Petrleum Reserves underestimated by a Factor of Two

environment.newscientist.com... 0

Oil companies produce a bell-shaped probability distribution for how much each oil reservoir might hold, and then quote as an indicator of the reservoir's capacity a figure they are 90 per cent certain they can exceed. When publishing a result for multiple reservoirs, they simply add up the figures for each one. And this is where the problem lies.

"They should be combining the bell curves for each reservoir," says Pike. Adding the numbers for each reservoir ignores statistical information about the extremes of the distribution, giving a result which underestimates the true total figure for all the reservoirs.

According to published estimates, there are 1200 billion barrels still to be extracted, but Pike says there could in fact be twice as much. "The figures are almost meaningless and just provide a conservative estimate for shareholders."

uh oh,

breaking news: oil fraudsters hysterical and mathematically inept.

who would have thought. feign ignorance and reap record profits while at it. a complete scam.

Interesting information. Too bad it's all estimation. If they could get the numbers from the oil companies and do an actual analysis, this would be more valuable.

reply to post by PsychoHazard


wait, wasn't oil supposed to run out in the 1990s? and before that in 1950? now it's 2030, what gives, sometimes i wish it just did vanish, so it could not longer be sold at ripoff prices.

/rant

predictions, most certainly, but they run both ways, if a forecast is instrumental in a price hike, why not in a slump? such onesidedness indicates selective release of information, ie. censorship. i doubt big oil alone could pull it off, gov'ts on the other hand....

reply to post by Long Lance


Governments, oil companies, "independent" research firms, they're all in it together. Anyone who's taken a class in statistics can tell you that numbers are just numbers, and they can mean whatever you want them to mean if you pick the right ones. They'll never give us the raw data, they'll just give us the cherry-picked numbers that justify whatever new way they've come up with to bone us.

Originally posted by Long Lance\

uh oh,

breaking news: oil fraudsters hysterical and mathematically inept.

who would have thought. feign ignorance and reap record profits while at it. a complete scam.

I'm curious to hear your explanation of how underestimating the reserves beneath the ground would have any impact on the price that previously pumped oil is sold at.

I.e., what does the amount that's estimated to be in the ground have anything at all to do with the current selling price, or the profits from current sales?

reply to post by PsychoHazard


yup, from the history of corporations, why would anybody trust them putting out any data. independent review combined with openness is the only way that i will believe anything put out by these people. and i know personally. i lost 4k on bear sterns stock, after the CEO in a public face to face statement came out 2 days before the collapse and said everything is fine. so, conclusion...lying sacks of sh-t until proven otherwise.

reply to post by jamie83


markets are about perception, if the outlook is good the price will mirror it. drill Alaska, drill every plate seam and go deep if necessary. the Russians are having good success with it, apparently.

Heh, just try to nail down the numbers for the Bakken formation. I swear, depending on which source you read, they are all over the chart.