Hubbert Peak Graph showing that oil
production has peaked in non-OPEC and non-FSU countries
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 among oil fields. 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, water-flooding, or
microbial enhanced oil
recovery.
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 some national governments are
suspected of being manipulated for political reasons.
Classifications
Schematic graph illustrating petroleum
volumes and probabilities.
Curves represent categories of oil in assessment.
There is a 95% chance (i.e., probability, F95) of at least
volume V1 of economically recoverable oil, and there is a 5% chance
(F05) of at least volume V2 of economically recoverable oil.
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.
Proved reserves
Proved reserves are those reserves claimed to have
a
reasonable certainty (normally at least 90% confidence)
of being recoverable under existing economic and political
conditions, with existing technology. Industry specialists refer to
this as
P90 (i.e. having a 90% certainty of being
produced).
Proved reserves are also known in the industry
as
1P.
Proved reserves are further subdivided into
Proved
Developed (PD) and
Proved Undeveloped (PUD). PD
reserves are reserves that can be produced with existing wells and
perforations, or from additional reservoirs where minimal
additional investment (operating expense) is required. PUD reserves
require additional capital investment (e.g. drilling new wells) to
bring the oil to the surface.
Proved reserves are the only type the U.S.
Securities and Exchange
Commission allows oil companies to report to investors.
Companies listed on U.S. stock exchanges must substantiate their
claims, but many governments and national oil companies do not
disclose verifying data to support their claims.
Unproved reserves
Unproved reserves are based on geological and/or engineering data
similar to that used in estimates of proved reserves, but
technical, contractual, or regulatory uncertainties preclude such
reserves being classified as proved. Unproved reserves may be used
internally by oil companies and government agencies for future
planning purposes, but are not routinely compiled. They are sub
classified as
probable and
possible
Probable reserves are attributed to known
accumulations, and claim a 50% confidence level of recovery.
Industry specialists refer to this as
P50 (i.e.
having a 50% certainty of being produced). Referred to in the
industry as
2P (proved plus probable).
Possible reserves are attributed to known
accumulations which have a less likely chance of being recovered
than probable reserves. This term is often used for reserves which
are claimed to have at least a 10% certainty of being produced
(
P10). Reasons for classifying reserves as
possible include varying interpretations of geology, reserves not
producible at commercial rates, uncertainty due to reserve infill
(seepage from adjacent areas), projected reserves based on future
recovery methods. Referred to in the industry as
3P (proved plus probable plus possible).
Strategic petroleum reserves
Many countries maintain government-controlled oil reserves for both
economic and national security reasons. According to the United
States
Energy
Information Administration, approximately of oil are held in
strategic reserves, of which 1.4 billion is government-controlled.
These reserves are generally not counted when computing a nations
oil reserves.
Resources
A more sophisticated system of evaluating petroleum accumulations
was adopted in 2007 by the Society of Petroleum Engineers (SPE),
World Petroleum Council (WPC),
American
Association of Petroleum Geologists (AAPG), and Society of
Petroleum Evaluation Engineers (SPEE). It incorporates the 1997
definitions for reserves, but adds categories for
contingent
resources and
prospective resources.
Contingent resources are those quantities of
petroleum estimated, as of a givendate, to be potentially
recoverable from
known accumulations, but the applied
project(s)are not yet considered mature enough for commercial
development due to one or morecontingencies. Contingent resources
may include, for example, projects for which thereare currently no
viable markets, or where commercial recovery is dependent
ontechnology under development, or where evaluation of the
accumulation is insufficient toclearly assess commerciality.
Prospective resources are those quantities of
petroleum estimated, as of a givendate, to be potentially
recoverable from
undiscovered accumulations by application
offuture development projects. Prospective resources have both an
associated chance ofdiscovery and a chance of development.
The
United States
Geological Survey uses the terms
technically and
economically recoverable resources when making its
petroleum resource assessments. Technically recoverable resources
represent that proportion of assessed in-place petroleum that may
be recoverable using current recovery technology, without regard to
cost. Economically recoverable resources are technically
recoverable petroleum for which the costs of discovery,
development, production, and transport, including a return to
capital, can be recovered at a given market price.
Unconventional resources exist in petroleum
accumulations that are pervasive throughout a large area. Examples
include
extra heavy oil,
natural bitumen, and
oil shale deposits. Unlike
Conventional
resources, in which the petroleum is recovered through
wellbores and typically requires minimal processing prior to sale,
unconventional resources require specialized extraction technology
to produce. For example, steam and/or solvents are used to mobilize
bitumen for in-situ recovery. Moreover, the extracted petroleum may
require significant processing prior to sale (e.g. bitumen
upgraders). The total amount of
unconventional oil resources in the world
considerably exceeds the amount of conventional oil reserves, but
are much more difficult and expensive to develop.
Estimation techniques
Example of a production decline curve
for an individual well
The amount of oil in a subsurface reservoir is called
oil in place (OIP). Only a fraction of
this oil can be recovered from a reservoir. This fraction is called
the
recovery
factor. The portion that can be recovered is considered to
be a reserve. The portion that is not recoverable is not included
unless and until methods are implemented to produce it.
