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Saudi Aramco’s oil reserves confirmed by external audit

Saudi Aramco’s oil reserves confirmed by external audit thumbnail

The first independent audit of Saudi Aramco’s [IPO-ARMO.SE] oil reserves has confirmed the state oil company’s own figures, sources familiar with the situation said, ahead of its planned share market listing next year.

The listing, expected to be the world’s biggest initial public offering (IPO), is a centrepiece of a Saudi Arabian government plan to transform the country by enticing investment and diversifying the economy away from oil.

Based on a figure of 265 billion barrels, Aramco’s fields contain about 15 percent of the world’s proven reserves. Any finding that the reserves are significantly above or below that could affect the company’s market value in the listing.

“The independent audit produced no surprises,” a source familiar with the situation said on Friday. “Aramco’s reserves have always been reported internally in line with international practice.”

Aramco had asked two U.S. oil reserve auditing specialists to review its deposits.

These are Gaffney, Cline and Associates, part of Baker Hughes (BHI.N) and Dallas-based DeGolyer and MacNaughton. DeGolyer and MacNaughton completed its audit last year, two of the sources said.

Aramco and DeGolyer could not be reached for immediate comment on Friday. Gaffney Cline also could not be reached for immediate comment.

Saudi Arabia’s proven oil reserves have been listed at about 265 billion barrels in oil industry reference publications such as the BP Statistical Review of World Energy for many years.

Aramco said its crude oil and condensate reserves were 261.1 billion barrels in its 2015 annual report.

The reserves audit produced figures “definitely not below” those published by Aramco, a second source familiar with the matter said, while a third source said the auditing firm’s estimate was higher than Aramco’s own.

The IPO plan is being championed by Deputy Crown Prince Mohammed bin Salman, who oversees energy and economic policy in the world’s top oil-exporting country.

Prince Mohammed has said he expects the IPO, which will offer up to five percent of the company, to value Aramco at a minimum of $2 trillion.

Senior oil industry figures have welcomed the Aramco IPO for casting more light on Saudi Arabia’s oil reserves. Many of the world’s biggest sovereign reserves holders have not changed their numbers for years.

The head of Russian oil company Rosneft (ROSN.MM) Igor Sechin said last year the Aramco listing would give transparency over reserves data which had not been updated for 30 years.


35 Comments on "Saudi Aramco’s oil reserves confirmed by external audit"

  1. Nony on Sat, 28th Jan 2017 4:57 pm 

    The Staniford Simmons type Saudi decline worriers (Twilight in the Desert, Nosedive in the Desert) have been spectacularly wrong over the last 10 years.

  2. Midnight Oil on Sat, 28th Jan 2017 5:31 pm 

    Boy, that is a relief…. Now Peak Oil News can shut down and we can log in on pirn hub

  3. rockman on Sat, 28th Jan 2017 7:43 pm 

    “…have been spectacularly wrong over the last 10 years.” Of course they were wrong. Obviously the reason the KSA never reduced proven reserves after producing many BILLIONS bbls of oil year after year from existing fields is the constant refilling by continuously regenerating abiotic oil.

    Now we have definitive proof from a well respected “independent” analysis that, in fact, oil reserves are virtually infinite.

  4. Anonymous on Sat, 28th Jan 2017 7:52 pm 

    Let me guess, this ‘audit’, likely consisted of the ‘auditor’, looking at the figures provided by the ‘auditee’, and then they said…

    All looks good to me….

    “The head of Russian oil company Rosneft (ROSN.MM) Igor Sechin said last year the Aramco listing would give transparency over reserves data which had not been updated for 30 years.”

    And guess what? The reserves STILL have not been updated, nor has Aramco’s ‘transparency’ either. The ‘sauds’ no doubt keep two sets of figures. The (real ones-still beyond top secret), and the ones they showed this auditor. A PR exercise, nothing more.

  5. Nony on Sat, 28th Jan 2017 9:09 pm 

    Exploration, development, better EOR, etc. etc. can raise reserves. Not a new concept. The world as a WHOLE has more reserves than it did 30 years ago. Arabia is very rich in hydrocarbons and still has not been as well investigated as the US.

