[smiley]

I think we all agree on the fact that reserve numbers are notoriously unreliable. Various countries have overstated their reserves for political reasons.

That leaves me to wonder. Could the same be true for production numbers? As I understand production numbers are gathered in a similar manner as reserve numbers.

I've heard rumors that in the Soviet era the Soviet Union used to overstate domestic consumption and overall production, to look more prosperous to the rest of the world.

While the production of commercial oil producers is audited, I wonder if the same applies to the state owned companies. KOC (the Kuwaiti oil company) does not produce any statistics on its own production since it does not have any obligation to shareholders or investors. The same is true for Aramco.

The last weeks I have heard so many different estimates for the Saudi production that I'm starting to wonder. Does anyone outside the house of Saud have an estimate of what they are producing? Intertanko should have a fair idea of what these countries are exporting, but do BP and EIA use their information in their estimates.

So could these countries/companies be under/overstating their production? If they could I'm almost certain that they would.

Since the speculative leverage on the markets is so large the price is effectively decoupled from the production and the demand. One thing I can imagine is that in 1999 OPEC decreased their production (only on paper) sending the prices upwards, while keeping the profits up. Then they would now be probably overstating production in order to cool the prices.

It would explain a few things. For instance in 2003 OPEC production increased by 1.8 mbd according to BP. Yet non of that oil ended up in the US reserves since these showed the largest drop in years. Perhaps it was consumed? But while world production grew by 3.8%, demand showed a mere 2.1% growth. Thats a 1.5 mbd difference (or one supertanker per day), which is a lot of oil to hide somewhere. Could this be paper oil?

Has anyone of you heard anything on this topic? Or has anyone a compelling reason why this shouldn't be possible?

Cause if we you build a model on two parameters (production and reserves) and we can't trust both of them, we're basically flying blind.

[Pops]

Along the lines of fuzzy numbers, ASPO mentions increasing reserves and declining production by the "supermajors". I think its part 385 here:
http://216.187.75.220/newsletter43.pdf


We had a thread along the same lines; I’ll bump it up for new folks:
http://www.peakoil.com/fortopic32.html

[Pops]

Smiley, you beat Google alerts by 2 hours.

http://www.fromthewilderness.com/free/w ... audi.shtml

[Ferretlover]

"When all else fails, manipulate the data." Just imagine how much further along we would be with our analysis' if we could get ahold of accurate data and info!