Reserves Reporting and the Market Value of Oil Companies: A Comparative Study

The oil producing country needs a real view of its oil reserves and the forecasts of production, to cover its annual expenditures. The most influence is on their market value which mostly depends on their reserves. Oil companies can build better investment portfolios or divest in particular fields. Finally, the investors and global bankers seek to use better data for comparing investment opportunities and financing projects. The geologists and petro-physicists experts estimate “oil-in-place” with 10% error in their formulas. Reservoir engineers use hydrocarbon features to estimate the “reservoir” or “recoverable oil” volumes. These estimates can be influenced by improper explanation of seismic, inadequate sampling for depth estimates, quality and recovery factor to create uncertainties. These figures may change the value of resource by inflation, market prices and financial regimes. The most uncertainties are in exploration stage. The regular and accurate reserves reporting of the world energy reserves, can guarantee “the supply security”. This paper examines the reports on reserves and the history of reports and investigates the data on reserves according to Society of Petroleum Engineers World Petroleum Council Geologist American Association of Petroleum (SPE/WPC/GAAP) and United Nations (UN) standards. At the end, necessary actions taken to improve the estimates of oil reservoirs.