL SEEMS TTING NORTHERN N COMBAT ALERT

th an abundance of oil and gas, tensions ounding the Arctic are slowly heating up.

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BUSINESS & O P E R AT I O N S AS KNOWN SOURCES of oil are depleted, previously inaccessible areas of hydrocarbon wealth are becoming prospective targets of exploration. Namely, the Arctic.

Under its seas and ice rest some major deposits of oil. Based on collected data, many analysts think there’s a whole lot more that we haven’t seen yet.

Take for example the U.S. Geological Survey (USGS), which concluded in a study published in 2008 that the areas north of the Arctic Circle contained an estimated 13 percent of all undiscovered conventional oil and 30 percent of all undiscovered conventional natural gas.

“Using a geology-based probabilistic methodology, the USGS estimated the occurrence of undiscovered oil and gas in 33 geologic provinces thought to be prospective for petroleum,” the report read. “The sum of the mean estimates for each province indicates that 90 billion barrels of oil, 1,669 trillion cubic feet of natural gas and 44 billion barrels of natural gas liquids may remain to be found in the Arctic, of which approximately 84 percent is expected to occur in offshore areas.”

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WHY ARCTIC OIL S

Far from the first time an organization has posited the existence of oil beneath the Arctic, the study was one of the first to put an estimate on how much was present. It’s important to note that the USGS excluded nonconventional types of petroleum from that estimate. While oil sands, coal-bed methane and oil shale likely play a relatively small role in the Arctic’s total resource wealth, the exclusion of gas hydrates could mean that the actual level of natural gas present in the region is significantly higher than estimated.

The study also only accounted for what portion of estimated hydrocarbons would be recoverable with current technology.

Why All This Matters While the Shale Revolution and a return to relative normality in certain key oil-producing countries have flooded most of the world with unusually cheap oil since the price began its more than 50 percent tumble in June 2014, humanity as a whole is slowly running out of crude.

By virtue of the fact that oil and natural gas take millions of years to form under outstanding heat and

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pressure, it shouldn’t shock many to know that we’re using it faster than it’s being replenished. In fact, oil and gas giant BP states that based on currently proved oil reserves, the world has about 53.3 years of the stuff left.

That leaves plenty of time for most of

us, but out of necessity, corporations and countries alike tend to be longterm planners.

For oil and gas companies with the technology and expertise to explore in the Arctic, the region represents a tremendous business opportunity 21

BUSINESS & O P E R AT I O N S

WHY ARCTIC OIL S

Michael Schwartz

A Norwegian coastal ranger admiring the northern lights during Cold Response. (Morten Opedal, Norwegian Navy)

in terms of long-term production. As global reserves of oil are depleted, the North Pole could add a hefty amount to global supply for years to come.

Despite that, the U.S. Energy Information Administration (EIA) questions the business sense in the prospect.

“Studies on the economics of onshore oil and natural gas projects 22

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in Arctic Alaska estimate costs to develop reserves in the region can be 50 to 100 [percent] more than similar projects undertaken in Texas,” the EIA stated in 2012.

The EIA stated that specialized equipment needs, isolated locations with “long supply lines and limited transportation access from the world’s manufacturing centers,”

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poor construction conditions, higher employee salaries and more serve to make Arctic development significantly less profitable.

None-the-less, certain oil majors seem intent on making it work. One notable example, Royal Dutch Shell has been pressing hard to open up Arctic Alaska to exploration, having suffered setbacks in 2012 when its

drilling rig, Kulluk, ran aground off of Sitkalidak Island. Undeterred, the company plans on resuming exploration activities this summer.

The Arctic Land Grab Exploration in the Arctic is proving more complicated than simply granting companies permission to drill. As it turns out, land claims to the 23

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A Norwegian ranger scouts for enemy activity from an observation post during Cold Response. (Torbjørn Kjosvold, Norwegian Armed Forces) Arctic are rather disputed.

According to Duncan Depledge, an Arctic geopolitics researcher writing for The Conversation, territorial claims over ocean space have been limited to 12 nautical miles from shore with an additional 200 miles of exclusive economic zones (EEZ) since 1982 under the United Nations Law of the Sea Convention (UNCLOS).

Commercial activities, including oil production, would be allowed within the country’s EEZ. The Conversation added that countries could apply for an extension of their EEZ boundaries by an additional 150 nautical miles if they could scientifically establish that their 24

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continental shelf extended past the original 200.

Today, UNCLOS is being used

by Denmark, Norway, Canada and Russia to stake claims over portions of the Arctic Ocean and its seabed by asserting their continental shelves extend past 200 nautical miles into the region. The United States, also trying to establish some level of claim to the Arctic through Alaska, has yet to ratify UNCLOS and therefore cannot use that provision.

The continental shelf claims submitted by these nations pose a problem: what happens when claims overlap?

In 2008, all five of these nations issued

the Ilulissat Declaration, according to The Conversation, which constituted a pledge to settle overlapping claims in an orderly fashion.

