Big oil, SEC differ on calculation of petroleum reserves

Big oil threw down the gauntlet in a battle with U.S. regulators over how to calculate a crucial measure of the industry’s long-term health: how much oil and natural gas it has in the ground.

A report released Wednesday by an industry consultant — and bankrolled with help from most of the world’s major oil companies _ criticizes the method the Securities and Exchange Commission uses to assess oil and gas reserves as outdated and pessimistic, saying it misleads investors because it underestimates the success the industry is having finding new stores of fossil fuel. Indeed, the difference between the SEC’s method of tallying reserves and the calculation favored by the industry can amount to the equivalent of hundreds of millions of barrels of oil at one company alone

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