Saudi oil reserves could be 40% lower than estimated: US Embassy cable
09 Feb 2011, 2:45 PM
The Maldives’ economy could be crippled by rising oil prices sooner than expected, after a leaked cable from the US embassy in Riyadh sparked fears that Saudi Arabian oil reserves could be 40 percent lower than previous estimates.
In the cable dated November 2007, geologist and former head of exploration at Saudi Arabia’s state-owned oil giant Aramco told US consul general John Kincannon that the world’s largest oil company may have overstated its reserves by 300 billion barrels.
Saudi Arabia is believed to sit on almost a quarter of the world’s oil reserves, the export of which directly accounts for almost 50 percent of country’s GDP and indirectly for much of the rest of its industry.
In 2007, Aramco reported that it had 716 billion barrels of total reserves, 51 percent of which was recoverable. Within 20 years the company predicted it would have 900 million barrels, and a recovery rate of 70 percent.
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