“Among the claimants, Russia has been asked by the UN to submit further scientific evidence in support of its case,” The Conversation published. “This has not yet happened to the other states, but since it will take time for their claims to be assessed, this may yet change. Until the [United States] ratifies UNCLOS, it can’t submit a claim.”

On the darker side of this issue, it appears these countries are turning their military attention toward the Arctic, running extensive war games to assess strategic capability in the region. One such operation, called Cold Response, is the Norwegian-led exercise in northern Norway that saw more than 16,000 soldiers from 16 nations, including the United States, practice warfare in the extreme cold in 2014.

Dwarfing those recurring exercises, Russia has frequently held war games of its own in the region while upgraded Soviet-era military positions along the “Russian Arctic.” Now, with sanctions against Russia over its involvement in Ukraine piling up and relations with the

West becoming frigid, it seems Russia is keen on displaying its military might in the region.

On March 16 Putin called over 45,000 Russian soldiers, along with many aircraft and submarines, to full combat readiness in a display of superiority over the Norwegian exercises, according to Reuters.

While tensions heat up in one of the coldest parts of the planet, the question of who will come to control the Arctic’s oil and gas wealth have never been less clear. The only clear thing is that the region will continue to be of significance for years to come as humankind continues to utilize fossil fuels.

Swedish troops on foot patrol struggle through a blizzard during Cold Response. (Lars Magne Hovtun, Norwegian Armed Forces)

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TOP 10

10 OF THE B FIELDS IN T These oil behemoths account for mass

Written by: Ian

BIGGEST OIL THE WORLD ive shares of the world’s oil production.

n Hanner 27

TOP 10 In the “Game of Oil” the players are well-known and produce staggering amounts of crude to keep a resource-thirsty world supplied through bull and bear markets, but less iconic to most are the individual fields driving that success.

With reservoirs holding so much crude that it’s difficult for the human brain to comprehend their vastness except as numbers on paper, these “superfields” power the modern era of technological development—and some have been doing it for decades.

In today’s globalized world of Skype and online shopping, the oil trade is largely handled by major international corporations that utilize their vast resources, logistics and technical knowledge to extract oil that it usually traded on an international market. And when countries want to take their oil wealth squarely into their own hands, they tend to introduce national oil companies to do the same thing, even bringing those private companies in on projects for their expertise.

But it’s important to understand 28 April 2015

the enormous transformative powers associated with oil wealth throughout the last century.

Perhaps nowhere is it more evident than in Saudi Arabia, where the discovery of crude propelled the nation from a seminomadic civilization to the wealthy country it is today.

Exploration World recently ranked the 10 oil richest nations in the world by their 2014 proved reserves. We wanted to take a look at some of the biggest, most important oil fields in each of those nations and here they are. It’s important to note that the estimated production rates are collected from various sources and as such, methodology in calculating those totals may vary.

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Nigeria – Agbami Field (~250,000 barrels per day)

Proved by Texaco in 1998, this massive offshore development cost approximately $3.5 billion to bring online. The offshore field

10 OF THE BIGGEST OIL FIELDS IN THE WORLD

The Agbami FPSO serves as the base of operations for one of Nigeria’s most important offshore fields. (Chevron)

field decline and to maintain production capacity. Drilling, which started in 2012, is expected to continue through 2015.”

9 sits under 4,800 feet of water with a total well depth of 15,683 feet.

Under that much water, subsea production equipment endures just less than 2,150 pounds per square inch of pressure. Today, the field’s ownership is divided between Chevron (68.15 percent), Statoil

(18.85 percent) and Petrobras (13 percent), with Chevron operating the field through its Nigerian subsidiary Stat Deep Water Petroleum.

According to Chevron, “A 10-well Phase 2 development program is expected to offset

Libya – Sarir Field (~420,000 barrels per day before 2011 conflict)

2014 was a relatively good year for Hess Corp. despite oil price downturns in the 3rd and 4th quarters. The business reported a loss of $8 million net income in the 4th quarter of 2014, but still managed to rake in a total of $2.317 billion net income for the year.

Perhaps most important to Hess Corp.’s 2014 evaluation is the success of their flagship project Tubular Bells. The deepwater Gulf of Mexico, Hess-operated project developed alongside Chevron came online in November to an estimated production capacity of 50,000 barrels of net oil equivalent per day

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Russia – Samotlor Field (~750,000 barrels per day) 29

TOP 10 Russia’s largest oil field and the sixth largest in the world, Samotlor is a behemoth in the world of hydrocarbons. Owned by Rosneft, the field was previously held by TNK-BP until it was bought out in 2013. Discovered in 1965, production at the field started only four years later. During the Soviet Union’s power, Samotlor supplied a major share of the Communist nation’s oil. While estimates vary, best guesses place total production from the field to-date at roughly 2.6 billion barrels of oil.