  6. Nony on Sat, 28th Jan 2017 9:21 pm 

    Here’s STuart Staniford at The Oil Drum in 2007, predicting 8%+/year decline of Saudi oil from ~9 MM bpd.

    “Overall, I feel this data is clear enough that I’m willing to go out on a limb and conclude the following:
    •Saudi Arabian oil production is now in decline.
    •The decline rate during the first year is very high (8%), akin to decline rates in other places developed with modern horizontal drilling techniques such as the North Sea.
    •Declines are rather unlikely to be arrested, and may well accelerate.
    •Matt Simmons appears to be right in Twilight in the Desert, but the warning did not come until after declines had actually begun.”

    What have we seen over the last 10 years? Saudi’s have pumped just fine, often above 9 MM bpd (dropping it to try to drive down price in 2009 and 2017).

    And The Oil Drum shut down. And Staniford shut up.

  7. brent on Sat, 28th Jan 2017 10:04 pm 

    Nony you have no way of proving anything you just said. For all we know Saudi Arabia is cutting production right now because they have to never to go up again.

  8. John on Sat, 28th Jan 2017 10:09 pm 

    Rockman- so oil replenishes at 10MB per day abiotically just in SA? Don’t you think there would be volcanoes of crude all over the planet?

  9. Apneaman on Sat, 28th Jan 2017 10:43 pm 

    Nony’s retard logic – The Oil Drum shut down therefore peakoil is canceled. Depletion no longer exists.

    Where did you go to school nony…mouth breather high?

    Nony was on the remedial debating team at MBH and his teacher told him he was the second best debater in the whole school. What she never told him was that every one else was tied for first.

  10. Apneaman on Sat, 28th Jan 2017 10:54 pm 

    Nony, you can say The Oil Drum died if you like, but it’s kinds like a dead dandelion with the writers being the seedlings – then a wind came along and dispersed the writer-seeds over the internet and the writer-seeds all took root and have grown/produced more peak oil writing than ever.

    From 1 to 13 with more readers than ever before.

    The exact opposite of your tired old contention.

    The Oil Drum writers: Where are they now?

    Nate Hagens is at The Monkey Trap

    JoulesBurn (Brian Maschhoff) is at Picojoule

    Euan Mearns is at Energy Matters

    Heading Out (Dave Summers) is at Bit Tooth Energy

    Rune Likvern is at Fractional Flow

    Gail the Actuary (Gail Tverberg) is at Our Finite World

    Chris Vernon is at Chris Vernon

    Big Gav is at Peak Energy Australia

    Robert Rapier is at Energy Trends Insider

    jeffvail is at Jeff Vail

    Jérôme à Paris is at European Tribune

    phil hart is at Phil Hart

    Luís de Sousa is at At The Edge Of Time

  11. Nony on Sun, 29th Jan 2017 1:36 am 

    i sucked so much cock last night I think I’m pregnant.

  12. Midnight Oil on Sun, 29th Jan 2017 2:50 am 

    That’s disgusting Nory!
    BTW, next time don’t swallow.

  13. peripato on Sun, 29th Jan 2017 3:07 am 

    More fake news

  14. Davy on Sun, 29th Jan 2017 4:55 am 

    Nony, I am glad you are here and you offer a lot of relevant information I find important. You are very smart on the subjects you talk about. I do not agree with you on your optimism because you do not integrate the systematic side of the economy and our civilization into the discussion of oil. You keep it on the business and engineering level. This is understandable because the two while interrelated don’t mix well in the practical day to day study of the oil complex. My view is more abstract, theoretical, and systematic. Nonetheless, your views are important and it offers added insight into my view the world is in global decline. I consider both views important in my goal of determining the turning of our civilization.

  15. Dredd on Sun, 29th Jan 2017 5:24 am 

    The report is like the laws that lobbyists write for congress.

    Got rubber stamp?

    Remember the Enron auditors?

