Oil -2
Why such a big gap in the estimates? Because it's one thing to be sitting on oil reserves, another to be able to exploit them commercially. In Russia's main oil-producing region in western Siberia, proven reserves represent just 18% to 24% of all oil in the ground, in contrast to about 45% in Western oil-producing regions such as Alaska and the North Sea. But as Russian oil companies adopt technologies, such as horizontal wells and computerized reservoir management systems, the estimated recovery rates are being revised. Thanks to new techniques, which make it possible to obtain oil even from apparently depleted fields, Russian oil companies already have managed to boost their output by 50% since 1998. "The biggest thing is the [new] technology being deployed in western Siberia. The results are beginning to show," says Martin Wiewiorowski, senior vice-president of DeGolyer & MacNaughton in Moscow.

This increasing recoverability, and not dramatic new discoveries of oil, explains why Russia's proven reserves keep shooting up. The leading Russian oil companies have all announced big increases this year, following independent international audits. Lukoil (LUKOY ), Russia's largest oil outfit, saw a boost of 4.7% in proven reserves both this year and last, according to Society of Petroleum Engineers SPE standards. No. 2 producer Yukos, meanwhile, jumped 13.2% this year, according to stringent standards set by the U.S. Securities & Exchange Commission.


Why such a big gap in the estimates? Because it's one thing to be sitting on oil reserves, another to be able to exploit them commercially. In Russia's main oil-producing region in western Siberia, proven reserves represent just 18% to 24% of all oil in the ground, in contrast to about 45% in Western oil-producing regions such as Alaska and the North Sea. But as Russian oil companies adopt technologies, such as horizontal wells and computerized reservoir management systems, the estimated recovery rates are being revised. Thanks to new techniques, which make it possible to obtain oil even from apparently depleted fields, Russian oil companies already have managed to boost their output by 50% since 1998. "The biggest thing is the [new] technology being deployed in western Siberia. The results are beginning to show," says Martin Wiewiorowski, senior vice-president of DeGolyer & MacNaughton in Moscow.

This increasing recoverability, and not dramatic new discoveries of oil, explains why Russia's proven reserves keep shooting up. The leading Russian oil companies have all announced big increases this year, following independent international audits. Lukoil (LUKOY ), Russia's largest oil outfit, saw a boost of 4.7% in proven reserves both this year and last, according to Society of Petroleum Engineers SPE standards. No. 2 producer Yukos, meanwhile, jumped 13.2% this year, according to stringent standards set by the U.S. Securities & Exchange Commission.