BP (BP -0.95%) has provided an intriguing update to its global oil reserves estimate in the company's latest yearly review of energy statistics. BP raised its reserve estimate by 1.1% to 1,687.9 billion barrels, which is enough oil to last the world 53.3 years at the current production rates. However, there's likely a lot more oil left in the tank beyond what BP sees today.
America's energy boom surges
A good portion of the growth in global oil reserves in BP's report comes from the United States. According to BP, the U.S. has 44.2 billion barrels of oil reserves, which is 26% higher than it previously thought. It's also quite a bit more optimistic than the U.S. Energy Information Administration, which recently increased its estimate to 33.4 billion barrels of reserves, or 15% more than previously thought.
The overall cause for that surge in oil reserves is that America's shale oil plays -- the Bakken, Eagle Ford and Permian Basin -- are now being unlocked through horizontal drilling technology.
Despite the big boost in reserves over the past year, there appears to be much more oil potential in each shale play, with the Permian Basin really standing out.
As that slide points out, Pioneer Natural Resources (PXD -1.08%) now estimates the Spraberry/Wolfcamp shale formations in the Permian Basin contain 75 billion barrels of recoverable oil and gas. That number is actually a major upward revision from last year when Pioneer estimated the two formations held 50 billion barrels of recoverable oil and gas.
These Permian Basin plays now make the Eagle Ford and Bakken shales look small in comparison. Yet the recoverable reserve estimates of both of those shale plays also continue to grow. In the four years since EOG Resources (EOG 0.09%) began developing the Eagle Ford shale it has drastically revised its reserve estimates. The company now believes it will recover 3.2 billion barrels of oil equivalent on its land position, which is up from less than 1 billion barrels in 2010. New technologies and techniques, including closer spacing of wells, are providing a big boost to future reserve estimates.
Next up for America
As those three plays do all the current heavy lifting to grow reserves, new oil plays continue to emerge. The two most promising appear to be the Tuscaloosa Marine shale in the Gulf Coast region and several shale plays in the Rockies. EOG Resources this year unveiled four new horizontal oil discoveries in the Rockies, proving yet again that America's energy boom is just getting started.
EOG Resources estimates that it will ultimately recover about 400 million barrels of oil equivalent as it develops its acreage in the Rockies. However, keeping in mind the company's nearly fourfold boost to its estimated recovery figure in the Eagle Ford shale, it's likely there is a lot more upside in the Rockies as EOG Resources and others develop the oil rich shales in the region.
While the world as BP sees it might just hold 53.3 years' worth of oil, that certainly does not mean we'll run out of oil anytime soon. New shale plays continue to be discovered in the U.S., which should fuel substantial gains in reserves over the next decade. There's plenty of oil still left in the world's tank thanks to the development of America's shale resources.