Doc - They might be righteous auditors. But as you know an audit cannot be more valid then the data provided. Given there's no independent data available then what the KSA provides it should cause some concern, don't you think?
Having worked with GCA a number of times my guess is they would not agree to conduct the audit unless they were given all the appropriate data. This would mean production information, logs, seismic maps etc. This is pretty easy for Aramco to do given they have it all built into finite element models. The audits that GCA have done I am familiar with involved a full rework of the information, not just checking numbers and signing off. Although Sarbanes Oxley applies only to US companies or companies traded on US stock exchanges (likewise instrument 51-101 in Canada) GCA behaves as if it applies everywhere, hence you can see some pretty heated arguments between the auditor and the operator even when the company is reporting somewhere else. Bottom line is GCA bases it's success on reputation, they aren't going to take on a project that could in anyway jeopardize that. It's not like they are going to charge Aramco anymore than they would any company out there for an audit of similar scope (if they did Saudi Arabia would have gone elsewhere).
My view is anything that comes out of this audit will be pretty reliable remembering that usually the audit will only address P1 and P2 reserves.Also I am not sure what the public disclosure rules are with respect to the Saudi exchange (where I suspect they will be listed). In the US and Canada reserve audit reports are submitted to the regulatory bodies and are public documents. Not sure if this would be the case on the Saudi exchange.
As to
The KSA numbers they give the auditors CAN NOT be verified. IOW the KSA can completely fabricate the numbers to generate the end result they seek. No one knows how much oil and water has been produced from Ghawar Field. And what production history the KSA gives the auditors cannot be vertified.
. Aramco would not have put false information into their full field models, otherwise the outputs would have been useless to them. GCA will have access to the model input data (generally they will review the models and then take the data and run their own). Can't see where the opportunity for the Saudis to fabricate information would come in.
I've mentioned it before: even with all the controls in the US system a talented geologist/engineer can prejudice the auditors in their favor to some degree. Early on the Rockman developed a strong reputation for being so skilled. Never lied or provided false data. But boy, if I could have, the reserve numbers would have been much bigger. LOL. Also had a good reputation for busting audits since I was well versed in the tricks.
this was a common occurrence before Sarbanes Oxley was put in place. After that all of the audit firms became legally responsible for their reports. If they came up with a number that they were coercised into by the operator then the SEC would go after both the company in question as well as the operator. My experience (I had the role of internal reserve auditor for awhile) is that after SOX the battles became more about making sure the auditor wasn't overly pessimistic when it came to Probable reserves. There was always a bit of leeway in Proven Undeveloped as it applies to shale reservoirs (there really isn't any data you could recover that would prove one way or another if a PUD area would produce until you drilled it) but the implementation of rules around how quickly PUD acreage had to be drilled and proven up has helped eliminate that problem. My point is it isn't the wild west in terms of reserve reporting any longer as far as publically traded companies go. Where you do find leeway is when firms like GCA or Ryder Scott etc are asked to perform assessment of resources. There are few rules around that so the numbers can be fairly unreliable.