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Saudi Oil Exec: Crude Reserves Figures Bunk
MoneyNews.com ^ | May 29, 2008 | MoneyNews

Posted on 06/05/2008 11:11:38 AM PDT by Tolerance Sucks Rocks

Junk your SUV and buy an electric scooter. Recent claims by various OPEC leaders that the world has plenty of oil left are bunk, alleges Sadad Al-Husseini, a former top executive at Saudi Aramco, Saudi Arabia’s state-owned oil company.

Oil-producing countries are inflating the size of their oil reserves by as much as 300 billion barrels by padding supposedly proven reserves with “probable” reserves and tar and oil sands, according to Husseini.

Such hypothetical reserves are “not delineated, not accessible and not available for production,” Husseini said at a recent energy conference in London.

Oil production has now reached its peak and will begin dropping in 15 years or less, earlier than most other experts predict.

In an article for Petroleum Intelligence Weekly, Husseini took issue with the publication’s survey on oil reserves, criticizing common methods for estimating oil reserves.

Oil companies mix proven finds with probable reserves that may have only a 50 percent chance of getting out of the ground, he wrote. They also count “unconventional hydrocarbons, inaccessible oil accumulations and unconfirmed recoveries, none of which fit the current definitions of proven or probable reserves.”

Take the 140 billion barrels of Canadian bitumen that’s regularly reported as proven oil reserves. In reality, Husseini alleged, only a small fraction of that will be converted to useful fuels.

Siberian hydrocarbons, reported as reserves, call for massive investments to extract and refine, and cannot be considered reserves.

Counting probable reserves and tar and oil sands is controversial, admitted Petroleum Intelligence Weekly. The problem is that definitions vary.

Plus, oil companies and governments are often secretive, claiming information about their oil is a security issue.

Oil producers, according to Husseini, are also overly optimistic about new extraction techniques. They presume they’ll work well everywhere, instead of analyzing their usefulness field by field.

Adding to the confusion, the U.S. Geological Survey and others have mixed up reserves with resources, combining proven and probable fields with speculative, undiscovered hydrocarbons.

That, he said, has prompted speculation that global oil reserves may be over twice current estimates.

While Husseini is an oil-production pessimist, others are coming around to his view.

Prompted by uncertainty about world oil supplies, the International Energy Agency is studying depletion rates at about 400 oil fields in its first-ever study of world oil supply.

"The prices are very high, and demand did not respond in the last few years as much as one would have expected," said IEA Chief Economist Fatih Birol. "The growth in terms of production was not great. We did not see enough investment."

The study, due out in November, will predict supplies through 2030. The fear is that demand will outstrip supply, sending prices through the roof.

Oil companies and governments have been cooperative with the IEA, but analysts were skeptical that the agency would get a complete picture from often-secretive oil producing nations.

The Paris-based IEA is seen as the world's most reliable independent source of oil information, and its new forecasts are likely to further upset markets.

© 2008 Newsmax. All rights reserved.


TOPICS: Business/Economy; Foreign Affairs; News/Current Events
KEYWORDS: bitumen; depletion; energy; extraction; hydrocarbons; iea; oil; oilcompanies; oilfields; oilreserves; oilsands; oilsupplies; peakoil; reserves; sadadalhusseini; tarsands
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To: Tolerance Sucks Rocks

“Gee, developing nuclear weapons is expensive. We’d better find a way to get even more money out of the infidels!”


21 posted on 06/05/2008 12:15:36 PM PDT by Master Shake (Who would have guessed that voting C'thulhu in 2008 would be the lesser evil?)
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To: Brilliant
Why would they want us to think they have more oil than they do? You’d think it’d be the reverse.

Absolutely. That way they get the big bucks now, and later when the reserves actually decline.

22 posted on 06/05/2008 1:08:29 PM PDT by b4its2late (Ignorance allows liberalism to prosper.)
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To: b4its2late

NYMEX crude 133 +11 since yesterday.

What is doing this? Global Warming?


23 posted on 06/06/2008 7:38:13 AM PDT by RightWhale (We see the polygons)
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To: RightWhale

+11 ??? I thought it closed at $127.79 yesterday.

http://www.chron.com/disp/story.mpl/business/5822312.html

Prices jumped $6.43 today shortly after Ole Slorer of Morgan Stanley released a report saying he expected a “short-term spike in oil prices,” on the back of rising demand in Asia, Dow Jones Newswires reported.


24 posted on 06/06/2008 7:50:43 AM PDT by thackney (life is fragile, handle with prayer)
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To: thackney

That is two days together. The bubble poppage seems to have been deferred.


25 posted on 06/06/2008 7:56:49 AM PDT by RightWhale (We see the polygons)
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To: RightWhale

My mistake, +11 it is.

I forget with the Alaskan Time Change you get to see into the future.


26 posted on 06/06/2008 12:04:48 PM PDT by thackney (life is fragile, handle with prayer)
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To: thackney

Not like Japan though. It really is tomorrow there.


27 posted on 06/06/2008 12:06:26 PM PDT by RightWhale (We see the polygons)
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To: Brilliant

Why would they want us to think they have more oil than they do? You’d think it’d be the reverse.

Because, if you're the #1 oil producer in the world, you don't want your clients to know you're running out of oil. That would convince people (if they're smart) to either drill in their own borders or start up nuclear power plants, and there goes a big chunk of the Saudis' moo-lah.
28 posted on 06/07/2008 8:15:42 AM PDT by G8 Diplomat
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To: Tolerance Sucks Rocks

Junk your SUV and buy an electric scooter

If people wouldn't buy multiple SUVs and Hummers per family, give their 16-year-olds new SUVs for their birthdays, drive to places they could walk to, and refuse to carpool, our demand wouldn't be so high. We'd probably still be the #1 consumer of course, but we're making the problem worse with our excess consumption. Also if the driving age was raised to 18, every 16-year-old that's currently driving would not be, and thus less gas is needed.
29 posted on 06/07/2008 8:20:17 AM PDT by G8 Diplomat
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To: G8 Diplomat

How about this idea. Nobody can get a drivers license unless they can prove that they can back a tractor trailer into a loading dock. This was proposed by an uncle of mine. You would probably have a lot less cars on the road. On the other hand, numerous taxi services, mass transit systems, and bike paths would sprout up, in addition to those already present.


30 posted on 06/07/2008 2:51:44 PM PDT by Tolerance Sucks Rocks (To the liberal, there's no sacrifice too big for somebody else to make. --FReeper popdonnelly)
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