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Sunday, January 22, 2006

Half of Kuwait's Oil Reserves "Vanish" Overnight

Reuters reported on Friday* that Kuwait's oil reserves are actually half what was officially stated, according to internal Kuwaiti records reportedly seen by industry newsletter Petroleum Intelligence Weekly (PIW).

"PIW learns from sources that Kuwait's actual oil reserves, which are officially stated at around 99 billion barrels, or close to 10 percent of the global total, are a good deal lower, according to internal Kuwaiti records," the weekly PIW reported on Friday.

PIW reported that according to data circulated in Kuwait Oil Co (KOC), the upstream arm of state Kuwait Petroleum Corp, Kuwait's remaining proven and non-proven oil reserves are only about 48 billion barrels.

The Reuters article goes on:

PIW said the official public Kuwaiti figures do not distinguish between proven, probable and possible reserves.

But it said the data it had seen show that of the current remaining 48 billion barrels of proven and non-proven reserves, only about 24 billion barrels are so far fully proven -- 15 billion in its biggest oilfield Burgan.

Kuwait has been adding up to 500 million barrels a year at Burgan which means the remaining non-proven reserves of some 5.3 billion barrels will likely be upgraded to proven, according to PIW.

Three consortia led by BP, Chevron and ExxonMobil are in the race for Project Kuwait, a 20-year operating service contract to raise crude capacity at four oilfields in the north of Kuwait.

So, just like that, world proven and unproven oil reserves drop by 5%. Many believe that Saudi Arabia and other OPEC nations have also been misleading (to put it gently) with their reserve figures as OPEC production quotas are based on the size of a nation's reserves.

If Kuwiat's reserves are only half of what they have been saying, and the same is more or less true for other OPEC nations, especially Saudi Arabia (who has the largest reserves in the world), then we are headed towards Peak Oil a lot faster than many have thought.

OPEC nations have traditionally been very secrative about their reserves and do not allow anyone outside the national oil company to verify records. How exactly PIW came across this information is not revealed but it presumably wasn't just given to them.

If the world is to accurately plan for Peak Oil, it has to know with some accuracy what kinds of reserves are truly out there and this continued obfuscation by Saudi Arabia, Kuwait and others is very counterproduction to everyone except those countries. I'm glad this news has leaked and I hope similar news will come out of other secretive oil producers as well.

By the way, this also comes only a couple months after news that Kuwait's largest oil field, Burgan field, has peaked and its production is beginning to decline.

*[i.e. 'dump day' or the day agencies release news they want to be buried since noone reads the papers on Saturday]

[A hat tip to Treehugger]


Anonymous said...

Unluckily for them, us net-newsies often forget what day of the week it is.

Jesse Jenkins said...

Yup, there's no typical news cycle for us bloggers...

In fact, many of us probably don't get around to scanning the sites or the RSS feeds until the weekend.