Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The World Needs 390 Billion Barrels of New Oil Production by 2035

Page 1 of 2

Photo credit: Anadarko.

Production from legacy oil wells is declining each year. At the same time, demand from emerging markets is rising rapidly. When those two things collide, it leaves a production gap of 390 billion barrels of oil that energy companies need to make up between now and 2035.

Just to put that number into some perspective, current U.S. proven oil reserves, which are 12th in the world, were just 29 billion at last count. That means the world’s oil companies have a lot of work to do if they want to add enough production to both offset declines while meeting growing demand. The following slide shows our current conundrum.

Source: Chevron Investor Presentation (link opens a PDF).

The good news is that at last count, the world had nearly 1.5 trillion barrels of proven oil reserves, with the likelihood that even more oil will be discovered in the future. That means there’s plenty of oil to meet the world’s demand. The problem is getting those reserves into production. That’s because, as the preceding slide suggests, new oil production will come from increasing complex resources and will require $7 trillion to $10 trillion in additional investments. The bottom line is that oil companies will need to invest heavily to find and unlock all that oil to meet the world’s future needs.

One company leading the way to provide a solution to this challenge is Chevron Corporation (NYSE:CVX). The oil company is investing heavily to grow its current production by 25% by 2017. That’s truly remarkable growth for a company of its size. It currently has 50 projects starting up between now and 2017 where it’s investing at least $250 million. Among these are major projects in the Gulf of Mexico starting up over the next few years, as well as longer-term developments in the promising Vaca Muerta shale of Argentina. Chevron really is very well positioned to help to world meet its demand for oil.

Another company with big plans to fuel the globe’s thirst for oil is Brazil’s Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR). The company’s current plan has it spending $236.7 billion through 2017. Incidentally, that’s about the current size of Chevron’s entire equity market capitalization. While only $147.5 billion of that capital will be spent on exploration and production, we’re still talking about a whole lot of money being spent in an effort to grow its oil production. If all goes according to plan, the company should be able to double its production by 2020.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!