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U.S. Oil Reserves Jump in 2005

September 27, 2006|From Reuters

WASHINGTON — U.S. proved crude oil reserves last year rose for the first time in three years and natural gas reserves had their biggest annual increase since 1970, the government's top energy forecasting agency said Tuesday.

Crude oil reserves jumped 1.8% in 2005 from the year before to 21.76 billion barrels and natural gas reserves soared 6.2% to 204.4 trillion cubic feet, according to the federal Energy Information Administration.

Proved reserves are the estimated amount of supply that economically can be recovered using known drilling technology.

Higher prices for oil and natural gas typically boost the reserve figures for those commodities because previously unprofitable, uncounted deposits become economic to pursue. The agency did not break out how much of the increases in reserves could be attributed to higher prices.

Reserves of crude increased in two of the four largest U.S. oil-producing areas, Texas and California, but were lower in the Gulf of Mexico and Alaska.

"Several significant deepwater discoveries that have been made in recent years in the gulf are not yet booked as proved reserves," the agency said.

Not included in the energy agency's estimate of reserves is Chevron's successful drilling test this month at its Jack No. 2 well in the very deep Gulf of Mexico waters, which the company said could boost U.S. oil reserves by as much as 15 billion barrels.

Increases in onshore gas reserves in the lower 48 continental states, most notably Texas and Colorado, were large enough to offset a 10% drop in gas reserves from the Gulf of Mexico, the government said.

"The majority of natural gas reserves additions in 2005 were extensions of existing gas fields rather than new field or reservoir discoveries," the agency said.

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