Oil Reserves in trouble?

From: Glenn Morton <glennmorton@entouch.net>
Date: Sat Aug 27 2005 - 00:26:36 EDT

Given my discussion with Janice, I took another look at the BP Statistical
Review of World Energy. This is a very reliable industry source for what is
going on in energy. I saw something remarkable about the reserves over the
past couple of years. They didn't increase very much between 2003 and 2004.
Here is the data
                 reserves
                 Thousand
 Year million bbl difference price of oil
1994 1017.5 15.82
1995 1026.8 9.3 17.02
1996 1048.8 22.0 20.67
1997 1058.4 9.6 19.09
1998 1069.5 11.1 12.72
1999 1088.4 18.8 17.97
2000 1115.8 27.5 28.50
2001 1139.7 23.8 24.44
2002 1176.9 37.2 25.02
2003 1188.3 11.5 28.83
2004 1188.6 0.2 38.27

What one finds is thateven in years in which the price was low, the reserves
went up a lot. But now that the price is high, the industry is apparently
having trouble finding oil. This is truly an ominous sign in my book. I
suspect next year will go up a bit, but I haven't heard of any really big
discoveries this year.

There is one possible out to this issue. It might have to do with the reform
in the industry over reserves. Some companies, like Shell were over
reporting their reserves--but, if that is the out, it isn't a good out.
Received on Sat Aug 27 00:29:04 2005

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