Reuters reports Kuwaiti oil reserves might be only half of what is claimed

[JohnyCanuck]

LONDON, Jan 20 (Reuters) - London Brent crude futures rose $2 on Friday to its highest level since early September after a report that Kuwait's oil reserves are only half those officially stated.

March Brent <LCOc1> rose $2.01 to $67.24 a barrel after industry newsletter Petroleum Intelligence Weekly (PIW) reported it had seen internal Kuwaiti records showing that Kuwait's reserves were about 48 billion barrels, compared to the officially stated 99 billion barrels.

http://today.reuters.com/news/newsArticleSearch.aspx?storyID=231520

The Association for the Study of Peak Oil and geologists like Colin Campbell and more recently investment banker Mat Simmons have been questioning the various Middle Eastern nations publicly proclaimed reserves for some time now. They speculate that many of these oil producers bumped the size of their reserves in order to get higher production quotas from OPEC and without having the scientific or geological evidence to back up the increases. If this initial Reuters report turns out to be correct it will be further evidence these concerns were warranted.

In the meantime a new report on Peak Oil appeared on a UK newspaper's web site today. The author, earth scientist and a former geology lecturer at the Royal School of Mines Jeremy Leggett, indicates the evidence is accumulating that Peak Oil is going to happen sooner rather than later and the "late toppers" and peak oil optimists who believe that new discoveries and better recovery techniques will substantially push out the date of peak are being over optimistic. He also touched on the possible manipulation of their reserve figures by OPEC countries.

What they don't want you to know about the coming oil crisis

Soaring fuel prices, rumours of winter power cuts, panic over the gas supply from Russia, abrupt changes to forecasts of crude output... Is something sinister going on? Yes, says former oil man Jeremy Leggett, and it's time to face the fact that the supplies we so depend on are going to run out

By Jeremy Leggett
Published: 20 January 2006
The Independent

<snip>

Here's how it happened. In the 1950s, the nations with oil organised themselves into the cartel known as Opec. Opec's main aim was and is to try and control the price of oil. They don't want it too low. That would cut their income. Neither do they want it too high. That might get the addicts thinking of maybe going elsewhere. They want it just right, perhaps around $30 per barrel in today's money. To do this they can't produce too much, because that would flood the market, causing the price to drop. They have to produce exactly the right amount collectively, and that means quotas. After much bickering in the early days, the Opec oil ministers decided in 1982 to allocate a quota to each country in the cartel according to the size of its reserves.

But in 1985, they began to - how shall I put it? - massage the data. Kuwait was the first to give in to temptation. They found that their reserves had gone up overnight from 64 to 90 billion barrels. In 1988, Abu Dhabi, Dubai, Iran and Iraq all played the same card. Abu Dhabi had been so needlessly conservative that their reserves went up from 31 to 92 billion barrels. They surely must have employed some incompetent geologists. How could they have overlooked 60 billion barrels? Finally, in 1990, Saudi Arabia decided it too had been conservative, hiking its total from 170 to 258 billion barrels.

You can also see in BP's data that the Middle East's reserves have been almost constant in size since then. What you don't see in the figure - but do see in the data - is that this is apparently the case not just for the sum of the reserves of the Middle Eastern oil producers but also for the figures of reserves for the individual nations.

Consider the enormity of this coincidence. It means that the billions of barrels found in new discoveries each year would have to match exactly the billions of barrels produced each year in each of the Middle Eastern OPEC nations, and do so consistently every year for more than a decade.

http://news.independent.co.uk/environment/article339928.ece

[SoCalDem]

1. Jesus Christ on a skateboard.. would they make up their minds!

Not long ago they were telling us there was MORE oil than they thought..I think they don;t know.. and are just trying to justify jacking up the prices whenever they want to,.

[SammyWinstonJack]

8. I bet they know and are TRYING to jack up the prices period.

:grr: Big profits just because they can get away with it! FReakers would be screaming their collective heads off if this were happening under a Democratic President, but King George gets a pass with them on the price gouging going on under his watch.

[hopeisaplace]

9. yep I'll bet it's all a money grab

[hatrack]

2. Fascinating story - looks like all those calls for transparency . . .

. . . may have been merited in spades. This is especially interesting in that Kuwait admitted that Burgan had peaked early last November.

[lovuian]

3. Kuwait and Saudia Arabia are very quiet ... amd they can't

pump anymore to compensate for China's hunger...

Americans and Corporations are going to HAVE to pay for gas???

I think they overestimated Iraq's reserves...and these oil wells are older
Its a time of economic change...

[necso]

4. The latter piece (link) is a somewhat lengthy

but worthwhile (and important) read.

However, I wish that there was a little more information in it on oil-field recovery rates and practical extraction problems -- these loom large. For example, I think that this statement, "This despite 50 per cent of the oil coming from the Ghawar field, where a water cut is already reported", might be lost on some people.

[mom cat]

5. Damn...Its that fuzzy math again.

[phoebe]

6. that's odd - wasn't Cheney just over there? More of his secret

energy deals no doubt..

http://www.usatoday.com/news/washington/2006-01-16-cheney-kuwait_x.htm?
January 16, 2006

snip

WASHINGTON (AP) — Vice President Dick Cheney will visit Kuwait in a show of respect to Sheik Jaber Al Ahmed Al Sabah, the Kuwait emir who died Sunday, Cheney's spokeswoman said Monday.

snip

After meeting with officials in Egypt and Saudi Arabia on Tuesday, Cheney will fly to Kuwait to mark the passing of Sheik Jaber.

snip

Last month Cheney canceled planned visits to Egypt and Saudi Arabia to rush home and cast his seventh tie-breaking vote in the Senate on Dec. 21. Before returning, he visited Iraq, Pakistan, Afghanistan and Oman.

The 51-50 vote passed legislation to cut federal deficits by $39.7 billion over five years. The vice president, under duties spelled out in the Constitution, also serves as president of the Senate and steps in when needed to break ties.

[madokie]

7. Now that we have our hands on Iraqi oil, they'll have to quit

side drilling into the Iraq fields. remember that is what pissed saddamm off in the first place.