Forecasts for each of the world's 100 significant producing nations, now in the final stages of completion, indicate that worldwide output of both crude oil and natural gas will rise appreciably over the period 1996-2005. Both onshore and offshore sectors are evaluated using full-cycle resource analysis and supply/demand balances plus a wide variety of geological, economic, political, and other criteria. Oil and gas are separately assessed according to their distinctive market and supply conditions. Estimated import and export levels for each producing country indicate future global trade patterns.

World oil production, which has been recovering since 1984, will move to new record heights by 2005. These gains will be led by the Middle East, whose incremental production costs still lie far below most other regions'. Africa and Latin America will likewise surge to new record outputs, and Eastern Europe will recover strongly to finish third among the world's regions. However, the principal consuming regions- North America, Western Europe, and the Far East/Australia-will all end the period in serious, almost certainly permanent decline. The world is thus facing a profound and far-reaching shift in the supply patterns of petroleum, one which will deprive many major consuming nations of control over much of their oil.

Global gas production, which, likewise, is forecast to reach record levels by 2005, will exhibit a more evenly distributed growth pattern. Though Eastern Europe, whose vast reserves dwarf other regions', will lead the pack, every region will share strongly in the growth, and no region will end the period in long-term decline. Propelled largely by environmental advantages, gas usage will exceed oil's overall annual average growth and gain market share at the expense of both oil and coal. As with oil, however, each of the three dominant market zones for gas-North America, Europe, and the Far East/Australia-will become more dependent upon foreign supplies; for demand will outstrip deliverability additions within those regions.

Several areas will benefit from the world's seemingly endless thirst for more hydrocarbons. Among the emerging hot spots for E&P activity in the next few years are the following: the Caspian Sea, Timan-Pechora and West Siberian Basins of Russia, deepwater parts of the South Atlantic rift-drift basins and Gulf of Mexico, North Atlantic areas adjacent to and within the North Sea, West Africa's Niger Delta Basin, Tarim and Junggar Basins of China, offshore Sakhalin, southern part of the South China Sea, Northwest Shelf and Timor Gap areas off Australia, and Ghadames Basin of Algeria. When international sanctions end, Libya, Iran, and Iraq will also see major rejuvenation of activity.

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