There are a number of different methods of calculating oil
reserves. These methods can be grouped into three general
categories:
volumetric,
material
balance, and
production performance. Each
method has its advantages and drawbacks.
Volumetric method
Volumetric methods attempt to determine the amount of
oil-in-place by using the size of the reservoir as well as the
physical properties of its rocks and fluids. Then a recovery factor
is assumed, using assumptions from fields with similar
characteristics. OIP is multiplied by the recovery factor to arrive
at a reserve number. Current recovery factors for oil fields around
the world typically range between 10 and 60 percent; some are over
80 percent. The wide variance is due largely to the diversity of
fluid and reservoir characteristics for different deposits. The
method is most useful early in the life of the reservoir, before
significant production has occurred.
Materials balance method
The
materials balance method for an oil field uses an
equation that relates the volume of oil, water and gas that has
been produced from a reservoir, and the change in reservoir
pressure, to calculate the remaining oil. It assumes that as fluids
from the reservoir are produced, there will be a change in the
reservoir pressure that depends on the remaining volume of oil and
gas. The method requires extensive pressure-volume-temperature
analysis and an accurate pressure history of the field. It requires
some production to occur (typically 5% to 10% of ultimate
recovery), unless reliable pressure history can be used from a
field with similar rock and fluid characteristics.
Production decline curve method
The
decline curve method uses production data to fit a
decline curve and estimate future oil production. The three most
common forms of decline curves are exponential, hyperbolic, and
harmonic. It is assumed that the production will decline on a
reasonably smooth curve, and so allowances must be made for wells
shut in and production restrictions. The curve can be expressed
mathematically or plotted on a graph to estimate future production.
It has the advantage of (implicitly) including all reservoir
characteristics. It requires a sufficient history to establish a
statistically significant trend, ideally when production is not
curtailed by regulatory or other artificial conditions.
Reserves growth
Experience shows that initial estimates of the size of newly
discovered oil fields are usually too low. As years pass,
successive estimates of the ultimate recovery of fields tend to
increase. The term
reserve growth refers to the typical
increases in estimated ultimate recovery that occur as oil fields
are developed and produced.
Estimated reserves by country
Countries with largest oil
reserves
Most of the world's oil reserves are
in the Middle East.
OPEC countries
There are doubts about the reliability of official OPEC reserves
estimates, which are not provided with any form of audit or
verification that meet external reporting standards.
Since a system of country production quotas was introduced in the
1980s, partly based on reserves levels, there have been dramatic
increases in reported reserves among Opec producers. In 1983,
Kuwait increased its proven reserves from to . In 1985–86, the UAE
almost tripled its reserves from to . Saudi Arabia raised its
reported reserve number in 1988 by 50%. In 2001–02, Iran raised its
proven reserves by some 30% to , which advanced it to second place
in reserves and ahead of Iraq. Iran denied accusations of a
political motive behind the readjustment, attributing the increase
instead to a combination of new discoveries and improved recovery.
No details were offered of how any of the upgrades were arrived
at.
The following table illustrates these rises.
OPEC countries
oil reserves of OPEC 1980–2005
| Declared reserves of major Opec Producers
(billion of barrels) |
|
| BP Statistical Review - June 2009 |
| Year |
Iran |
Iraq |
Kuwait |
Saudi Arabia |
UAE |
Venezuela |
Libya |
Nigeria |
| 1980 |
58.3 |
30.0 |
67.9 |
168.0 |
30.4 |
19.5 |
20.3 |
16.7 |
|
| 1981 |
57.0 |
32.0 |
67.7 |
167.9 |
32.2 |
19.9 |
22.6 |
16.5 |
| 1982 |
56.1 |
59.0 |
67.2 |
165.5 |
32.4 |
24.9 |
22.2 |
16.8 |
|
| 1983 |
55.3 |
65.0 |
67.0 |
168.8 |
32.3 |
25.9 |
21.8 |
16.6 |
| 1984 |
58.9 |
65.0 |
92.7 |
171.7 |
32.5 |
28.0 |
21.4 |
16.7 |
|
| 1985 |
59.0 |
65.0 |
92.5 |
171.5 |
33.0 |
54.5 |
