Naval Petroleum Reserve No. 1:

Work Still Needed to Improve Accuracy of Reserve Estimates

RCED-90-16: Published: Dec 13, 1989. Publicly Released: Feb 1, 1990.

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Pursuant to a congressional request, GAO reviewed a Department of Energy (DOE) contractor's reserve data revisions for Naval Petroleum Reserve Number 1, an oil field jointly owned by the federal government and an oil company.

GAO found that: (1) the revised data was inaccurate and outdated because the contractor was unable to conduct technical field analyses within the contract period; (2) the contractor used inadequately detailed and inaccurate geological maps; (3) the contractor could not accurately estimate the extent of fluid migration between oil pools; (4) the contractor outlined 33 additional studies that were needed and DOE initiated work on 11 of those studies; (5) DOE and the oil company were planning further exploratory drilling and conducting experiments to develop additional recovery techniques; (6) DOE had not obtained data required for reevaluation of ownership shares; and (7) the contractor's economic development and production plan estimates were questionable, because they depended on certain assumptions regarding future operations.

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