According to Wikileaks, from 2007 to 2009, US officials believed that Saudi Arabia overstated its oil reserves by about 40%

According to Wikileaks, from 2007 to 2009, US officials believed that Saudi Arabia overstated its oil reserves by about 40% or 300B barrels - Guardian-

http://www.guardian.co.uk/business/2011/feb/08/sau...
www.gamblerdaily.com

Region: 
Middle East

Comments (21)

Feb 13, 2011

bullshit

Greed is Good.

Feb 13, 2011
konig:

bullshit

hmm... very constructive criticism, bud.

Feb 13, 2011

its just a diplomats beliefs do so say or reveal logic as to why i should believe him over any one else until then I will continue to disbelieve this

Feb 13, 2011

I don't ask you to believe you in this. Not to be mean, but whether you believe you in it or not makes no difference to me... I don't know if I believe it neither. Until anyone disprove it, there is always a possibility this is true. And traders need to be prepared for those kinda of event...

Feb 13, 2011

Nothing new!

Read 'Twilight in the Desert: The Coming Saudi Arabia Oil Shock and the World Economy' by Simmons. And yes this guy is the founder of Simmons & Co.

'Oh, yeah, that's right. That's what's it's all about, all right. But talkin' about it and bein' it, that's two different things.'

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Feb 13, 2011

It is a well-known fact that OPEC countries overstate their reserves to increase production.

Feb 13, 2011
mxc:

It is a well-known fact that OPEC countries overstate their reserves to increase production.

According to who, exactly? I go to school and I am close friends with the direct grand daughter of one of the gulf oil ministers, and I know the minister well. It's just rumours man. Cant you just let it die?

Greed is Good.

Feb 13, 2011
konig:
mxc:

It is a well-known fact that OPEC countries overstate their reserves to increase production.

According to who, exactly? I go to school and I am close friends with the direct grand daughter of one of the gulf oil ministers, and I know the minister well. It's just rumours man. Cant you just let it die?

http://www.ipc66.com/publications/IS_World_Oil_Res... Page 8, we just don't feel comfortable with you guys reporting more oil when you aren't opening new fields. Sure, the extraction technology is improving, so recoverable should be going up and this report may be a red herring, but you have to understand that we don't have the same trust in your ministers that you do.

Feb 14, 2011
konig:

According to who, exactly? I go to school and I am close friends with the direct grand daughter of one of the gulf oil ministers, and I know the minister well. It's just rumours man. Cant you just let it die?

Oh the minister is a friend of yours... Obviously you're in the know.

My source are academic. I tend to believe petroleum engineering experts more than Gulf oil officials who have a clear interest in overstating their reserves.

Feb 13, 2011

Maybe its just me but it seems like an overstatement wouldnt help opec countries in anyway. I feel that the only ones who would really benefit from this are consumer nations. It just baffles me that any producer would overstate their reserves. For one i would understate my reserves, yea its market manipulation but isnt overstating market manipulation as well?

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

Feb 13, 2011

OPEC nations have production quotas based on each country's reserves. higher "proven" reserves... higher production for your nation.

Feb 13, 2011

Overstating is an issue, but over production more so. Oil wells are almost human. You can get more production out of them, but you damage them. Basically taking more upfront, but getting less over the life.

Feb 13, 2011

I understand that they have production quotas based on reserve, but im talking in the terms of market prices. I know its cliche but its simple supply and demand. Say you have 100 billion barrles of oil reserves, if you over state that by 10% you apper to have more oil and that would drive the price down if demand is constant. If you understate it by the same percentage you would dirve the price up in a stable demand situation. Yes its a overly basic example and it doesnt reflect the real world in any way but the general principal is there.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

Feb 13, 2011
heister:

I understand that they have production quotas based on reserve, but im talking in the terms of market prices. I know its cliche but its simple supply and demand. Say you have 100 billion barrles of oil reserves, if you over state that by 10% you apper to have more oil and that would drive the price down if demand is constant. If you understate it by the same percentage you would dirve the price up in a stable demand situation. Yes its a overly basic example and it doesnt reflect the real world in any way but the general principal is there.

You're applying a monopoly principle to an oligopoly. If one player overstates they benefit by being able to pump more oil at a price above what would be available by increasing the quota. That makes it a soft way to break collusion without actually admitting to pumping more than your allowed reserve % and getting kicked out.

Feb 13, 2011

.

Feb 13, 2011

Yes greed def will play a factor in this situation.

Follow the shit your fellow monkeys say @shitWSOsays

Life is hard, it's even harder when you're stupid - John Wayne

Feb 14, 2011

subjective arguements are worthless in a case like this. We don't trust the fat white men that make your policies either, but do you see us bitching about it?

If you could name ONE field as strangely large and limitless as Ghawar (The main field), then I will give up my arguement completely. Theres nothing like it. for fuck's sake they haven't even discovered where the bottom is or how far away it is, and they are developing and using the most advanced technology. No need for all of this fear mongering.

Greed is Good.

Feb 14, 2011

i trust jim rogers

Feb 14, 2011

The term "reserves" is almost meaningless.

When you talk about "reserves", there are Proved, Probable, and Possible reserves... you can also talk about economically recoverable, technically recoverable, and reserves in-place, and all this is determined by probability curves. So the fact that the Saudis are "overstating reserves" tells me very little.

Typically there is a lot more oil in the ground than what is stated by the proved reserves figure. Again, it all comes down to statistics and probability. So if someone overstates proved reserves by 40%, that doesn't mean the oil isn't there... it might just be harder/more expensive to recover, or the technology may not be there yet to do so. Prices and technologies change over time, though, so the probability curves will change, as well as the definition of how much of the oil is technically recoverable, economically recoverable, etc...

Feb 14, 2011
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Feb 14, 2011