According to Oil & Gas Eurasia, the field has total remaining proved reserves of around 4 billion barrels, meaning Samotlor will likely be producing for years to come.

fourth largest in the world— second largest out of offshore fields. Upper Zakum is owned by the Zakum Development Company, a joint venture including ExxonMobil (28 percent), Japan Oil Development Company (12 percent) and ADNOC (60 percent), according to Offshore Technology.

The production capacity at the field is likely to increase to somewhere around 750,000 barrels of oil per day upon completion of the UZ750 Project, a major facility expansion costing around $10 billion. According to Offshore Technology, this project will keep the field producing at that level for another 25 years upon completion.

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UAE – Upper Zakum Field (~650,000 barrels per day)

Discovered in 1963, nothing about the Zakum field could be called small. With oil in place estimated at around 50 billion barrels, the offshore field is currently thought to be the 30 April 2015

Kuwait Burgan Field (~1.3 million barrels per day)

Perhaps most emblematic of Kuwait’s historic Burgan field are the images of massive towers of flame and smoke that came out of Operation Desert Storm when the Iraqi occupiers set fire to the wells

10 OF THE BIGGEST OIL FIELDS IN THE WORLD

while retreating. The field itself is the second largest in the world, though it’s the first largest sandstone reservoir by both reserves and production, according to GEOExPro. The discovery of the field dates back to 1912 when geologists working on behalf of the Anglo-Persian Oil Company began surveying areas in Kuwait known for abundant bitumen seeps. However, there would be another two decades of negotiations before first drilling would take place.

At the height of its production between 1970 and 1973, the field produced as much as 2.4 million barrels of oil per day, although that level has fallen to roughly 1.7 million barrels per day since in response One of the many wells in Kuwait’s Burgan field that were ignited by retreating Iraqis during Operation Desert Storm.

(Kuwait Oil Company)

to market conditions, Faroul al-Zanki, chairman of the Kuwait Oil Company, said in 2005. Alternatively, the U.S. Energy Information Administration (EIA) estimates daily production hovers somewhere around 1.3 million barrels.

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Iraq – Rumaila Field (~1.34 million barrels per day)

The Rumaila supergiant oil field was discovered in 1953 by the Iraq Petroleum Company, a joint venture of the companies that would become Royal Dutch Shell, Total, BP and ExxonMobil. While estimates vary, BP—which is once again involved in the field after a 35 year period where foreign oil companies were not allowed in Iraq—placed the field’s daily production rate at about 1.34 million barrels, up from 950,000 in 2009 when BP was brought back in.

“Rumaila now delivers more than 40 [percent] of Iraq’s oil and accounts for over 50 [percent] of Iraq’s budget revenues,” BP said.

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The Ratqa Degassing Station at the Rumaila oil field in Iraq.

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Iran – Marun Field (~520,000 barrels per day)

The massive onshore Marun field was discovered in 1963. The largest field in Iran, Marun produced an estimated 520,000 barrels per day in 2014. This information is difficult to verify because of the lack of cooperation stemming from U.S.-led sanctions on Iran over its prospective nuclear program. Iran’s daily production rate is the second highest in OPEC, trailing only to Saudi Arabia.

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Canada Athabasca Field (~1.98 million barrels per day)

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While difficult to call the Athabasca oil sands a singular field, it would be inaccurate not to refer to the Oil Patch as Canada’s most important oil producing region. According to Alberta’s energy department, the region produced roughly 1.98 million barrels of oil per day in 2013. Since the oil produced in the oil sands tends to be much thicker than average and diluted with various particulates, enhanced oil recovery techniques are necessary to stimulate the flow of oil up a well. These techniques typically involve pumping high temperature steam into reservoirs to reduce the viscosity of the crude.

The sprawling Athabasca oil sands in Alberta, Canada.

10 OF THE BIGGEST OIL FIELDS IN THE WORLD

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Saudi Arabia – Ghawar Field (~5 million barrels per day)

Dubbed “The King of Giant Fields”

by GEOExPro, Ghawar is perhaps the most iconic oil field in the world.

Situated in Saudi Arabia, it is the single largest field on Earth, with oil in place calculations placing the total amount of oil in Ghawar between 190 to 300 billion barrels. Discovered by Standard Oil of California (which would later become the Arabian American Oil Company and much later Saudi Aramco) in 1940, this field alone accounts for about 62.5 percent of the nation’s total production.

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Venezuela – – Bolivar Coastal Field (~500,000 to 2.6 million barrels per day) Discovered in 1917, the Bolivar Coastal Field in Venezuela produces roughly 2.6 million barrels of oil per day, according to OilVoice. This number is disputed by the EIA, which placed Venezuela’s total daily production rate at 2.49 million barrels in 2013, making it the 12th largest producer of petroleum despite having the largest reserves. Further uncertainty is cast upon the field’s production rate by Venezuela’s own oil company PDVSA, which stated that the entire oil producing region that includes the Bolivar Coastal Field had a combined output of roughly 620,000 barrels per day in 2010. The majority of exports from this field head to United States.

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