    In 2002, the firm voluntarily surrendered its licenses to practice as Certified Public Accountants in the United States after being found guilty of criminal charges relating to the firm’s handling of the auditing of Enron, an energy corporation based in Texas, which had filed for bankruptcy in 2001.” – Wikipedia

    Got confirmation bias? (The Donald University vs. The Lord GOP University – 2)

  16. Cloggie on Sun, 29th Jan 2017 5:37 am 

    Nony, you can say The Oil Drum died if you like, but it’s kinds like a dead dandelion with the writers being the seedlings – then a wind came along and dispersed the writer-seeds over the internet and the writer-seeds all took root and have grown/produced more peak oil writing than ever.

    TheOilDrum died because the most competent bean counters knew that the ASPO2000-Heinberg-Peak Oil-2015 story was not going to happen. End of story.

    The most prominent members continued to write, not about a non-immanent peak oil, but about energy matters, because that is all they can.

    And there are still these laypersons like shortonpeakoil, Gail, Heiny the low hanging fruit cake and similar members of the Peak Oil Industrial Complex, who all thought they had discovered a prominent market niche, complete with invitations to congresses in remote places, book contracts, post-carbon institutes and what not, who refuse to see the truth, namely that the earth’s crust is loaded with hydro-carbons that can be exploited with new technology, probably admittedly against ever higher prices, creating the opportunity for renewables to take over, probably without a civilizational “dieoff” dent. Sorry, the Greatest Show on Earth has been cancelled, you can come home now makati (unless you are afraid of a civil war), than stay where you are.

    For me the topic “peak oil” has indeed lost much interest, renewable energy is going to win anyway and is already competitive in many places and in 30-50 years time, when most conventional power stations will have been written off, renewable energy will take its place.

    It is still interesting, like the IT-boom was interesting from Burroughs mainframe & Apple-II to Android/iPad/internet via the Commodore-64, but the potential for a real spectacle (“dieoff”) has vanished. There isn’t going to be any.

    Meanwhile other things have become more interesting: like is Western civilization going to survive? These days the Trump-Soros standoff is way more interesting than at which date Siemens will reveal its new 8 MW turbine. The latter is going to happen anyway.

    Climate change/global warming? Have a fatalistic attitude about it. We (in Europe) are already doing what in all reason can be expected of us (getting rid of fossil by 2050) and if that is not good enough, well, may the devil get us.

    Climate change is probably real, but I’m not convinced it is necessarily all that dramatic. And there are clearly benefits as well. Higher temperatures require less space heating (the good folks of Calcutta are excused to have a different opinion about it). Extra CO2 in the atmosphere and a warmer climate “greens” the planet, which is good, right?

  17. Davy on Sun, 29th Jan 2017 6:19 am 

    This peak oil lost interest is typical of techno optimist who are lost in a faith. You would think a techno would be grounded in science and they are on some levels. The problem is deception of their faith. Almost all techno optimism deals with today’s problems by preaching a tomorrow of its realization. They take todays realities that are grounded in science and solve them far off into the future with a trend of technological progress. They take as a constant the social fabric and economic continuity of growth. They will acknowledge economic cycles but it is always in a long term trend or a manageable reset to a lower level but still with a status quo. There must always be a status quo connection because they know in their cognitive dissonance that their affluence from technology is fragile.

    Techno conformational bias is strong with a world that is techno optimistic. All leaders consider technology as the way forward. Why wouldn’t they, people are habituated towards progress and it gets votes. No one is willing to face life with real wisdom. Few modern humans can handle the truth. Wisdom is not part of techno optimism because wisdom considers no and failure. That is nowhere to be found in techno optimism and today’s social narrative of growth and progress.

    Peak oil dynamics are alive and well and to discount them is lazy. Peak oil dynamics clouds techno’s future vision. A techno optimist lets himself think he can discount peak oil dynamics because he has faith in a renewable future that will be an energy transformation. There is little evidence yet an energy transformation is possible. It has not been realized anywhere in a systematic way. There is more to civilization than energy. If this transformation is not possible then peak oil dynamics are a seal of death for modern civilization.

