“The piece by Mister Slugcatcher merely repeats the mistakes of other economists,” O’Connor told ERN in New Plymouth today, referring to Slugcatcher’s claim that a few critical numbers supported an argument for radically different petroleum policies.

“If you cannot prove it to the stock exchange you cannot book it. And you cannot book it unless those reserves can be accessed by a producing well. That is one reason why explorers are usually only cautiously optimistic.

“And I know everybody would rather report increased reserves at a later date than have to subsequently write them down; just ask Royal Dutch Shell that,” O’Connor said.

In June an internal Royal Dutch Shell audit committee reported that 4.85 billion barrels would be downgraded from its reserves estimates, an increase on the previous 4.14 billion barrels, which was an increase on the original 3.9 billion barrel downgrade. Former chairman Sir Philip Watts was removed last March.

Slugcatcher’s three “critical” numbers were the 1971 figure of 612 billion barrels of proven oil reserves; the 767 billion barrels of oil produced since 1971; and the 2004 figure of 1028 billion barrels.

O’Connor agreed with some of Slugcatcher’s claims. “Yes, exploration has been successful and some previously ‘uneconomic’ oil has been upgraded to ‘economic’.”

However, there was no “mismatch made to fit”. As fields matured, explorationists could have greater confidence that what were once regarded as P50 reserves could now be classified, wholly or in part, as P90.

“Middle East reserves have doubled since 1988, largely because of that shift. Nobody can say the world is running out of oil; it’s just that the world is running out of cheap oil.”