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Thursday, March 06, 2008

Arab States: Oil Reserves and Transparency

By: Giacomo Luciani

Do Arab governments deliberately announce misleading information about petroleum reserves, for political or economic reasons? One can only estimate, not truly measure, oil reserves in the ground, and reserve estimates can vary depending on the criteria adopted. A very conservative approach—one that is used by the U.S. Securities and Exchange Commission—includes only reserves that almost certainly exist and can be produced with current technology. The Society of Petroleum Engineers (SPE), on the other hand, advocates a probabilistic approach, classifying reserves by the probability that they are extractable: a 90 percent probability, a 50 percent probability, or a 10 percent probability. Read more

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