    The techno optimist continually fails with continuity and dimension. Getting from here to there is theoretical but is talked about as if it is already a reality. Momentum is already a result. Inertia is considered negligible. Issues of scale and time frame are not solved. The technology is not refined enough for the next and hardest step of fossil fuel phase out. Currently renewables are just being added to a growing fossil fuel mix. Let’s see how techno optimism holds up when fossil fuels are being removed from the mix.

    Problems and population are on the increase. Entropy never sleeps and the whole system that has allowed global civilizations is rusting and in decay. All that must be replaced and the techno energy transition accomplished. That should humble a normal human but not a techno optimist. Technology is their sky daddy and their faith is solid. Good luck once reality through Nature turns techno dream into dashed hopes. Technos have reasons to be optimistic but not for the reasons they are optimistic. There is great promise for renewables as an extender for civilization. Many locals can benefit in a huge way but an energy transition for a new and greener status quo of affluence and progress is still just sky daddy talk.

  18. Cloggie on Sun, 29th Jan 2017 6:38 am 

    Davy, Greg, Makati and others are somehow a little disappointed that the great peak oil crash is not going to happen.

    All dressed up and nowhere to go.

    Don’t worry folks, a lot of different spectacle will be coming your way during your lifetime.

  19. shortonoil on Sun, 29th Jan 2017 6:49 am 

    Until Baker Hughes confirms this it should be considered as Fake News. In the event that they don’t Reuters needs a new editor.

  20. Davy on Sun, 29th Jan 2017 6:55 am 

    I reference this because we have the new forces of nationalism facing globalism and we have this unresolved problem. You need a serious dose of optimism to think both these challenges will cooperate and allow status quo growth that is vital to things like an energy transition. I think pessimism is in order now economically. BTW, things are even worse in Europe, Japan and China.

    “Why Unwinding The Fed’s Balance Sheet Could Get Messy”

    “The Federal Reserve should watch what it says about its $4.5t balance sheet. With so much uncertainty in the market about how it will be reduced, a few mistimed words could roil markets faster than you can mouth “taper tantrum.”

    “Hopefully they’re trying to avoid the past. Bernanke surprised the markets in mid-2013 when he said the Fed might cut back on monthly bond and mortgage-backed securities purchases by $10b. The result, traders panicked and pushed the 10-year yield to nearly 3% from below 2% in four months, sparking a crisis in emerging markets.”

    “If they mess it up this time, it could be worse. The Fed may announce a taper while they are increasing rates and in a bearish bond market, which could exacerbate any move because there are fewer buyers to absorb supply. Tapering a balance sheet of this size has never been done. The Fed will also be tightening for the first time in more than a decade — raising the Fed Funds rate without draining reserves is repricing the curve, it isn’t tightening. Increasing rates changes the price of money in circulation, tapering reduces it.”

    “But if markets don’t get the message or a gradual message isn’t gradual enough, traders won’t wait. They will want to get ahead of the curve and that could lead to a surge in yields. Some analysts predict yields will rise 15 to 20 basis points, but a fixed-income trader I spoke with said that may just be the reaction on the first day. As traders will tell you, getting into a long position is easier than getting out”

  21. onlooker on Sun, 29th Jan 2017 7:22 am 

    Absolutely, that the techie optimists are lost in their fantasies. In doing so they fail to see the wider context of what is happening. As Short bought up the giant oil fields that are the backbone of the production are now reaching their dying stage. Yet we have attempts to deny this fact with made up numbers such as the 275 Gb. So certainly Saudi Arabia has been misleading and omitting the true extent of the depletion scenario. Remember Mathew Simmons already sounding the alarm about this duplicity on the part of KSA. Then we have the nationalism trend that is part and parcel of a reflexive action to keep people out and resource inside a country. All as more and more people have a premonition of dire times to come. Yet, Cloggie and others somehow amid all this sees a bright dawn of a wind and solar age. How can anything be built in a collapsing scenario? Oh with fairy dust.

