Naval Petroleum Reserves-1:

Data Corrections Made but More Accurate Reserve Data Needed

RCED-88-174: Published: Jun 28, 1988. Publicly Released: Jun 28, 1988.

Additional Materials:

Contact:

Victor S. Rezendes
(202) 512-6082
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO reviewed the Department of Energy's (DOE) actions to correct Naval Petroleum Reserve No. 1 (NPR-1) production data inaccuracies which GAO believed: (1) resulted from a lack of effective internal controls; (2) caused incorrect computation of NPR-1 maximum efficient production rates; and (3) could result in the government's not receiving its entire share of remaining recoverable reserves if NPR-1 were sold.

GAO found that DOE promptly initiated actions to correct data inaccuracy problems, including: (1) rewriting computer programs; (2) conducting tests of corrected data to validate the production accounting system's accuracy; (3) developing new allocation factors for the production accounting system; (4) establishing standards for developing new allocation factors; and (5) validating all historical monthly production data. GAO also found that DOE: (1) will take almost a year to complete all corrective actions and will require additional time to measure the effectiveness of its newly implemented internal controls; (2) did not detect certain errors in allocation factors that had cleared its review process; and (3) has not exercised a study contract option that would provide it with the specific geological data it needs to protect the government's interests if it should choose to sell or manage the reserve.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: DOE exercised option IVa of the contract so that additional geological and engineering data about the reserves could be obtained. However, DOE let the contract expire without exercising the phase IVb option.

    Recommendation: The Secretary of Energy should authorize the Director, Office of Naval Petroleum and Oil Shale Reserves, to exercise the government's option for phase IVb under the current contract to obtain more detailed geologic and engineering data needed to accurately determine the ownership of oil produced to date.

    Agency Affected: Department of Energy

 

Explore the full database of GAO's Open Recommendations »

Nov 14, 2014

Nov 12, 2014

Oct 30, 2014

Oct 20, 2014

Oct 1, 2014

Sep 22, 2014

Sep 10, 2014

Aug 11, 2014

Jul 17, 2014

Looking for more? Browse all our products here