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The Reserve-Production Ratio

A good concise examination of the significance of the reserve production (R/P) ratio for the future availability of oil can be found in a short paper by Edward W. Erickson in the Energy Journal (1985). He notes that the worldwide R/P ratio is 35, but this ratio is not uniform across the world. For the three core countries of the Gulf (Saudi Arabia, Kuwait, and the United Arab Emirates) it is 100. For the rest of the world it is 25, although according to my calculations, for the world outside OPEC and the communist areas it may be close to 18. Furthermore, with the fall in OPEC production that has taken place over the past few years and the rise in production outside of OPEC, about half of the world oil output is now generated in areas where the aggregate R/P ratio is less than 20.

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Energy Specializations: Petroleum – Exploration and Production

JEL Codes: Q31: Nonrenewable Resources and Conservation: Demand and Supply; Prices, Q41: Energy: Demand and Supply; Prices, Q40: Energy: General, Q38: Nonrenewable Resources and Conservation: Government Policy

Keywords: Reserve/production ratio (R/P), Oil production, Reserve depletion

DOI: 10.5547/ISSN0195-6574-EJ-Vol8-No2-11

Published in Volume 8, Number 2 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


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