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HYDROCARBON RESOURCES

AND RESERVES

Hydrocarbon Resources
RESOURCES < RESERVES (certainty)
o
o

Contingent Resources (subject to chance)


Prospective Resources (expecting to be the specified thing in
the future)

A resource number may be assigned to an undrilled

prospect or an unappraised discovery.


Resource gets approved

Delineating well
Seismic survey

Leads to project sanction if commercially viable

amounts of hydrocarbon reservoir is found.

Why do we explore?
Peak power shortage already stands at approx. 12%
Over 300 million of the countrys population are

yet to receive their first electricity connection.


Demand expected to rise by 7-8% annually
Indian Energy Mix:

Demand for Hydrocarbon other than coal


Diminishing economic competitiveness of coal

Domestic coal production stagnant.


Imported coal $75-100 per tonne.
Domestic coal $15-35 per tonne.

Overall cost effectiveness

Advancement in technology makes coal obsolete.

Industrial application

NG is in demand from industries like petrochemical to


fertilizer

Low environmental impact

Assessing options for procurement


Indias domestic shale gas potential

Gas in place

Resources to Reserve

Shale resources

Hydrocarbon reserves
Worldwide : volumes that will be commercially recovered in the

future
National:
o
o
o

Proved "reasonable certainty" of being recovered.


Probable
Possible

Reserves must satisfy four criteria:

(a)Discovered,
(b) Recoverable,
(c)Commercial, and
(d)Remaining.

PROVED RESERVES

PROVED RESERVES ARE THE HIGHEST VALUED


CATEGORY. PROVED RESERVES HAVE A
"REASONABLE CERTAINTY" OF BEING RECOVERED,
WHICH MEANS A HIGH DEGREE OF CONFIDENCE
THAT THE VOLUMES WILL BE RECOVERED.

SOME INDUSTRY SPECIALISTS REFER TO THIS AS


P90, I.E., HAVING A 90% CERTAINTY OF BEING
PRODUCED.

THESE RESERVES ARE THOSE QUANTITIES OF OIL


AND GAS, WHICH, BY ANALYSIS OF GEOSCIENCE
AND ENGINEERING DATA, CAN BE ESTIMATED WITH
REASONABLE CERTAINTY TO BE ECONOMICALLY
PRODUCIBLE.

10

Proved Reserves can be subdivided into DEVELOPED &

UNDEVELOPED.
(a)DEVELOPED: Developed reserves are expected to be
recovered from existing wells including reserves behind pipe.
Improved recovery reserves are considered developed only after the
necessary equipment has been installed, or when the costs to do so are
relatively minor.
Developed reserves may be sub-categorized as PRODUCING or

NON-PRODUCING.
PRODUCING: Reserves subcategorized as producing are expected
to be recovered from completion intervals which are open and
producing at the time of the estimate. Improved recovery reserves are
considered producing only after the improved recovery project is in
operation.

NON-PRODUCING: Reserves include shut-in and behindpipe reserves. Shut-in reserves are expected to be recovered
from
(1) Completion intervals which are open at the time of the
estimate but which have not started producing,
(2) Wells which were shut-in for market conditions or pipeline
connections,
(3) Wells not capable of production for mechanical reasons.

UNDEVELOPED: Undeveloped reserves are expected to be


recovered:
(2) from new wells on undrilled acreage,
(2)from deepening existing wells to a different reservoir,
(3)where a relatively large expenditure is required to recomplete
an existing well.

PROBABLE RESERVES

PROBABLE RESERVES ARE VOLUMES DEFINED AS "LESS


LIKELY TO BE RECOVERED THAN PROVED, BUT MORE
CERTAIN TO BE RECOVERED THAN POSSIBLE RESERVES".
SOME INDUSTRY SPECIALISTS REFER TO THIS AS P50,
I.E., HAVING A 50% CERTAINTY OF BEING PRODUCED.

FOR EXAMPLE IF AN OIL COMPANY BELIEVES THAT


THERE IS DESCENT CHANCE OF A SUCCESSFUL DRILLING
OPERATION, THEY WOULD CLASSIFY THOSE RESERVES
AS "PROBABLE."

PROBABLE RESERVES VARY FROM POSSIBLE RESERVES,


WHICH ONLY HAVE A 10% CHANCE OF FULL
EXTRACTION.

Reserves in an area of the formation that appears to be


separated from the proved area by faulting and the geologic
interpretation indicates the subject area is structurally higher
than the proved area.
Reserves attributable to a future work over, treatment, retreatment, change of equipment, or other mechanical
procedures, where such procedure has not been proved
successful in wells which exhibit similar behavior in analogous
reservoirs.

POSSIBLE RESERVES

POSSIBLE RESERVES ARE RESERVES WHICH ANALYSIS OF


GEOLOGICAL AND ENGINEERING DATA SUGGESTS ARE
LESS LIKELY TO BE RECOVERABLE THAN PROBABLE
RESERVES. SOME INDUSTRY SPECIALISTS REFER TO THIS
AS P10, I.E., HAVING A 10% CERTAINTY OF BEING
PRODUCED.

RESERVES
IN
FORMATIONS
THAT
APPEAR
TO
BE
PETROLEUM BEARING BASED ON LOG AND CORE ANALYSIS
BUT MAY NOT BE PRODUCTIVE AT COMMERCIAL RATES.

THE TERM 1P IS FREQUENTLY USED TO DENOTE PROVED


RESERVES; 2P IS THE SUM OF PROVED AND PROBABLE
RESERVES; AND 3P THE SUM OF PROVED, PROBABLE, AND
POSSIBLE RESERVES.

Reasons for classifying reserves as possible include


varying interpretations of geology, reserved not
producible at commercial rates, uncertainty due to
reserve infill(seepage from adjacent areas)and
projected reserves based on future recovery methods..

THANK YOU