Quote:
Originally Posted by redneck
I would tend to think that the industry believes that any new and or possibly old reserves that they found, therefore "known", are on a need to know basis. And that you, I and the rest of the world doesn't need to know. Therefore they are not included in the "known" reserves. This information is held in house, tight to the vest and controlled by strict non disclosure contracts. If oil was known to be plentiful instead of declining, people wouldn't be as willing to go along with paying more. One only needs to turn to the De Beers model of marketing to understand the reasoning behind it.
|
Here's the problem.
By convincing people
your oil is in very limited supply, you are only convincing them to buy from other suppliers.
Or to support drilling projects by new suppliers... outside your country. Maybe you are sponsoring those drilling projects, but much of that profit goes to the territory where they're set up.
No. What you
want people to believe is that your reserves are boundless and steady, so that investors and speculators keep betting on
you.
This is the Saudi tactic. This has been, since time immemorial. People harping on the finiteness of Saudi wells are having a hard time getting concrete numbers on reserve estimates. The Saudis don't want to give out that information, and simply keep repeating "everything is fine, we've got enough oil to go on and on and on..."
The idea of an end to Middle Eastern oil does not help the countries giving out those figures, at all. So why fabricate negative numbers? Why give people more impetus to turn to US and Canadian alternative sources?
-
Instead, it is in the oil industry's best interests to assure people that they have lots of oil. And after that, to constrain the supply just enough to keep prices at a profitable level. And, after that, to keep supply high enough to keep prices down at a level where they don't suffer from low sales.
-
That price point for OPEC is around the $100 a mark. At the current $80 a barrel, they're suffering... most of them... but big players like Saudi Arabia can live with it. During the 2008 bust, oil prices were at a record high... but the producers weren't happy, because not a lot of people can afford $130 a barrel oil... so that ended up hurting them, too.
-
TL
R: Oil producers will tend to report reserves and production numbers that help establish (their) market equilibrium. They will not under-report reserves because that makes investor money evaporate. They will sometimes cite political unrest elsewhere, or supply shortfalls caused by
other oil producers' problems, but they will never, ever short
themselves on purpose.