[nero]

Harper(BP) presentation to Berlin Aspo

Here is Harper's presentation to Aspo about reserve growth. It is well worth a look. One of his key conclusions is that you can't take A&R's obseration of 10 times increase in reserves found in the US and translate it to world reported reserves. When he used IHS's database of oil discoveries instead of finding a reserves growth of about 10X as found by A&R he found a reserves growth of about 3X.

It is actually the A&R USA data that showed a decreasing reserve growth ratio. the first half of their data 77-84 has a reserves growth of about 11X while the reserves growth in the second half 85-91 was 8X.

My interpretation of Harper's 3X number works this way. a couple of years after discovery the reserved increase about 50% over what the initial conservative estimate was. After about a decade once production has begun they should have a good estimate of what the reserve really is and it can increase by perhaps another 33% in situations where more technology is applied. That gets you to about where you are after 20 years from discovery. The increase in reserves after 20 years from discovery is likely heavily influenced by reserve revisions in the large onshore fields discovered in the late 60s. Ceratinly the offshore and smaller fields that are mostly discovered nowadays should not expect their reserve growth in their third decade to match the reserve growth in their second decade. There would be some question of whether or not they will still be pumping 20 years after startup.

[ReserveGrowthRulz]

[quote="nero"]Harper(BP) presentation to Berlin Aspo

[quote]

This struck me as a quite reasonable way of measuring reserve growth in places not covered by the original R&A paper...and most of his assumptions were quite reasonable as well. Give me six months and I might venture an opinion as to how well I like his basic conclusions.

I would also venture that there are some reasonable and decent points being made in this thread as to the nature, size and explanation for reserve growth.

As far as his actual method for calculating the 3X number, it strikes me as a bit simple compared to the the work A&R put into it, as well as what Verma and Ulmishek calculated for parts of Russia. Verma did have some interesting conclusions of his own, such as how much lower reserve growth ultimately is if the onset of production is delayed and the time is spent studying the future field instead. If I recall correctly, he claimed in his paper that this "studying" prior to production was able to bring a 10X estimate of growth down to 3-4-5X, so it cut it in half approximately.

I also seem to recall the idea that a basic tenet of all of this is that conditions which existed during the creation of reserve growth shall continue into the future....an interesting problem in itself considering the original A&R work spanned the Second 70's oil shock and highest inflation adjusted oil price of its era, as well as the 86 price collapse, and the odd Middle Eastern war, without having data from the more recent century where increased prices have effected companies ability to make MORE than just the average buck by squeezing everything they find out of the ground. As to whether or not this effects reserve growth in a net negative, or net positive way, darned if I know.

[WebHubbleTelescope]

$this->bbcode_second_pass_quote('pup55', '')$this->bbcode_second_pass_quote('', 'r')eserve growth as found using A&R's methodology has been decreasing

[Taskforce_Unity]

Just found this AAPG article about 2005 discoveries, sums it up pretty well

http://www.aapg.org/explorer/2006/01jan ... s_list.cfm

http://www.searchanddiscovery.net/docum ... disc05.pdf

Somewhere between 3 and 6 billion barrels probably. No really big cats.

[Fergus]

$this->bbcode_second_pass_quote('nth', '')$this->bbcode_second_pass_quote('mekrob', 'W')hat would be the guess for why the sudden jump in discoveries in a trend of decreasing discoveries constantly? Better technology, higher prices, or more pressure (due to high prices)? Oil has jumped what? 50% in the past year but only a 25% increase in discoveries? Not great, but better than declining like usual.