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158 comments on DrumBeat: August 18, 2006

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Darwinian on August 18, 2006 - 8:20am Permalink | Subthread | Comments top
After one month, deafening silence concerning Kuwait's oil reserves.

In a statement published on the Kuwait Oil Ministry's Web site, Sheikh Ali said he had "undertaken to clarify the truth and volume of Kuwaiti oil reserves" for lawmakers and ministers over the next few days. Kuwait publicly boasts 100 billion barrels of oil reserves but a report some months ago by Petroleum Intelligence Weekly said internal Kuwaiti records suggested the volume was only 48 billion barrels.
http://www.easybourse.com/Website/dynamic/News.php?NewsID=25440&lang=fra&NewsRubrique=2

In a news release on July 18th, Kuwait's Oil Minister promised to clarify Kuwait's oil reserves within days. Well, days have turned into weeks, and now it has been one full month since that statement was released. What has caused this delay? I really do not know but I suspect it is because the news is not good and the release of that data might have serious consequences.

After all, if Kuwait really had 100 billion barrels of reserves, there would be no delay, only jubilation in the announcement. In several earlier releases, the newly elected opposition party, announced that, in order to preserve the oil for future generations, oil production should be limited to 1% of reserves.  Well, current yearly production from Kuwait is, today, just under 1% of 100 billion barrels at .922 billion barrels per year. But if it were determined that Kuwait has only 50 billion barrels, then to stay at 1% per year of reserves, production would have to be cut by about 1.16 million barrels per day, almost in half. That would be devastating, if not to Kuwait's economy, it would be to the political future of the opposition party. It would mean that all the free dole and other goodies, handed out to the public, would be cut at least in half. Say goodbye to any politician that tried that trick.

But the controversy still rages. The latest news, just out today, can be found here:
http://www.kuwaittimes.net/localnews.asp?dismode=article&artid=125678638

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griztown on August 18, 2006 - 8:40am Permalink | Subthread | Parent | Comments top
I'm not so sure it would be devistating.  If Kuwait cut their oil reserves in half and then their production, I think you could see the price of oil double or at least come close.  Then they'd be right back to where they were before.
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JoulesBurn on August 18, 2006 - 8:49am Permalink | Subthread | Parent | Comments top
But perhaps they believe like everybody else that SA and others can pick up the slack, thus keeping prices down.
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westexas on August 18, 2006 - 8:41am Permalink | Subthread | Parent | Comments top
If Kuwait had 100 Gb left, their remaining reserves would be roughly equal to what the Saudis have produced so far, but look at the difference in the current production rates between the two countries, 9.2 mbpd for SA and 2.5 mbpd for Kuwait (last EIA crude + condensate numbers).

Also, the lower number for Kuwait is supported by Stuart's HL analysis.

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oilaholic on August 18, 2006 - 10:15am Permalink | Subthread | Parent | Comments top
Darwinian says Kuwait produces just under 1mbpd, you say 2.5m.  Which is it?  Makes all the difference to Darwinian's point.
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oilaholic on August 18, 2006 - 10:18am Permalink | Subthread | Parent | Comments top
OOOPS..never mind.   My bad.  Mistook Darwinian's barrels/year for bpd. Sorry.
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Charles Mackay on August 18, 2006 - 2:07pm Permalink | Subthread | Parent | Comments top
Even members of Kuwait's parliament complain that they do not know the true level of the country's reserves.  Yet still no word from the energy minister.

AME Info - Energy Oil and Gas
August 13, 2006

Kuwait's reserves queried again

Kuwait's parliament has again called for the government to reveal how much oil the country has in its reserves, reported the Kuwait Times. Speculation has continued for months that the country has 48bn barrels of oil in reserve, about half of the official figure of 99bn. Kuwait's new Energy Minister, Sheikh Ali Al Jarrah Al Sabah, who was appointed in July, has said that he will clarify the situation shortly.

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