Yay! Oil For Everybody!

The SEC may be thinking about changing the way reserves are booked ($), according to the Wall Street Journal. Given the Bush Administration's proclivities, I have to wonder what kind of shenanigans are about to go on.

Updated SEC standards could mean that billions of barrels of oil and trillions of cubic feet of natural gas may finally make it onto balance sheets, sparking a revaluation of the sector.

Despite several major reviews and updated industry guidelines approved by the international Society of Petroleum Engineers, the World Petroleum Council and the American Association of Petroleum Geologists, the SEC has maintained the same reserve booking standards since the late 1970s.

But after nearly a decade of lobbying the SEC to modernize, to little avail, the industry may be beginning to see some changes, though insiders say a complete renovation of the rules may be too much to hope for yet.

One indication the Commission may be starting to budge from its hard and fast stance on rules is a recently posted notice on its Web site for applicants for a new, 12- to 18-month "Academic Petroleum Engineering Fellowship." Applying engineers must have "significant experience in petroleum reservoir engineering with expertise in petroleum reserve estimation" and "be familiar with modern analytical reservoir assessment methods."

One wonders whether this is a reaction to the Iraq war by pragmatists buried deep in the government; that oil isn't going to see daylight for a long, long time, and the war is lost, whether or not the lunatics in the White House want to admit it or not. Best to pull the wool over the shareholders' eyes one last time, maybe. Perhaps I'm being too cynical, especially without reading the proposed changes (which haven't even been made yet — all this reports is a "help wanted" ad attached to speculation). But a happy ending doesn't seem likely.