Reserves - Estimate of World Oil Reserves

As pointed out in previous studies, estimates of petroleum reserves if they are to be of value must not only presuppose a clear understanding of what is actually meant by reserves but must be subject to constant revision to conform with changes in their component factors. When such estimates are analyzed it must be clear that it is virtually impossible to obtain comparable figures reflecting the same degree of accuracy, to represent the reserves not only in various countries, but at times even of different fields in the same country. Estimates of reserves in the United States, subject to frequent independent checks, are obviously more reliable than those furnished, for instance, by the Soviet Government, as the latter must be accepted at their face value and are open to the suspicion of being made to conform with predetermined programs of propaganda. Any tabulation of the reserves of all producing countries, therefore, gives a total that is misleading, as the component items arc not arrived at on the same basis and therefore are not homogeneous in a true sense. Only a fraction of the petroleum stored underground, usually associated with natural gas, is or can be brought to the surface, and although practically all the natural gas underground can be rccovered, in actual practice in some fields a large part of the gas that reaches the mouth of the well is wasted. It is thus estimated that in the United States only some 25 to 35 per cent of the petroleum underground in proven fields is actually economically recovered. Estimates of reserves, therefore, should make clear the distinction between the known amount of oil underground in producing fields and the portion that actually can be brought to the surface. It cannot be overemphasized that as a result of the operation of the "Law of Capture," which controls subsoil ownership in the United States on comparatively small landholdings that seldom if ever cover the entire producing area, the oil fields are not as economically exploited as some forrign fields, and that as a result (were it not for the easy accessibility of the domestic market, the largest in the world) some American production would now be unprofitable in open competition with foreign oils.