A Review of Methods for Estimating Future Hydrocarbon Supply

Techniques to estimate the size of the undiscovered hydrocarbon resource base and produce discovery rate forecasts are reviewed and assessed. Accurate assessments of the resource base are needed by exploration firms and the government in comparing the potential of competing areas of exploration and by policy makers in developing appropriate policies to address possible hydrocarbon shortages. The techniques reviewed include judgemental prediction, extrapolative methods, discovery process models, econometric models, and probabilistic models. A critical distinction exists between econometric and geologically-based approaches. The geological approaches aim at explicitly determining the size of the undiscovered resource base and its frequency-size distribution, producing discovery rate forecasts as a by-product of the adopted methodology. The econometric approaches aim explicitly at forecasting future discovery rates, producing estimates of the resource base as byproduct.