Oil Reserves

Sunday, March 1, 2009

Classifications

Reserves are those quantities of petroleum claimed to be commercially recoverable by application of development projects to known accumulations under defined conditions. Reserves must satisfy four criteria: They must be:

discovered through one or more exploratory wells
recoverable using existing technology
commercially viable
remaining in the ground
All reserve estimates involve uncertainty, depending on the amount of reliable geologic and engineering data available and the interpretation of those data. The relative degree of uncertainty can be expressed by dividing reserves into two principal classifications - proved and unproved. Unproved reserves can further be divided into two subcategories - probable and possible to indicate the relative degree of uncertainty about their existence. The most commonly accepted definitions of these are based on those approved by the Society of Petroleum Engineers (SPE) and the World Petroleum Council (WPC) in 1997

Oil reserves

Oil reserves are the estimated quantities of crude oil that are claimed to be recoverable under existing economic and operating conditions.

The total estimated amount of oil in an oil reservoir, including both producible and non-producible oil, is called oil in place. However, because of reservoir characteristics and limitations in petroleum extraction technologies only a fraction of this oil can be brought to the surface, and it is only this producible fraction that is considered to be reserves. The ratio of producible oil reserves to total oil in place for a given field is often referred to as the recovery factor. Recovery factors vary greatly from oil field to oil field. The recovery factor of any particular field may change over time based on operating history and in response to changes in technology and economics. The recovery factor may also rise over time if additional investment is made in enhanced oil recovery techniques such as gas injection or water-flooding.

Because the geology of the subsurface cannot be examined directly, indirect techniques must be used to estimate the size and recoverability of the resource. While new technologies have increased the accuracy of these techniques, significant uncertainties still remain. In general, most early estimates of the reserves of an oil field are conservative and tend to grow with time. This phenomenon is called reserves growth.

Many oil producing nations do not reveal their reservoir engineering field data, and instead provide unaudited claims for their oil reserves. The numbers disclosed by national governments are also sometimes manipulated for political reasons