  22. q on Sun, 29th Jan 2017 8:00 am 

    Everything in the US is 100% reliable, honest and fake-free. So if the US auditors hired by truthful Saudi Arabia says so, it must be true. 🙂

  23. dissident on Sun, 29th Jan 2017 8:01 am 

    How the f*ck do you “audit” reserves? Does the “auditor” check the physical state of every Saudi field? Not a chance. As noted already, this is a pure PR exercise where pieces of paper are shuffled and 1+1=2 is found to be consistent. Nobody stole any oil fields so everything is hunky dory. But the link between reality and the pieces of paper being shuffled is never “audited”. What a stupid joke.

  24. joe on Sun, 29th Jan 2017 8:56 am 

    When Russia comes out says that this audit validates every country (hes honest so I must be honest too, right?), is reaching beyond reasonable. They looked at models and drilling records and said, yup, all hunky dory, because to actually go out and drill your own test wells and use your own independent equipment like a real audit would, would take years. Saudi came up with this scheme a couple of years ago during the power transition to keep everyone from doing to Saudi what happened in Syria . Then they invaded Yemen with a mercenary army to make sure they remain in power by forcing the world to back them against ‘evil’ Iran. This has nothing to do with diversity of economy or peak oil or anything like that, this is economic security combined with family power politics. This is how they got America to support them in the first place and how they will continue to do so.
    It doesnt matter if they dont have a drop oil, as long as they have power theyll find oil. And when they cant, theyll load up the camels and leave Mecca.

  25. rockman on Sun, 29th Jan 2017 10:01 am 

    “The world as a WHOLE has more reserves than it did 30 years ago.” In the last 30 years the KSA has produced about 85 BILLION bbls of oil. And the world about 730 BILLION bbls.

    It would be interesting to see the list of those projects where those new 85/730 BILLION bbls came from.

    I actually know where they came from…those oil volcanos mentioned above spewing out all that endless abiotic oil. Unfortunately due to confidentiality agreements I can’t disclose those locations.

  26. Denial on Sun, 29th Jan 2017 11:13 am 

    Rock with all due respect when you mention abiotic oil you should put a (sarc) behind it as this is the world wide web and some may think that abiotic oil does exist….ie oil replenishing itself every 50 years or so…
    There has got to be a better way of monitoring if wells are drying up….maybe through water pumping or a panic to find more oil…Just as no two wells are alike I think no two countries are alike in their oil reserves. But I can’t help but think that the Saudi Oil will follow the oil in the states in decline;

  27. dave swingle on Sun, 29th Jan 2017 11:27 am 

    Oh yeah peak oil! It is always just 10 years away!! How about Peak bullshit!

  28. Cloggie on Sun, 29th Jan 2017 11:52 am 

    Rock with all due respect when you mention abiotic oil you should put a (sarc) behind it as this is the world wide web and some may think that abiotic oil does exist…

    No, that’s what the Rockman seriously believes (and not that it matters, but so do I).

    So the #1 oil expert here believes that oil is of abiotic nature (no dead dinosaur baloney).

  29. joe on Sun, 29th Jan 2017 1:27 pm 

    Scientists dont even know 100% how Earths water got here, what chance does oil have?

  30. BobInget on Sun, 29th Jan 2017 2:53 pm 

    Oil reserves in Venezuela
    From Wikipedia, the free encyclopedia

    The proven oil reserves in Venezuela are recognized as the largest in the world, totaling 297 billion barrels (4.72×1010 m3) as of 1 January 2014.[1] In early 2011, then-president Hugo Chávez and the Venezuelan government announced that the nation’s oil reserves had surpassed that of the previous long-term world leader, Saudi Arabia.[2] OPEC said that Saudi Arabia’s reserves stood at 265 billion barrels (4.21×1010 m3) in 2009.[3]

    Venezuela’s development of its oil reserves has been affected by political unrest in recent years.[when?] In late 2002, nearly half of the workers at the state oil company PDVSA went on strike, after which the company fired 18,000 of them. Venezuela’s crude oil is very heavy by international standards, and as a result much of it must be processed by specialized domestic and international refineries. Venezuela continues to be one of the largest suppliers of oil to the United States, sending about 1.4 million barrels per day (220×103 m3/d) to the U.S. Venezuela is also a major oil refiner and the owner of the Citgo gasoline chain.[4]

