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But the largest additions to reserves weren’t via new discoveries at all. The largest reserves additions have been a result of rising oil prices, and this is a source of frequent misunderstanding on the topic on reserves.

An oil resource describes the total amount of oil in place, most of which typically can’t be technically or economically recovered. For example, it is estimated that the Bakken Shale centered under North Dakota may contain several hundred billion barrels of oil (the resource). However, what is technically and economically recoverable in the Bakken may be less than 10 billion barrels.

The portion that is technically AND economically recoverable is the proved reserve. Because of the requirement that the oil be economically recoverable, proved reserves are a function of oil prices and available technology.

Thus, as oil prices rise, oil resources that may have been discovered decades ago can be shifted into the category of proved reserves. Venezuela provides a perfect case study of this phenomenon. Venezuela has an enormous heavy oil resource in the Orinoco region of the country. But this oil is very expensive to extract. In 2003, Venezuela’s proved oil reserves were only 77 billion barrels. At that time Saudi Arabia’s reserves were tops in the world at 263 billion barrels.

After the past decade saw oil prices rise to above $100/barrel, more of Venezuela’s heavy oil resource became economic to produce. Thus, by 2013 Venezuela’s proved reserves were estimated to be tops in the world — 289 billion barrels. Saudi Arabia has now slipped to second with 266 billion barrels.

But that economic argument cuts both ways. Oil and gas resources that became proved reserves as prices rose will be declassified as proved reserves should lower prices render them uneconomical to produce. This is often the reason that companies have to write down proved reserves. It’s not that a company believed there was oil or gas and found out later that there wasn’t (although that of course also happens), it’s generally because a period of depressed prices has rendered those proved reserves to be no longer economical. See the dip in gas reserves in 2012?

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ORIGINAL: Soar_Slitherine

It might not be worth it to upgrade mining assets if you have easy access to those resources relative to economic needs. On the map I'm currently playing, metal is a huge bottleneck in my (and the other majors') economy. On turn 34 nobody has managed to develop a metal deposit yet and the market price has gone up to 5 credits per unit. I'm going to have to upgrade the 3 recycling assets I've been able to secure in order to ramp up my economy at a reasonable pace, and if I can't find any metal deposits before the scrap runs out, I'll transition to using soil demetalization plants. If it remains this scarce, staying ahead in the amount resourced will be a huge military and economic advantage, and if I happen to not find a metal deposit and somebody else does, I'll need all the head-start I can get.

(I am not against allowing more developed assets to access larger, deeper reserves, though, that seems to make perfect sense.)

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ORIGINAL: GodwinW

It's not a bad idea really. Though sometimes booming fast is the only way to win a war of course. But the idea to me seems worth considering (as long as the deeper levels also increase the speed of extraction).