The world may have more oil than previously believed

June 12th, 2008 - 1:34 pm ICT by ANI  

London, June 12 (ANI): In a surprising revelation, experts have determined that due to flawed statistical calculations, the amount of available oil in known reserves has been significantly underestimated.

According to a report in New Scientist, Richard Pike, a former oil-industry adviser and chief executive of the UK Royal Society of Chemistry, has made this statement.

Oil companies produce a bell-shaped probability distribution for how much each oil reservoir might hold, and then quote as an indicator of the reservoirs capacity a figure they are 90 per cent certain they can exceed.

When publishing a result for multiple reservoirs, they simply add up the figures for each one. And this is where the problem lies.

They should be combining the bell curves for each reservoir, said Pike.

Adding the numbers for each reservoir ignores statistical information about the extremes of the distribution, giving a result that underestimates the true total figure for all the reservoirs.

There are 1200 billion barrels still to be extracted, according to published estimates, but Pike determined that there could in fact be twice as much.

The figures are almost meaningless and just provide a conservative estimate for shareholders, he said.

According to Pike, most oil companies do calculate statistically accurate estimates of the combined capacity of their oil reserves, but no one can access this information to work out how much oil there really is in total.

All companies keep their internal probabilistic estimates quiet, he said. (ANI)

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