    In October 2007, the Venezuelan government said its proven oil reserves had risen to 100 billion barrels (16×109 m3). The energy and oil ministry said it had certified an additional 12.4 billion barrels (2.0×109 m3) of proven reserves in the country’s Faja del Orinoco region.[5] In February 2008, Venezuelan proven oil reserves were 172 billion barrels (27×109 m3).[6]

    By 2009, Venezuela reported 211.17 billion barrels (3.3573×1010 m3) of conventional oil reserves, the largest of any country in South America.[7] In 2008, it had net oil exports of 1.189 Mbbl/d (189,000 m3/d) to the United States.[8] As a result of the lack of transparency in the country’s accounting, Venezuela’s true level of oil production is difficult to determine, but OPEC analysts estimate that it produced around 2.47 Mbbl/d (393,000 m3/d) of oil in 2009, which would give it 234 years of remaining production at current rates.

    Orinoco Belt[edit]

    Orinoco Belt assessment unit, USGS
    In addition to conventional oil, Venezuela has oil sands deposits similar in size to those of Canada, and approximately equal to the world’s reserves of conventional oil. Venezuela’s Orinoco tar sands are less viscous than Canada’s Athabasca oil sands – meaning they can be produced by more conventional means – but they are buried too deep to be extracted by surface mining. Estimates of the recoverable reserves of the Orinoco Belt range from 100 billion barrels (16×109 m3) to 270 billion barrels (43×109 m3). In 2009, USGS updated this value to 513 billion barrels (8.16×1010 m3).[9]

    According to the United States Geological Survey, the Orinoco Belt alone is estimated to contain 900–1,400 billion barrels

  31. BobInget on Sun, 29th Jan 2017 3:34 pm 

    “Based on a figure of 265 billion barrels, Aramco’s fields contain about 15 percent of the world’s proven reserves. ”

    Just because we now have (drilling) rigs that are
    three four even six wells capable from one pad doesn’t really give us more proven then a single well per pad.

    One item often left unsaid . Many of those 200,000 well paid, free spending, oil workers laid-off in 2015/16 will never be rehired.

    AI (artificial intelligence) not Mexicans or Muslims
    done took their old jobs. It started with self driving trucks, super 3 D computers and those walking drilling rigs. in the last three years oil industries got leaner and meaner.

    Add another ‘peak’ this or that. Peak oil worker.
    AI just made shale, oil sands, Arctic oil, ultra deep sea, conventional, profitable at sustainable lower prices.

    The same thing is happening in Asia. Japan is world’s leader in Robotics with the US and China
    on the outside closing fast.

    DJT brags he will bring back manufacturing to the US. Manufacturing went South because labor is cheaper. Plus, environmental concerns. Better Chinese air and water gets dirty then American…

    It all gets down to cleaner energy. Shedding
    “seventy five percent” of restrictions, no magic bullet.

  32. John on Sun, 29th Jan 2017 3:57 pm 

    Rockman- what do you think will be maximum oil production globally?

  33. Steven Manders on Mon, 30th Jan 2017 5:35 pm 

    265 billion barrels of crude oil, divided by 7 billion people gives 38 barrels of oil per person, to last for the rest of history. How long does the rest of history have left to run?

  34. Nony on Mon, 30th Jan 2017 10:25 pm 


    Reserve growth is a well known phenomenon. Also, SEC style reserves accounting is typically conservative versus what is eventually produced.

    Peakers have been beating the drums for years that SA was about to fall off the cliff and it didn’t happen. They complained about lack of transparency. Now we have two top notch external firms audit the reserves and come back with the figure. And peakers are still not happy.

  35. Nony on Tue, 31st Jan 2017 10:11 am 

    “Estimates of the volumes that will ultimately be produced from reservoirs and fields tend on average to increase substantially over time. Rather than the
    discovery of new fields, it is this phenomenon — the increase of estimates of ultimate recovery from a field or group of fields over time due to the extension of proved reservoir area(s), in-field discovery of one or more new reservoirs, and several other factors – – that accounts for the majority of both current domestically-sourced oil and gas supplies and current additions to domestic proved oil and gas reserves. This phenomenon is often called
    “reserves growth,”

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