Oil makes the world go ’round, and finding more oil is one of the principal goals of multinational energy giants such as Exxon Mobil (XOM), British Petroleum (BP) and Chevron (CVX). Unfortunately, it has become harder and harder to find fields that really move the needle for corporate or national reserve totals. Nevertheless, just because it is difficult does not mean it’s impossible. Investors can look back to some notable successes in the history of the oil industry for examples [for more crude oil news and analysis subscribe to our free newsletter].
A quick note is in order before diving into the list of the all-time largest fields. First, there is an enormous difference between a field or reservoir’s total reserves in place and the percentage of those reserves that is extractable (as technologies and techniques improve, that percentage has increased). Second, although there is room for legitimate difference of opinion when it comes to estimating an oil field, some countries flat-out lie (OPEC determines quotas, at least in part, by proven reserves). Consequently, this information has to be taken with a grain of salt.
The Kashagan field, discovered in 2000, could be a significant oil reservoir for Kazakhstan, as it is believed to hold 38 billion barrels of oil. To put that into context, the much-celebrated Prudhoe Bay field in Alaska held approximately 13 billion barrels.
Unfortunately, Kashagan will be a challenging field to exploit for two reasons. First, it’s located in an environmentally sensitive area (the northern part of the Caspian Sea), and also one that freezes over every year. Secondly, the reservoir, whose pressure is high, contains corrosive fluids. Consequently, it may be difficult to extract more than 20% of the available reserves. Nevertheless, numerous major oil companies, including Eni (E), Royal Dutch Shell (RDS.A), Total (TOT), Exxon (XOM), and Conoco (COP) are involved, and it’s already targeted as the primary supply source for an oil pipeline to China [see also Crude Oil Guide: Brent Vs. WTI, What’s The Difference?].
Analyzing the Ferdows oil field reveals some of the challenges in rating or discussing oil fields. While the size of the Ferdows field alone would drop it out of the top five, it is almost always discussed in combination with Mound and Zagheh, together representing reserves of 31 billion barrels of oil (and substantial natural gas as well). Discovered in 2003, this field is about 50 miles offshore, but Iran has been slow in developing the field due to the difficulties created by sanctions against the Iranian government.
As in the case of the Ferdows field, it is difficult to draw sharp distinctions between the Brazilian offshore fields. Some sources refer to the entire Santos/Campos formation as an oil field, containing approximately 123 billion barrels of oil, while others recognize individual fields like Carioca-Sugar Loaf, which contains approximately 33 billion barrels of oil. To a certain extent, this is quibbling over details as these are substantial oil assets either way.
Companies like Petrobras (PBR) are going to have their work cut out for them in exploiting this field. Petrobras has already earmarked over $200 billion in development spending, and producers will have to deal with water depths of 5,000 feet or more, seabed of 25,000 feet or more, and salt dome formations to get to the oil. This makes it one of the largest, recent (2007) discoveries, but also one of the most challenging.
Burgan is a lesson in what can go wrong with lucrative and promising fields. Discovered in 1938, the Burgan field held approximately 150 billion barrels of oil at the time of discovery. A combination of bad management in the form of overly aggressive, if not greedy, Kuwaiti officials, and bad luck in the form of the Iraqi army torching the fields on their way out in 1991, has severely impacted production. Burgan may effectively be a dead field by 2020 [see also Can Oil Fix U.S. Unemployment?].
Ghawar, Saudi Arabia
Ghawar is the big daddy of oil; the field everybody refers to when talking about massive oil discoveries and the ability of such a discovery to fundamentally alter the course of a nation. Saudi Arabia was a sparsely populated country that barely attracted any global attention before a water-discovering expedition in 1948 discovered oil instead.
Ghawar’s size has been estimated at 162 billion barrels of oil, though there has been no independent verification since 1975. Anecdotal comments have mentioned production declines and increasing issues with contaminants, not to mention the need to pump in millions of barrels of seawater everyday to maintain production. Nevertheless, Ghawar is still the signature oil discovery by which almost all others are measured.
Other Fields to Note
Readers will likely not be surprised that there have been many other significant fields discovered over the years, including Mexico’s fast-fading Cantarell field (35 billion barrels) and Venezuela’s Bolivar Coastal Field (44 billion barrels). But there are also some huge discoveries that may well shape the oil markets in decades to come [see also The Definitive Guide to Fracking].
Canada’s Athabasca tar sands could contain 170 billion barrels worth of economically worthwhile oil, while the Orinoco Belt in Venezuela (a mix of heavy oil, oil shale and tar sands) could contain from 513 billion to 1.3 trillion barrels’ worth of oil.
Last but not least are the Piceance and Uinta Basins in Utah. These formations were discovered in 1912 and don’t hold oil, but rather kerogen-containing rock, which will become oil over the course of millions of years. When heated, kerogen can produce hydrocarbons (including oil), and there are long-standing Native American records and stories of the “flaming rocks” of the area. While the economics of the fields are a subject of debate, they could each possibly contain over 1.25 trillion barrels of oil equivalent each, and close to 3 trillion barrels in combination.
Disclosure: No positions at time of writing.