Why are remaining oil & gas reserves from political/financial sources and technical sources so different?

Category Petroleum Geology
Group GSI.IR
Location International Geological Congress,oslo 2008
Author Laherrere, Jean
Holding Date 04 October 2008

Published oil remaining reserves (USDOE) are mainly in OPEC countries and have been rising for the last 50 years, where as confidential technical mean field data have been declining since 1980. There is no consensus on reserve definition and the conventional SEC 1978 rules for financial data are inappropriate for estimating the remaining sub-surface reserves. Russian classification of reserves relies on the maximum theoretical recovery, when proved reserves are assumed to rely on the minimum. The competition between OPEC members on quotas based on reserves leads to a status quo or only increased reserves, which often fails to take into account reserves deletion from production. In fact, the 300 Gb OPEC increase during the 80s is now described by S.al-Husseini, former VP Aramco, as speculative resources. Technical operator reserves are confidential (except in the UK, Norway and US federal), but can be obtained from scout companies. Global compilation of heterogeneous reserves data requires correction to obtain mean values which are assumed by definition to not grow statistically. If they grow, it means that evaluator’s approach is incorrect. Reserve growth occur mainly on proved values because the omission of probable reserves and incorrect aggregation. Correction needs to check the operator estimate by extrapolating the decline of major mature fields. Unfortunately available databases are incomplete for field annual production, cumulative production. There are large discrepancies on oil and gas ultimate recovery. Many studies rely only on past production, using Hubbert linearization. The best approach is to extrapolate creaming curves (cumulative backdated mean discoveries versus cumulative number of new field wildcats (NFW), but few have access to those data. The yet-to-find, obtained from subtracting the cumulative known discoveries from the estimated ultimate, is usually below the inaccuracy of these discoveries. Discrepancy of reserves estimates are only found when fields are almost depleted, in particular after a large increase in decline for the last few years (East Texas, Brent). Instead of one value, reserve estimate should be reported as minimum, mean value and maximum. Forecasting future production is relatively easy for the conventional oil and gas fields, but more difficult for unconventional fields which depends more on the size of the tap rather than the size of the tank. Even if ultimate geological reserve estimates allowed us to forecast a smooth production peak, constraints from demand, investment, political factors will likely transform the "peak" into a bumpy plateau. Most major oil and gas fields are on decline. Estimates for these fields from annual production data is often straightforward, but unfortunately not available in all countries. Norway and the UK provide such field data, a policy that should be followed in all countries. Such changes are required if we are to effectively manage our vital energy reserves.