[pepper2000]

I'm aware of the phenemenon of reserve growth, which explains why reported reserves seem to remain constant or increase at a time when production exceeds discovery. Most of the depletion models backdate reserve growth to the discovery of the field.

My question is how the depletion models anticipate future reserve growth. For example, when they estimate future discovery, does that discovery include reserve growth? Or is the anticipated reserve growth added to current reserves? Or do they not anticipate reserve growth at all?

[pup55]

It depends on who is doing the modeling.

For the "mathematical modeling" and "curve fitting" techniques, like we have been mainly doing, which was the method originally developed by Hubbert, the "reserve growth" is built into the estimate of ultimately recoverable reserves (Q-inf) that goes in to the beginning of the calculation.

APSO's modeling, from what I can tell, is mainly mathematical, and uses "backdated reserves" for each oilfield based on estimates made when the wells were originally drilled. Their main feature is that they can make a better educated guess about eliminating some of the "reserves growth" that snuck into the estimates in the 80's when the OPEC nations were cooking the books to get around some allocation protocol they were ostensibly working on. Simmons calls these "paper barrels" because they are mainly political and not geological.

Bakhtiari's modeling is a "fundamental" model which uses real engineering estimates of what is actually in the ground, realistic engineering estimates of what can be got out by technology improvements, and a lot of other factors such as exploration, depletion of the sweet grades, demand destruction, etc. to arrive at a production forecast curve. Anybody that actually has this kind of information is obviously in much better shape than those of us who are getting the data second- or third-hand.

The US-EIA's estimates are 100% political and may have no basis in reality whatsoever. According to them, we can enjoy an ever-increasing expansion in oil supply through 2035 and everything should be fine. The shocking thing about this is that well-paid government employees are producing this drivel at great expense to the taxpayer when they could be doing something useful.

The Saudi Government's estimates are 100% posturing to improve their negotiation position. You can at least understand why they are doing what they are doing. If we learned anything at all from middle easterners (Saddam Hussein), it is that these guys will tell you literally anything up until the very end just to preserve their negotiating power.

One wonders about what the infamous Cheney Task Force and/or the CIA has for a model. Although difficult to believe that the CIA is actually well enough organized to be able to get this kind of information, it is possible that they have enough detail on all of this to make an even more realistic fundamental/educated engineering forecast model that approaches what will actually happen. We will never know until after the fact, though. They would not dare release the truth to us, the ignorant masses.

Maybe the moderators would support a database on this site someplace to keep each of the above forecasts in some easily accessable way for comparison purposes.

[pepper2000]

Thanks for the response. I was confused because I've heard oil companies generally understate reserves to conform to SEC guidelines and OPEC countries overstate reserves to increase their production quotas. It's hard to tell what numbers to believe.