Life After Peak Oil

[fredfelt]

Here is one of my favourite tables. The world relies on Saudi's own assesment of its oil and gas reserves. Take a note what happened in 1990, all of a sudden they found 90 billion barrels of oil without saying where. And they have never produced a single barrel according to there estimates.

Is 1990 when OPEC changed the way they caluclated how much a member was allowed to produce in a year? Essentially the greater the stated oil reserves the more the country could produce. Therefore it's in a member's own interest to inflate their reserves so they are allowed to sell more oil.

For this reason analysts expect the reported reserves of oil are much greater than the actual reserves.

 

[david dissadent]

Is 1990 when OPEC changed the way they caluclated how much a member was allowed to produce in a year?

I think OPEC had production quotas based on proven reserves since its inception. The key year was 1990 when Aramco passed from the control of western companies to being a fully Saudi company (eventualy renaming as Saudi Aramco). Before 1980 the reserves were subject to US securities and exchange comissions audit. Since then they have basicaly been whatever the Suadis say they are. I think the inflation of reserves kicked of in earnest by Iraq in 1983, to fund its war with Iran. Other Opec members steadily followed and with oil being worth as little as $10 a barrel Saudi was eventualy forced to do so to maintain a production quota it could live with.