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The Americas have a plentiful supply of oil and gas.
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PS_RalphW



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PostPosted: Tue Sep 06, 2011 10:06 am    Post subject: Reply with quote

There are plenty of oil engineers who can give a better answer than me,

but in the US and most OECD countries, 'Proven' means holes have been drilled , seismic has been done, and real oil has been found, and the oil field has a '95%' probability of having as much oil in it as claimed. It may have a lot more, but the final tests have not been done. When the oil companies need to improve their accounts, they drill the extra test holes, and prove the reserves they knew were there in the first place. This is 'reserve growth' of RGR fame, and enables RGR to claim there's heaps of oil out there. The Oil companies log the oil as 'new discoveries' in the year they do the test drill. Proven reserves have test drill data open to public scrutiny.

Peak oilers know about reserve growth, but they record the newly proven oil in the year the original field was discovered, which is how they get a hubbert peak of oil discoveries back in the 1960s yet the oil companies have almost static R/P ratios over the last 40 years. It is an accounting trick.

'Probable' reserves are given a nominal 50% probability of having as much oil as stated, and these are mostly the same oil as above , before the final test drilling is done.

'Possible' reserves are given a nominal 5% probability and are basically interesting geology / seismic data which may or may not have oil.

In OPEC 'proven' reserves are whatever OPEC says they are. The best estimate I have seen is that they are somewhere between the original oil in place , and pure fantasy.

Other countries like Russia are somewhere in the middle. Reasonable data, but different accounting, which (in my opinion) makes US style 'reserve growth' much less of a factor.
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An Inspector Calls
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PostPosted: Tue Sep 06, 2011 11:26 am    Post subject: Reply with quote

RalphW wrote:
When the oil companies need to improve their accounts, they drill the extra test holes, and prove the reserves they knew were there in the first place. This is 'reserve growth' of RGR fame, and enables RGR to claim there's heaps of oil out there.


So the R/P ratio is more of an economic/project management phenomena than it is a predictor of reserves. Proven is obviously of very narrow scope - no company is going to set out to prove the worth of some large discovery just for the sake of it, but only prove sufficient to maintain company viability. It's not an accounting trick, it's how companies (and individuals) behave.

In which case, how does anyone make an assessment of available oil reserves? I would have thought given ther experience of over a century of exploration and production, 'possible' would be higher than 5 %.

I'd like to see what RGR has to say as he's obviously one of the engineers with the expertise.
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clv101
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PostPosted: Tue Sep 06, 2011 11:34 am    Post subject: Reply with quote

Belief in 'resources into reserves' is misplaced, an artefact of the economic view which came about after believing proved reserves were a reasonable measure of the quantities of oil that can ultimately be recovered.

Roger Bentley wrote a nice article on this, see page 6:
http://www.iaee.org/documents/06spr.pdf
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An Inspector Calls
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PostPosted: Tue Sep 06, 2011 12:26 pm    Post subject: Reply with quote

The Bentley articles confirms my reasoning for the R/P ratio staying constant:
Quote:
Once again the reason is because proved reserves do not report the total oil discovered, but simply that portion judged close to production under SEC rules. On a rolling basis, as the existing reserves are produced, the companies put in the investment and infrastructure needed, and gain the permissions, to bring the next tranches of discovered oil close to market, and hence within the SEC definition. As a consequence, the U.S. R/P ratio has also stayed virtually constant over the period, at around 10 years.


clv101 wrote:
Belief in 'resources into reserves' is misplaced, an artefact of the economic view which came about after believing proved reserves were a reasonable measure of the quantities of oil that can ultimately be recovered.
I'm not sure that conclusion smacks me in the face from the article, rather that it's something of a bugger's muddle. And the fact that the source data is a mess and apparently quite unreliable.

(If we can't model this, how does anyone believe we can model climate?!)
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RGR
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PostPosted: Wed Sep 07, 2011 1:30 am    Post subject: Reply with quote

An Inspector Calls wrote:


What does PROVEN mean?


Last edited by RGR on Sun Oct 09, 2011 10:13 pm; edited 1 time in total
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RGR
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PostPosted: Wed Sep 07, 2011 2:17 am    Post subject: Reply with quote

RalphW wrote:
There are plenty of oil engineers who can give a better answer than me,


Last edited by RGR on Sun Oct 09, 2011 10:14 pm; edited 1 time in total
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RGR
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PostPosted: Wed Sep 07, 2011 2:23 am    Post subject: Reply with quote

An Inspector Calls wrote:

(If we can't model this, how does anyone believe we can model climate?!)


Last edited by RGR on Sun Oct 09, 2011 10:14 pm; edited 1 time in total
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PostPosted: Wed Sep 07, 2011 8:38 am    Post subject: Reply with quote

RGR wrote:
Can you even imagine how many more incoherent peak oil models we would have if there was plenty of grant money available for the research?


Yes, not worth considering.

But! Given the noisiness of the data, and the fact that the data accumulates as time goes on makes me wonder if any clever statistician has tried a Bayesian analysis?
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