Strictly: Drilling and oil-field services Message Board

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Gold/Mining/Energy : Strictly: Drilling and oil-field services

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To: shust who wrote (31269)	10/29/1998 5:49:00 PM
From: dfloydr	Read Replies (1) of 95453

Besides the hurricane we also have potential problems: - unrest in Nigeria, - Savimbi is threatening to attack US oil interests in Angola - Pakistani Muslins are stirrring up trouble along the flanks of Iran and the Gulf - some exec in Venezuela warned last night that he had been alerted to expect a coup there. One or more of the above events could take away a few barrels per day of production. Yes there has been quite a lot of discussion about the OPEC reserves. As was explained to me, any engineering done on an oil field to determine reserves will give you a range of estimates for your field: 10% chance you have 1,000 bbls 20% ... 30% chance you have 900 bbls 40% ... 50% chance you have 700 bbls 60% ... 70% ... 80% ... 90% ... 100% chance you have 150 bbls. Obviously if I am allowed to produce 2% or 3% or whatever the OPEC agreement allows, and if I need revenues to meet my grand plans, I state my reserves per the 30% level, not the 100% level and then produce accordingly. That OPEC is doing this seems to be widely understood in the oil industry.

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