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Ross PetroleumJune 2004
SPE/WPC/AAPG Petroleum Resource Classification
UNSD/ESCWA/OPECSeminar on the UNFC
Presented by Dr. Jim RossBeirut, June 2004
Ross PetroleumJune 2004
SPE/WPC/AAPG Petroleum Resource Classification System
Society of Petroleum Engineers (SPE)– Oil and Gas Reserves Committee
World Petroleum Congresses (WPC)American Association of Petroleum Geologists (AAPG)
Ross PetroleumJune 2004
Outline
Brief history of petroleum resource classification systemsSPE/WPC/AAPG petroleum resource classification systemExternal petroleum reserve reporting by public companiesIncorporation into UNFCConclusions
Ross PetroleumJune 2004
Petroleum Resource Classification Systems
Former Soviet Union system – 1920sSPE definition of proved reserves – 1965McKelvey Box – 1972SPE definitions for probable and possible reserves – 1987WPC resource system and definitions – 1987SPE/WPC reserve definitions – 1997SPE/WPC/AAPG resource definitions and classification system – 2000
Ross PetroleumJune 2004
Outline
Brief history of petroleum resource classification systemsSPE/WPC/AAPG petroleum resource classification systemExternal petroleum reserve reporting by public companiesIncorporation into UNFCConclusions
Ross PetroleumJune 2004
McKelvey BoxResource Classification System
DISCOVERED UNDISCOVERED
CO
MM
ERC
IAL
SUB
-CO
MM
ERC
IAL
RESERVES
RESOURCES
Ross PetroleumJune 2004
McKelvey Box – incorrect use
DISCOVERED UNDISCOVERED
CO
MM
ERC
IAL
SUB
-CO
MM
ERC
IAL
ProvedReserves
PROSPECTIVERESOURCES
ProbableReserves
PossibleReserves
Ross PetroleumJune 2004
McKelvey BoxSPE/WPC/AAPG Terminology
DISCOVERED UNDISCOVERED
CO
MM
ERC
IAL
SUB
-CO
MM
ERC
IAL
RESERVES
PROSPECTIVERESOURCES
CONTINGENTRESOURCES
Ross PetroleumJune 2004
A Consistent Approach to the Assessment of all Assets
PROJECT MATURITY ……– Will the project go ahead?
UNCERTAINTY ……– What is the range of the estimated recoverable
volumes if the project does go ahead?
Ross PetroleumJune 2004
Norwegian Petroleum DirectorateResource Classification System
UNDISCOVEREDRESOURCES Prospects Leads and unmapped
resources
CONTINGENTRESOURCES
New discoveries that have not been
evaluated
Developmentnot very
likely
Recovery likely, but
not clarified
In theplanning
phase
Possible futuremeasures to
improve the recovery factor
Inproduction
RESERVES
Licensees have
decided to recover
Approveddevelopment
and operation
plan
Sold and delivered petroleum
Historical Production
Ross PetroleumJune 2004
SPE/WPC/AAPGResource Classification System
DISCOVEREDCOMMERCIAL
DISCOVEREDSUB-COMMERCIAL
UNDISCOVERED
Production
Range of Uncertainty
ProvedProved +Probable
Proved +Probable +Possible
Low
Low
Best High
Best High
RESERVES
CONTINGENTRESOURCES
PROSPECTIVERESOURCES
Unrecoverable
Unrecoverable
Ross PetroleumJune 2004
SPE/WPC/AAPGResource Classification System
PROJECT STATUSOn Production
Under Development
Planned for Development
Development PendingDevelopment on Hold
Development not Viable
Prospect
Lead
Play
ProjectMaturity
HigherRisk
LowerRisk
DISCOVEREDCOMMERCIAL
DISCOVEREDSUB-COMMERCIAL
UNDISCOVERED
Production
Range of Uncertainty
RESERVES
CONTINGENTRESOURCES
Unrecoverable
Unrecoverable
1P 2P 3P
Low
Low
Best High
Best High
PROSPECTIVERESOURCES
Ross PetroleumJune 2004
Outline
Brief history of petroleum resource classification systemsSPE/WPC/AAPG petroleum resource classification systemExternal petroleum reserve reporting by public companiesIncorporation into UNFCConclusions
Ross PetroleumJune 2004
External petroleum reserve reporting by public companies
SPE/WPC/AAPG system is now widely accepted by industry, but …– Most public oil and gas companies are listed on
New York stock exchange– Must report Proved reserves in accordance with
Securities and Exchange Commission (SEC) regulations
Ross PetroleumJune 2004
External petroleum reserve reporting by public companies
SEC definition of proved reserves– Designed to be conservative and also to provide a
consistent basis for comparison– Proved reserves only– Reasonable certainty of production– Existing economic and operating conditions– Limitations for proved undeveloped reserves– Limitations for secondary recovery methods
Ross PetroleumJune 2004
Outline
Brief history of petroleum resource classification systemsSPE/WPC/AAPG petroleum resource classification systemExternal petroleum reserve reporting by public companiesIncorporation into UNFCConclusions
Ross PetroleumJune 2004
United Nations Framework Classification (UNFC)
UNITED NATIONS
ofUNITED NATIONS INTERNATIONAL FRAMEWORKCLASSIFICATION FOR RESERVES/RESOURCES
- Solid Fuels and Mineral Commodities -
Economic
Axis E
ECONOMICE 1
E 2
POTENTIALLY
ECONOMIC
E 3
INTRINSICALLY
ECONOMIC
F 3
F 1
FEASIBILITY STUDY/
MINING REPORTF 2
PREFEASIBILITY STUDY
GEOLOGICAL STUDYG 1
RECONNAISSANCE
G 4
G 2
G 3 PROSPECTINGGENERALEXPLORATION
DETAILED
EXPLORATION
Feasibility
Axis F
Geologica
l
AxisG
111
121
122
222
331
332
333334
PUBLICATION IN:ENGLISH
FRANÇAISРУССКИЙ
Ross PetroleumJune 2004
UNFC – expanded along F-axis
Legend
Commercial productions
Non-commercial productions
In use for one or more commodity
Not reserves
Not in use
Remaining in place
Original slide provided by Sigurd Heiberg
G1G2
G3G4
E1E2E3
Ross PetroleumJune 2004
Outline
Brief history of petroleum resource classification systemsSPE/WPC/AAPG petroleum resource classification systemExternal petroleum reserve reporting by public companiesIncorporation into UNFCConclusions
Ross PetroleumJune 2004
Conclusions
SPE/WPC/AAPG have developed a system that is being adopted by many oil and gas companies and organisations around the worldThe UNFC offers an excellent opportunity to provide a direct and clear link with other systemsHarmonization will provide the basis for internationally-consistent reporting of all energy and mineral resources