[Twilight]

If that data was showing "reserve growth" without backdating additions to original discovery dates, that would explain why KTH's claim of what it shows sounds so outlandish. Every year the world consumes more oil than it discovers, and this has been the case for coming up to 30 years. Reserve growth from reappraisals of economic recovery, inclusion of new categories of difficult oil and spurious reporting do not change the discovery trend. What it does is say we used 30bn barrels of mostly great stuff and replaced it with tar and unverifiable paper barrels that - yes - appear to be as made up as anything on the internet as Kuwait's reversal of past revisions demonstrates.

Note that this is only discussion of KTH's interpretation, not the data itself as it has not been presented here. It is impossible to say which of those sources of error are the case here. But these are the old tricks that appear again and again when reserve replacement appears too good to be true.

By the way, the EIA, like the IEA, BP Statistical Review, the journals and others, do not rely exclusively on data they gather themselves. Most of the reported reserves are on the books of NOCs which report whatever they like, and their numbers (in some cases unchanging for 20 years) are reproduced without comment. There are no independent audits of the claims of some of the most important producers in the world. We only have their word, so "buyer beware" when reading even the most reputable statistical publications.

[KillTheHumans]

$this->bbcode_second_pass_quote('TheDude', '
')21 Reality & Illusion
This shows the effect of proper backdating. The discovery trend shown in yellow is falling not rising.

[KillTheHumans]

$this->bbcode_second_pass_quote('Geomancer', '')$this->bbcode_second_pass_quote('KillTheHumans', '
')
You sir, are going to have some FUN around here!

[KillTheHumans]

$this->bbcode_second_pass_quote('Twilight', ' ')Every year the world consumes more oil than it discovers, and this has been the case for coming up to 30 years. Reserve growth from reappraisals of economic recovery, inclusion of new categories of difficult oil and spurious reporting do not change the discovery trend.

[TWilliam]

$this->bbcode_second_pass_quote('Geomancer', 'W')e have unlimited supply of organic materials suitable as feed material including, but not restricted to garbage, scrap tires, poisonous warfare agents, etc.
Building pyrolysis reactors is cheaper and faster than going for oil in its more difficult formations.

[Geomancer]

$this->bbcode_second_pass_quote('TWilliam', '')$this->bbcode_second_pass_quote('Geomancer', 'W')e have unlimited supply of organic materials suitable as feed material including, but not restricted to garbage, scrap tires, poisonous warfare agents, etc.
Building pyrolysis reactors is cheaper and faster than going for oil in its more difficult formations.

[TWilliam]

$this->bbcode_second_pass_quote('Geomancer', 'I') believe the world has three unlimited supplies: Taxes, garbage and ignorance .javascript:emoticon(':-D')

[Geomancer]

$this->bbcode_second_pass_quote('TWilliam', '')$this->bbcode_second_pass_quote('Geomancer', 'I') believe the world has three unlimited supplies: Taxes, garbage and ignorance .javascript:emoticon(':-D')

[TWilliam]

$this->bbcode_second_pass_quote('Geomancer', 'Q')uite seriously you should take a step back and consider that decaying plants and animals, as well as living organisms are organic matter and are not related to any oil produced.

[Specop_007]

$this->bbcode_second_pass_quote('JustaGirl', 'G')eesh, some of you are so rude to 'newbies'(not just this one). I thought the point of this site was to educate people, not scare them away before you even get the chance.

[ROCKMAN]

Geomancer,

Please don't let some of the reviews of your thoughts turn you off to this site as well as others. You are trying to understand a very complex system. I've been a petroleum geologist for over 30 years and I have disagreements with my cohorts over such technical issues almost daily.

I'll offer one bit of advice regarding the supply issue: it's very easy to confuse reserves in the ground with production rates. For example, I know a bit about Petrobras' offshore projects. They may well eventually discover more oil than has been produced from the North Sea or many other very large plays. But reserves in the ground don't readily equate to production rates. I suspect you have some idea of the time lag for a deep water discovery to start producing (5 to 10 years is not uncommon). But regardless of that fact, maximum flow rates seldom exceed 500,000 bopd. And then declines can be very rapid. Most of the big deep water discoveries in the Gulf of Mexico have already declined more than 50% and will drop to relatively meaningless levels in another 5 years.

