Prove it, or take it out

The furore surrounding Shell's reserves downgrade is not about whether or not the oil and gas exist in the reservoirs—they do —but whether or not the reserves should have been booked when they were. Exactly when, and what, reserves should be booked is a contentious subject, especially for companies operating under multiple jurisdictions and multiple definitions of what constitutes bookable reserves, writes Derek Bamber

THE SOCIETY OF Petroleum Engineers (SPE), in its petroleum reserves definitions, says: "Reserves derived under these definitions rely on the integrity, skill and judgement of the evaluator and are affected by the geological complexity, stage of development, degree of depletion of the reservoirs and amount of available data." So, estimating reserves is not an exact science. And when there is more than one set of definitions to work to, particularly in a rapidly changing economic and technical environment, there is ample opportunity for problems to occur. SPE definition The SPE definitions, drafted jointly with the World Petroleum Congress, state: "Reserves are those quantities of petroleum th