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wcaseym (83.94)

That's how it goes, everbody knows!

Recs

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June 01, 2009 – Comments (2)

 Oil companies like to use models to estimate their reserves and the potential of unexplored fields. Exxon Mobil Corp., the world's largest oil company ... tells us the following on page 8 of its 2007 annual report: "Using proprietary technologies and tools, including advanced reservoir prediction models and geological data visualization, we have significantly improved our ability to identify, model, and understand oil and gas reservoirs."

Hypocritical modelers
http://www.energybulletin.net/node/49078

C.

2 Comments – Post Your Own

#1) On June 01, 2009 at 8:07 PM, devoish (98.76) wrote:

Good reminder. One rec from me.

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#2) On June 01, 2009 at 9:44 PM, Donnernv (< 20) wrote:

A couple other inputs.  In a great sense, the estimates of their own reserves are irrelevant.  In excess of 70% of the world's oil reserves are in the hands of government bodies (e.g., Venezuela, Saudi Arabia, Russia, Nigeria, et al).

The oil majors will soon be reduced to that of processors of oil they will buy from the world's market, at world competitive prices.  Their profits will come from the spread between the price they will pay for crude, which they will not control, and what they can sell the refined products for.

Not a bad business, but the notion of pump for $10/barrel and sell for $100 is over.  Likely they will generate a lot of cash for which there is no profitable investment alternative.  Think high dividends and stock buybacks.

Second, I'm a part-way believer, but climate change is much, much harder to model and predict than crude reserves.  When we try to overlay recent (40 year) observations onto enormous historical temperature swings (1 million years), the conclusions have to be taken with a grain of salt.

Peak oil is certain; global warming...I'm not so sure.

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