Terry
----- Original Message ----- From: "Joseph Wanzala" <jwanzala at hotmail.com> To: <lbo-talk at lbo-talk.org> Sent: Wednesday, April 21, 2004 9:39 PM Subject: Re: [lbo-talk] World Oil Crisis
> Jane's Intelligence Report
> _________________________________________________________________________
>
> World oil crisis looms
>
> 21 April 2004 - The oil industry has been gripped by scandal since Royal
> Dutch/Shell twice this year downgraded its proven oil reserves by 20 per
> cent, or nearly 4bn barrels. Shell may not be alone.
>
> Other companies and even governments have hyped up the estimates of how
> much
> oil they have, which is a vital factor in measuring their economic health.
> If exaggeration proves to be widespread, it would have an immense impact
> on
> the Middle East, whose economic weight is almost totally dependent on oil
> and natural gas.
>
> Geologists and analysts have been saying for some time that estimates of
> global oil reserves may be dangerously exaggerated. If you take oil prices
> currently at around US$37 a barrel, the highest for nearly 15 years, US
> petrol prices at record levels and you add terrorist attacks and
> diminishing
> supplies, you have a recipe for inflation and economic slowdown. The
> question of reserves becomes a much more important factor.
>
> Earlier this month, The New York Times reported that internal documents
> and
> other data indicated that Shell had over estimated its proven oil reserves
> in Oman by as much as 40 per cent. But that seems to have been done
> because
> everyone hoped that the latest drilling techniques would reach more
> deposits
> than in the past and merit upgrading the estimates of reserves.
>
> The Oman estimates were based on assessments made in May 2000 by a senior
> Shell executive who was subsequently fired. He was among several
> executives
> who were said to have known about the unrealistic estimates of reserves
> and
> to have done nothing about it.
>
> If the exaggeration is confirmed, the estimate of recoverable oil will
> have
> to be lowered. That is bad news for Oman, which claims reserves of 5.4bn
> barrels and is heavily dependent on oil and gas exports but it is also bad
> news for the world as a whole.
>
> As the world's natural resources shrink and global warming changes the
> environment, competition for unimpeded access to them has intensified and
> will continue to do so. About four-fifths of the world's known oil
> reserves
> lie in politically unstable or contested regions.
>
> 351 of 810 words
> [End of Jane's non-subscriber extract.]
>
> http://www.janes.com/business/news/fr/fr040421_1_n.shtml
>
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