----- Original Message ----- From: "Dan M." <[EMAIL PROTECTED]> To: "Killer Bs Discussion" <[EMAIL PROTECTED]> Sent: Wednesday, February 04, 2004 10:24 PM Subject: Re: Oil reserves revision: another one!
> > ----- Original Message ----- From: "Erik Reuter" <[EMAIL PROTECTED]> To: "Killer Bs Discussion" <[EMAIL PROTECTED]> Sent: Tuesday, February 03, 2004 12:10 PM Subject: Oil reserves revision: another one! > Dan, > > I'm curious if you have any thoughts on the oil reserves revisions that > have recently occurred. First Shell, and now El Paso, both lowering > reserve estimates significantly. > > Is oil getting harder to find or extract? Well, it always gets harder to extract and find, but we continuously get better at both. Over the last 20 years, the cost to find and extract oil has fallen, so our the improvement in our abilities to find and extract have been outpacing the added difficulties. >Were the engineers too optimistic in their estimates? Very possibly. There is an obvious bias towards optimism. Also, techniques may have been refined, resulting in recalculations. One thing worth noting; proven reserves have only been a 30 year supply for over 25 years now. We keep on finding more oil, but it comes from unproven instead of proven reserves. >Or was management misinterpreting or misreporting the data they were >getting fed? Its actually their job to guard against too much optimism; they may not have done it well enough or techniques of estimation may have just improved. Calculating the reserve in a field has not been exact from the start. As fields develop, the calculation of the remaining reserve improves. Finally, reserves are tied to costs. There may be 1 billion barrels of oil extractable at $20/barrel and another half billion that would take another $5/barrel to extract. Dan M. > _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
