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96 comments on 2005 Exploration Round-Up

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Khebab on March 1, 2006 - 11:07am

What about reserve growth?
The USGS was predicting a least 300Gb in reserve growth.

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Agric on March 1, 2006 - 1:34pm

There was a mild disagreement a few weeks back here at TOD about such terminology: apparently the use of "USGS" in conjunction with "forecasts" or "predictions" might be incorrect and misinterpretation ;)

I'm sure that reserve "revisions" will easily fill the shortfall in discoveries, on paper at least, for a couple more years anyhow. After all, there are still perhaps 1,000 Gb, maybe more, of reserves still in the ground, it would only take an annual 2.5% upwards "revision" to solve the discovery shortfall. Of course, revisions can cut both ways - might be troubling when we come to the days of downwards revisions. But I don't expect those days to arrive before peak oil is recognised, in fact I suggest that may be a sign of admission that peak oil has arrived.

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Bubba on March 1, 2006 - 1:50pm

You will be seeing some downward revisions in some companies reserves coming out that have nothing to do with how much oil is in the ground. They have to do with the structure of the production-sharing contracts that they have with foreign governments. As the price of oil goes up, these companies pay off their investments earlier and their share of both "cost oil" and "profit oil" goes down. The companies make more money overall, but their "reserve base" has to be re-adjusted downward to reflect the higher value for the oil.

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Bubba on March 1, 2006 - 1:59pm

You have got to stop believing the USGS. Their reserve assessments and future predictions are divorced from the reality of what the industry is actually finding with the drill bit.

Think of the USGS, for the most part, as academics. They are good scientists, but you would never hire them to help you find oil that you really wanted to produce and sell.

Morover, there may be 100 geoscientists working in industry with far bigger budgets and far better data compared to each geoscientist working for the USGS.

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