However, I then did a sanity check that threw that calculation in doubt. I did the same calculation for U.S. proved reserves over the same time frame.
In 1982, U.S. proved crude oil reserves were reported to be 35 billion barrels. By 2005 — and before the shale oil boom was underway, U.S. proved reserves had only fallen to 30 billion barrels. But total U.S. production between 1982 and 2005 was 77 billion barrels.
If we extend that calculation through the end of 2017, U.S. proved reserves have actually jumped to 50 billion barrels (per the 2018 BP Statistical Review), and there have been 117 billion barrels of U.S. production since 1982.
To reiterate, in 1982 U.S. proved crude oil reserves stood at 35 billion barrels. Between then and 2017, the U.S. produced 117 billion barrels of oil, yet proved reserves grew to 50 billion barrels.
How did this happen? There were new discoveries, technological improvements that allowed more barrels to be extracted from existing fields, and higher prices that made additional resources economical to extract.
I think it’s reasonable to assume that Saudi Arabia also found additional barrels since 1982. They also have access to the same kinds of technology that improved recovery in U.S. fields. Therefore, I do not believe it’s a legitimate exercise to consider depletion from a historical reserves number to estimate current reserves. Such an exercise would have suggested that U.S. oil production would have fallen to zero by 1991.
Thus, I don’t find a reasonable basis for concluding that Saudi Arabia’s reserves are much lower than their official numbers. Their published reserves are consistent with the independent audit, and they are consistent with the experience in the U.S. of reserves growth despite significant oil production.
Lest you think that the U.S. results are atypical, you can repeat this exercise for any of the world’s major oil producers and find the same thing. Starting with the proved reserves in 1982 and subtracting the subsequent production will not accurately predict the reserves at some point in the future. In many cases — as with the U.S. — cumulative production was greater than the 1982 proved reserves number.
So, I have thus far found no good reason to doubt Saudi Arabia’s official numbers.