Just hang in there and develop a tough skin. I consider myself exceptionally smart and I've been wrong about a variety of matters as often as I've been right.

[Specop_007]

$this->bbcode_second_pass_quote('TWilliam', '')$this->bbcode_second_pass_quote('Geomancer', 'W')e have unlimited supply of organic materials suitable as feed material including, but not restricted to garbage, scrap tires, poisonous warfare agents, etc.
Building pyrolysis reactors is cheaper and faster than going for oil in its more difficult formations.

[PeakOiler]

I put together some data from the EIA and made this graph of Proved Oil Reserves vs. the Average WTI futures price since 2000:



I searched the forum and found this thread. It seemed like a good place instead of starting a new one.

The EIA data only goes through 2014.

See EIA Reference and EIA Table

Will the proved reserves go down in 2015 and 2016 since the price has dropped?

[sparky]

.
Contrarily to many belief , not all traders are moronic screen jockeys ,
certainly the short term trading is flighty
it's modus operandi is "follows the mob from the front" even if it's to jump off a financial cliff
however long term positions are more carefully considered , not only hard geologic date but financials and technicals are pored over by very well paid analysts .
a substantial increase in proven resources are parsed into several scenarios for any increase /decrease in proven reserves

[ROCKMAN]

Peaky - Mucho thanks...interesting chart.

"Will the proved reserves go down in 2015 and 2016 since the price has dropped?" That depends on whose reserve estimate you're talking about. If it's US pubcos of course they'll decline...write downs are continuing. By US law only those reserves that are economically recoverable can be posted. And that metric will require the current oil price be used. IOW the in ground reserve volume does change nor do the "technically recoverable" reserves decrease. But "commercially recoverable" reserves are dependent on the price of oil.

It's great to see the lag time between increases in prices and how long it takes before the actual response shows up. It obviously also works that way on the down side. But it does get complicated separating producing reserves from undeveloped reserves. Reserves A might have required $90/bbl to be initially economic but were developed at that time. But once drilled and producing it might take only $10/bbl to allow commercial production to continue. But Reserve B might be identical in nature to Reserve A but isn't producing yet and at $50/bbl may be no longer be classified as economic and thus = zero. This would be a huge adjustment for the shale plays since locations adjacent to drilled wells were allowed to be counted as proved. BUT COULD ONLY RETAIN THAT STATIS AT THE HIGHER OIL PRICE. And thus the huge reduction in US pubco values: lower revenue from proved producing reserves PLUS the loss of proved undeveloped reserves.

Of course none of this applies to the KSA, Russia and many other countries since they don't have to follow the SEC protocol in the US.

[PeakOiler]

Thanks ROCKMAN. I agree about the time lag that one can glean from the graph. It is interesting. But would the 2015, and eventually the 2016 data show some decline? (Another time lag is the EIA's data reporting. I wonder why the 2015 data hasn't been released? I guess we'll have to wait until 2018 to see the 2016 data).

I'm curious how the EIA accounts for depletion of the various plays in their reserve estimates.

[sparky]

.
The other side of depletion is bringing new fields on line , it seems to me that the running costs are rather low while development of new ones, especially of new provinces, are getting ever more capital intensive .

wouldn't this skew the development toward smallish, cheap, no technical problems, type of wells
rather than the super giants headaches makers ?

[ROCKMAN]

Sparky - Not really. Just focusing on the US for the moments those smaller LESS technically challenging projects fall within the world of the privately owned independents like the Rockman's company. And we've been chasing them relentlessly since the Rockman started more then 40 years ago. IOW there is no big inventory of such projects out there just waiting for someone to start looking for them. Same reason the small public independents went after the shales so hard: they had little else to chase.

[AdamB]

$this->bbcode_second_pass_quote('PeakOiler', '
')I'm curious how the EIA accounts for depletion of the various plays in their reserve estimates.

[sureshbansal342]

Peak oil theory ( commercial interesting ) may be correct but fossil fuel theory is a big mistake of modern science and major obstacle to solve other important pending natural puzzles .