Subject: File No. s7-29-07
Affiliation: Senior Associate Infosys consulting

February 3, 2008

Comments on Concept Release: Concept Release on Possible Revisions to the Disclosure Requirements Relating to Oil and Gas Reserves

Why SEC should recognize Probable reserve?
Investor wants to see the future growth prospects and prospects are always probable.
Probable reserve has the potential of future growth then why to deprive our investors of this information?
Moreover all the major fields are plateuing or declining, operating costs are climbing,reserve replacement ratio in general is declining in long term.Exploration needs encouragement, high risk has to be the nature of the efforts if efforts have to be aggressive.
Investors need to be educated about the 50%, 10% probability and overall risk profile.A disclosure including all positive and negative factors relevant to the estimate can be made mandatory. Accountability for the same is already ensured by present laws.

Is SEC too much American?
As per SEC oil and gas producing activity do not include:
Extraction of hydrocarbon from shale, tar sands or coal.
While as per Canadian oil and gas hand book / NI 51-101:
Oil and gas producing activity includes:
The extraction of hydrocarbon from oil sands, shale, coal, or other nonconventional sources and.
What definition would SEC adopt if USA has the oil sand resource as big as Canada has?

SEC and new wave of nationalizing the oil assets of MNCs:
Do investors have a right to know that how much reserves are in politically unstable countries? Can reserves be categorized like that? Can it be made mandatory by SEC?

How flexible SEC can be?
Can there be any room for major revision like a gas reservoir now proven as gas cap gas of oil reservoir after drilling an oil well beyond LKH.
How many sands are of unusual high R/P in a particular Asset? It is because of bad booking or poor production infrastructure?
If it is due to bad booking then how to delete that reserve without creating an uproar in investor community?Can it be done in steps?
Any provision to improve upon mistakes committed by predecessors?

Show the path to make internal control more effective:
Internal control over preparation of reserve estimates: Individuals gain Vs accountability to shareholders. Sarbanes Oxley Act of 2002 fixes the responsibility and accountability and as a result company wills asses the effectiveness of internal control they are implementing.
SEC can go a step further and tell them in specific terms how to make these controls more effective.
SEC can relegate part of its responsibility to independent auditors as well.

SEC has to evolve as dynamics of oil business has changed. Protection needed in eighties is no more relevant investors have matured and they know that fields have matured.
SEC has a wide experience of dealing with peculiar cases (Deep water Gulf of Mexico case) and has set the benchmark for the industry lessons learnt by other institutions will also be helpful.