Oil and gas production in some regions may have peaked, but global natural gas reserves are estimated to be 13% higher than estimated in 2002, and oil reserves are about 10% higher, according to BP plc’s Statistical Review of World Energy 2004, unveiled on Tuesday.

However, for the second year running, North America was the only region to see a decline in natural gas production, as lower Canadian output was only partially offset by small gains domestically and in Mexico.

The review, which has been produced annually for the past 53 years by the London-based major, includes energy data up to 2003. Global gas reserves were estimated by BP at 6,215 Tcf; total oil reserves were estimated at 1.15 trillion bbl. This years review incorporated data from primary sources and a wider range of secondary sources to derive more accurate and timely reserve figures.

“Despite those who say we are about to run out of oil and gas, the figures in the review confirm there is no shortage of reserves,” said Peter Davies, BP’s chief economist. “Production in some provinces may have peaked, but this is no reason for current high prices.”

Even with North America’s gas production decline, the world’s natural gas reserves have been rising consistently, according to the report. “Gas reserves have more than doubled since 1980 as a result of exploration, new technology and the unstranding of gas reserves through liquefied natural gas (LNG) and other technologies.”

According to BP, global gas production rose 3.4% in 2003, led by Russia and Norway, where production jumped 12%. However, natural gas consumption worldwide grew by a relatively weak 2% as demand in the world’s largest market, the United States, contracted by 5%. Outside of the United States, demand growth averaged over 4%, and worldwide sales of LNG grew particularly fast in 2003, rising by more than 12%.

U.S. LNG imports more than doubled on the back of new supplies from Trinidad and Tobago and as high gas prices drew in spot cargoes. Sales to the world’s largest LNG markets, Japan and South Korea, rose by more than 9%.

Global oil reserves, said BP, “have increased almost continuously over the past 30 years, and world reserves now represent 41 years of production at current rates.” In 1980, reserves equivalent to 29 years of production were known. “The world has now produced some 80% of the oil reserves that were known in 1980, yet exploration success and application of technology has led to current reserves that are 70% higher.”

The rising oil prices are “largely the result of strong oil consumption growth and the need to maintain inventory levels,” according to BP. Oil prices in 2003 were the highest for 20 years, with Brent dated crude averaging $28.83, despite world oil production rising by 3.8%, higher than the 2.1% increase in demand. China and Russia’s rising energy consumption had a “particular” influence on global energy markets last year, BP noted.

World coal consumption rose 6.9% last year, according to the report, dominated by “surging demand in China, up over 15%, but other regions also saw strong demand, with North American coal use climbing to a record high.”

Consumption fell 2% globally within the nuclear power generation sector, led by a 27% decline in the world’s third largest nuclear generator, Japan, where safety concerns shut in 17 of the country’s 54 nuclear plants. Only two new nuclear reactors were brought on line in 2003, the lowest number for 35 years. However, hydroelectric power generation increased by 0.4% “as Latin American and Asia Pacific gains were offset by falls in Europe and North America.”

“The data illustrates the continued growth in reserve volumes across the world,” said Lord John Browne, BP’s Group CEO. “At current levels of consumption. there are sufficient reserves to meet oil demand for some 40 years and to meet natural gas demand for well over 60 years.”

Browne noted that “reserves, globally, have grown over time, and it is clear that the issue of energy security, which has been so prominent over the last year, is driven not by a physical shortage of supply but by the challenges of ensuring, in a world where demand and supply are not co-located, that there will be sufficient traded oil and gas to meet rising demand.”

Even though oil “remains a vital fuel, with few viable substitutes in the transport sector in particular, the energy mix is being balanced by continued growth in demand for natural gas,” said Browne. “Technical advances have encouraged gas consumption, as has the desire to move to fuels that emit less carbon. The review records last years double-digit growth in LNG trade [as] one indicator of the fact that gas is now traded internationally as well as regionally.”

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