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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: koan who wrote (78813)5/7/2008 1:58:38 AM
From: Elroy Jetson  Read Replies (3) of 116555
 
A college teaching students that oil companies overstate their oil reserves is pretty laughable.

The truth is oil companies are greatly motivated to understate their reserves for a number of reasons. This in turn under-counts the size of new discoveries.

On the other hand, some oil producing nations are motivated to overestimate their remaining reserves for political reasons.

For different political reasons Russia underestimates their reserves and the potential of producing their reserves. There's a large difference in the rate at which these reserves could have been produced under major oil company management and the new domestic management.

Hugo Chavez is running into this problem, but he still finds it advantageous to over-estimate, particularly in terms of quality of reserves.
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