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New Audit Shows Higher Aramco Oil Reserves


An independent audit of the crude oil reserve base of Saudi Aramco is expected to result in a slight upward revision of the Kingdom’s oil wealth, Reuters reports, citing a source with knowledge on the matter.

The audit is part of preparatory work ahead of Aramco’s once highly anticipated and now indefinitely delayed initial public offering.

For the last three decades, the Saudi major has been reporting the same number for its reserves, at 261 billion barrels, as per BP calculations. However, now that Aramco is preparing to become a public company, transparency is required about its financial performance and reserve base, hence the independent audit.

An earlier Reuters report from April 2018 said the audit was expected to conclude Aramco’s reserves were slightly higher than 261 billion barrels, again based on information from unnamed sources.

One of these told Reuters the company’s reserve base was “more than confirmed”, with another adding “This is good for the company’s valuation.” These source said the reserve base of the company would be calculated at 270 billion barrels.

Riyadh claims Aramco is worth US$2 trillion, which would mean the floating of 5 percent of the company would bring in US$100 billion. However, external calculations have challenged the numbers on the grounds that Aramco’s valuation is inevitably tied to oil prices and these are not stationary, among other things such as investor trust in the company, which is notoriously opaque not only about its reserves but also its financial performance.

The audit is being conducted by companies including DeGolyer and MacNaughton, and Baker Hughes’ Gaffney, Cline, and Associates. It was initially planned to be completed by the end of 2017 but the job proved too complex to keep this deadline. With the IPO date delayed more than once, there has obviously been no great rush to finish the audit.

Now, the results are slated to be released later today, the Reuters source said.

By Irina Slav for

10 Comments on "New Audit Shows Higher Aramco Oil Reserves"

  1. Dr Salameh on Thu, 10th Jan 2019 7:10 pm 

    “First, the Audit can neither be independent nor unbiased since some of the companies that conducted the audit (DeGolyer, MacNaughton, and Baker Hughes’ Gaffney, Cline, and Associates) have or have had service contracts with Saudi Aramco, so it can’t truly be classified as an independent audit.

    Second, the claimed audit smacks of a blatant attempt by Saudi Aramco abetted by foreign oil companies which are beneficiaries of Saudi Aramco largess to resurrect the IPO of Saudi Aramco. This attempt is bound to fail miserably because the IPO is dead and buried. Saudi King Salman ordered its withdrawal because of risk of American litigation related to the 9/11 destruction of the World Trade Centre in New York and question marks about the true size of Saudi proven oil reserves.

    Third, we need to know the method the companies used to calculate the reserves. To get a relatively accurate figure, they need to count the actual number of Saudi oil-producing wells and the production and recoverable reserves of each. I doubt they would have done that as it takes a very long time to track the production and reserves of each well.

    Four, a simpler way of estimating Saudi proven reserves is to add Saudi production since the discovery of oil in 1938 till now (for which we have figures) and have it deducted from Saudi claimed proven reserves along with an annual depletion rate of Saudi aging fields averaging 5%-7% for the same period. When I did exactly that, my calculations came to around 70-74 billion barrels (bb) of remaining reserves. My figures are more or less in line with those of other experts.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

  2. I AM THE MOB on Thu, 10th Jan 2019 7:13 pm 


  3. Anonymous on Thu, 10th Jan 2019 7:48 pm 

    Countdown to the howls of indignation from the peak oilers…

  4. anon on Fri, 11th Jan 2019 2:12 am 

    awesome! time to go buy that new car!

  5. Here we go again on Fri, 11th Jan 2019 5:28 am 

    The independent auditors are like those at Moody’s or Standard and Poor’s are they?
    Selling stamps of approval for fees?
    Naah, they wouldn’t do THAT….sarcasm

  6. Paul on Fri, 11th Jan 2019 6:16 am 

    Maybe Aramco could help Mexico with its gasoline shortage.

  7. Sissyfuss on Fri, 11th Jan 2019 8:55 am 

    The easiest method to measure the reserves is to build a giant dipstick and plunge it into each well. What could be simpler.

  8. I AM THE MOB on Fri, 11th Jan 2019 8:59 am 

    This IPO is never going to happen..Put it the group with driver less cars, hyperloops, delivery drones, and mar colonies..

  9. Free Speech Forum on Sat, 12th Jan 2019 4:37 am 

    Society is becoming unglued.

    The USA is supposed to be a free country, but it is a police state. The US is no longer a democracy, Americans no longer have rights, and everything is illegal.

    The government blatantly breaks the law and then laughs and expects Americans to obey the law and pay taxes.

    How can Americans sleep at night now?

    What would an American do if he was married, had a house, car, job, and $100,000? Would he throw everything away to fight for freedom or would he try to justify being unconstitutionally wiretapped, groped by the TSA, being tracked with license plate readers, stopping for checkpoints, and being stopped and frisked?

    How much is liberty worth to you?

    Maybe Americans might benefit from studying King Charles, the French Revolution, the American Revolution, the Civil War, the Spanish Civil War, and the Vietnam War.

  10. Anonymous on Sun, 13th Jan 2019 11:45 am 

    “Reserve growth” is a well known generality. Over the course of decades knowledge improves (both extraction methods and geological details of the subsurface).

    Interestingly, King Hubbert was aware of this and even tried to allow for it. He didn’t allow enough for it. But still, he didn’t miss the concept as his latter day followers do.

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