Commentary: Oil: What's Russia Really Sitting On?

With oil still hovering near $50 a barrel, the last thing people want to hear is that there's even less of the stuff out there than previously thought. This year investors in the oil industry have been shaken by the revelation that Royal Dutch/Shell Group (RD ) overstated its proven reserves by at least 23%, some 4.5 billion barrels, with more possible downgrades to come. There's growing disquiet that other major oil companies may also have inflated reserves.

But there's one place -- Russia -- where reserve estimates just seem to go up and up. In its annual statistical survey of world energy, BP PLC (BP ) has recently revised its estimates of Russia's total proven oil reserves to 69.1 billion barrels, 6% of the world's total, up from 45 billion bbl. in 2001. But according to auditors with a worm's-eye view of what's actually going on in the depths of Siberia, such estimates may just scratch the surface of Russia's real potential. According to a recent study by Dallas-based energy reserve auditors DeGolyer & MacNaughton, whose clients include leading Russian energy companies such as Gazprom and Yukos, Russia's true recoverable reserves are between 150 billion bbl. and 200 billion bbl. That's up from industry estimates of 100 billion bbl. a few years ago.