Is this a sweat shop?

It is the opposite way around: it is to their advantage to over-state reserves  because their share price is linked to the reserves they quote in their annual report. That is why there are regulations in the USA on what reserves companies can state are "proven" and why there was blood on the carpet when Shell restated its reserves downwards recently. Read the business press: you will find it enlightening.

The oil-price has little to do with long-term reserves: it is largely driven by short-term supply and demand and in particular by the level of stocks that exist in the system.

There are good reasons to think that oil is running out faster than was expected until recently. There have been no major new reserves discovered for many years now. We have been here before 25 years ago with the famous "Limits to Growth" book which suggested we'd run out of several key raw materials soon: it wasn't true then because companies didn't go looking for new reserves until they were needed, but it may be true now. Truth is: nobody knows.