KUWAIT CITY, July 12 (Xinhua) -- Kuwait's Acting Oil Minister Mohammad Al-Olaim has reaffirmed the oil reserves at 100 billion barrels under the pressure from the members of parliament.

    Some lawmakers had threatened not to pass this year's budget, which is with a projected deficit of around 10.3 billion U.S. dollars, if the oil sector didn't tell them the truth about the country's oil reserves.

    This budget, one of the largest in Kuwait's history, is heavily reliant on oil income.

    So the parliament held a part of session behind closed doors to discuss Kuwait's oil reserves before disclosing it to the public. "We are reaffirming the declared oil reserves," the acting minister told reporters on Wednesday, raising speculation why Kuwait is so reluctant to make public its oil reserves?

    Official Kuwait oil sector statistics placed the country's oil reserves at some 100 billion barrels, accounting for 10 percent of the world's total reserves. The country is pumping around 2.4 million barrels per day (bpd) and oil income contributes more than 95 percent of public revenues.

    Asked whether the 100 billion barrels represented exploited and unexploited reserves, Al-Olaim, also Minister of Electricity and Water, said, "What is invested at present is not part of oil reserves ... there is no doubt that Kuwait has not exploited its oil reserves."

    But industry newsletter Petroleum Intelligence Weekly last year said it has seen Kuwait's internal records showing reserves were about 48 billion barrels - half the officially stated 99 billion. Former Oil Minister Sheikh Ali al-Jarrah al-Sabah, who resigned in late June, refused to disclose reserves during his tenure saying this is related to the country's security.

    Kuwait's analyst Jamie Etheridge said in an article published here that there's sound logic in keeping the real figure secret. First of all, within the energy industry there is a significant difference between proven, probable and possible reserves.

    Generally, proven suggests about a 90 percent chance - all conditions being favorable - of the oil actually being pumped up from underground and sold on the market. Probable suggests a 50 percent chance and possible about a 10 percent chance.

    He added that Kuwait's proven reserves may represent only a fraction of the larger whole.

    While banks and international stock markets will accept only "proven" reserves as assets, a nation or an energy company will develop its long term strategic plans based not only on what's proven but also what's probable and even possible.

    In other words, Kuwait can raise funds by borrowing against proven reserves, if need be, from an international bank.

    But Kuwait's Energy Ministry, Supreme Petroleum Council and Kuwait Petroleum Corporation will plan for the country's energy future by taking into account not just proven but also probable and possible reserves.

    Another reason for Kuwait to keep silence on its oil reserve is the OPEC quota system, according to Etheridge.

    In 1985, OPEC decided to tie production quotas to proven reserves.

    Under its agreement with other OPEC producers, Kuwait has the right to produce nearly 2 million barrels per day. Its quota is based on Kuwait's official statement that it has 99 billion barrels of proven oil reserves.

    Since quotas are calculated based on proven reserves, there is considerable doubt about the veracity of each OPEC nation's stated proven reserves, Etheridge said.

    In 1984, the year before the quota system was introduced, Kuwait announced proven oil reserves of 63.9 billion barrels. A year later, when the quota system came in, Kuwait's stated proven reserves jumped to 90 billion -- an incredible leap of 26.1 billion in the space of one year.

    Other OPEC producers also saw suspicious jumps in proven oil reserves. Iraq went from 47 billion barrels in 1987 to 100 billion barrels in proven reserves a year later. The same year, Iran doubled its reserves from 49 billion barrels to 93 billion.

    Kuwait hopes to raise its production to 4 million barrels per day by 2020. To do so, it needs to increase its OPEC quotas which are tied to proven reserves.