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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Independent Audit Confirms Saudi Aramco’s Huge Oil Reserves

The external audit of the oil reserves of Saudi Aramco ahead of its planned IPO has confirmed that Saudi Arabia’s oil giant has more than 261 billion barrels of reserves, Reuters reported on Friday, citing sources in the know.

On Thursday, news broke that Saudi Aramco had hired two U.S. firms - a unit of Baker Hughes and a Dallas-based reserves auditing firm to look into how much oil reserves it really has. Saudi Aramco had tasked Baker Hughes’ energy consulting services unit Gaffney, Cline & Associates, as well as Dallas-based DeGolyer and MacNaughton, to perform the reserves auditing, various sources have told Reuters.

According to The Wall Street Journal, which first broke the news of Aramco hiring Gaffney, Cline & Associates, Saudi Aramco had hired Gaffney, Cline & Associates late last year and its audit is now complete.

Today, sources told Reuters that the independent audit of the reserves produced no surprises, and generally confirmed the company’s own assessment.

According to Aramco’s own estimates, the Saudi oil giant has 261.1 billion barrels of crude oil and condensate reserves. According to the BP Statistical Review of World Energy, Saudi Arabia’s total proved reserves were 266.6 billion barrels at the end of 2015. Related: Robots Over Roughnecks: Next Drilling Boom Might Not Add Many Jobs

“Aramco’s reserves have always been reported internally in line with international practice,” a source familiar with the issue told Reuters.

According to two more sources, the audit has found that the reserves were “definitely not below” Aramco’s own estimates.

In view of next year’s share listing, Saudi Aramco is required to provide independent audit of its reserves. Significantly higher or lower reserves would greatly change the evaluation of the company, which Saudi officials say is worth around US$2 trillion.

Ahead of its planned IPO, Saudi Aramco is also on the hunt for advisers and was said to have recently sent requests for proposals to several investment banks that could become advisers in the process.

By Tsvetana Paraskova for Oilprice.com

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Leave a comment
  • Mike on January 27 2017 said:
    They pump average of 10.5 million barrels/day. That equal to 10.5*365=3832 billion barrel. Roughly 4 billion every year. They been in production since last 40-50 years that's about 160-200 billion. On top of it they have 261 billion. There is no data on depletion. There must be something fishy or phenomenal.
  • M on January 27 2017 said:
    If their reserves are right, their current R/p is about 70 years....

    If that's the case, why have they been trying so hard for many years to pump 12 MMBOPD ... should be simple.

    Likewise, why develop the high-cost offshore fields...

    It will be interesting to see what DeGolyer & MacNaughton sign off on....hopefully the report will be made public.
  • Frank Blangeard on January 28 2017 said:
    The world uses about 34 billion barrels each year. So all of Saudi oil would last the earth just 8 years at that rate of consumption.
  • R. L. Hails Sr. P. E. (ret.) on January 29 2017 said:
    There are two concepts not developed here(and maybe more). In rough numbers, only about 20% of the good stuff down there, comes to the surface is shipped, refined and fills your gas tank. There are reserves and commercially recoverable reserves. There is a lot more recoverable reserves at $150/b than at $15/b. The 20% also changes with technology. Fracking changed the world; you can now get more today for one drilling dollar. But if you are greedy, like Venezuela, and want all the profit, your people can starve as they literally eat grass, while crawling over trillions of dollars in recoverable reserves.

    IF the report is true, Saudi Arabia has centuries of oil, a lot of which is accessible. The US also has vast unscoped reserves. Thus those who spout peak oil are either dumb or liars. The root question is how much will a free market define as the price. There are many vested interests who wish to control this. The DoE boss liked $10 - $20/ gallon gasoline; he believed in climate change - carbon combustion, "Regulate it, price it, out of existence." I remember 25 cents per gallon (I was poor and thus could ride but not today's poor man.)

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