Is Kuwait Lying About Its Oil Reserves?

Kuwait had a closed door session to discuss its reserves with Parliament before reaffirming the country’s proven oil reserves at 100 billion barrels.

As Xinhua points out, this is a odd and troubling set of events. Parliament had refused to pass the budget, which shows a large deficit, unless the oil ministry came clean with them about the status of the country;s reserves, hence the private briefing.
But that of course begs the question: if the reserves really were 100 billion, why the need to meet in cathedra? Because OPEC members are permitted each year to sell a certain amount of oil, and it is set as a percentage of the country’s published proven reserves. However, no one independently verifies this figure, which gives the member an incentive to cheat and exaggerate their reserves. Indeed, individual OPEC members have announced large increases in reserves in the absence of major discoveries.

In Kuwait’s case, the government’s budget is heavily dependent on oil revenues, so it cannot afford to sell less oil. But there are reasons to believe the Kuwaitis are exaggerating. Kuwait was one of the countries to boost its proven reserves from 63.1 billion to 90 billion the year the quota system was imposed. Petroleum Intelligence Weekly reported that it had seen internal Kuwait records that showed its reserves to be only 48 billion barrels, less than half the official figures.

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