21.3 |
16.6 |
| 1986 |
92.9 |
72.0 |
94.5 |
169.7 |
97.2 |
55.5 |
22.8 |
16.1 |
|
| 1987 |
92.9 |
100.0 |
94.5 |
169.6 |
98.1 |
58.1 |
22.8 |
16.0 |
| 1988 |
92.9 |
100.0 |
94.5 |
255.0 |
98.1 |
58.5 |
22.8 |
16.0 |
|
| 1989 |
92.9 |
100.0 |
97.1 |
260.1 |
98.1 |
59.0 |
22.8 |
16.0 |
| 1990 |
92.9 |
100.0 |
97.0 |
260.3 |
98.1 |
60.1 |
22.8 |
17.1 |
|
| 1991 |
92.9 |
100.0 |
96.5 |
260.9 |
98.1 |
62.6 |
22.8 |
20.0 |
| 1992 |
92.9 |
100.0 |
96.5 |
261.2 |
98.1 |
63.3 |
22.8 |
21.0 |
|
| 1993 |
92.9 |
100.0 |
96.5 |
261.4 |
98.1 |
64.4 |
22.8 |
21.0 |
| 1994 |
94.3 |
100.0 |
96.5 |
261.4 |
98.1 |
64.9 |
22.8 |
21.0 |
|
| 1995 |
93.7 |
100.0 |
96.5 |
261.5 |
98.1 |
66.3 |
29.5 |
20.8 |
| 1996 |
92.6 |
112.0 |
96.5 |
261.4 |
97.8 |
72.7 |
29.5 |
20.8 |
|
| 1997 |
92.6 |
112.5 |
96.5 |
261.5 |
97.8 |
74.9 |
29.5 |
20.8 |
| 1998 |
93.7 |
112.5 |
96.5 |
261.5 |
97.8 |
76.1 |
29.5 |
22.5 |
|
| 1999 |
93.1 |
112.5 |
96.5 |
262.8 |
97.8 |
76.8 |
29.5 |
29.0 |
| 2000 |
99.5 |
112.5 |
96.5 |
262.8 |
97.8 |
76.8 |
36.0 |
29.0 |
|
| 2001 |
99.1 |
115.0 |
96.5 |
262.7 |
97.8 |
77.7 |
36.0 |
31.5 |
| 2002 |
130.7 |
115.0 |
96.5 |
262.8 |
97.8 |
77.3 |
36.0 |
34.3 |
|
| 2003 |
133.3 |
115.0 |
99.0 |
262.7 |
97.8 |
77.2 |
39.1 |
35.3 |
| 2004 |
132.7 |
115.0 |
101.5 |
264.3 |
97.8 |
79.7 |
39.1 |
35.9 |
|
| 2005 |
137.5 |
115.0 |
101.5 |
264.2 |
97.8 |
80.0 |
41.5 |
36.2 |
| 2006 |
138.4 |
115.0 |
101.5 |
264.3 |
97.8 |
87.3 |
41.5 |
36.2 |
|
| 2007 |
138.2 |
115.0 |
101.5 |
264.2 |
97.8 |
99.4 |
43.7 |
36.2 |
| 2008 |
137.6 |
115.0 |
101.5 |
264.1 |
97.8 |
99.4 |
43.7 |
36.2 |
|
The sudden revisions in OPEC reserves, totaling nearly 300 bn
barrels, have been much debated. Some of it is defended partly by
the shift in ownership of reserves away from international oil
companies, some of whom were obliged to report reserves under
conservative US Securities and Exchange Commission rules. The most
prominent explanation of the revisions is prompted by a change in
OPEC rules which set production quotas (partly) on reserves. In any
event, the revisions in official data had little to do with the
actual discovery of new reserves. Total reserves in many OPEC
countries hardly changed in the 1990s. Official reserves in Kuwait,
for example, were unchanged at (including its share of the Neutral
Zone) from 1991 to 2002, even though the country produced more than
and did not make any important new discoveries during that period.
The case of Saudi Arabia is also striking, with proven reserves
estimated at between 260 and in the past 18 years, a variation of
less than 2% while extracting approximately during this
period.
Sadad al-Huseini, former head of exploration and production at
Saudi Aramco, estimates of the world’s of proved reserves should be
recategorized as speculative resources, though he did not specify
which countries had inflated their reserves. Dr.
Ali Samsam Bakhtiari, a former senior
expert of the
National
Iranian Oil Company, has estimated that Iran, Iraq, Kuwait,
Saudi Arabia and the United Arab Emirates have overstated reserves
by a combined 320–390bn barrels, and "As for Iran, the usually
accepted official is almost one hundred billion over any realistic
assay".
Petroleum Intelligence Weekly reported that
official confidential Kuwaiti documents estimate reserves of Kuwait
were only , of which half were proven and half were possible. The
combined value of proven and possible is half of the official
public estimate of proven reserves.
Prospective resources
Arctic Prospective Resources
Location of Arctic Basins assessed by
the USGS
A 2008 United States Geological Survey estimates that areas north
of the Arctic Circle have of undiscovered, technically recoverable
oil (and of natural gas liquids ) in 25 geologically defined areas
thought to have potential for petroleum. This represented 13% of
the expected undiscovered oil in the world. Of the estimated
totals, more than half of the undiscovered oil resources were
estimated to occur in just three geologic provinces – Arctic
Alaska, the Amerasia Basin, and the East Greenland Rift Basins.
More than 70% of the mean undiscovered oil resources was estimated
to occur in five provinces: Arctic Alaska, Amerasia Basin, East
Greenland Rift Basins, East Barents Basins, and West Greenland–East
Canada. It was further estimated that approximately 84% of the oil
and gas would occur offshore. The USGS did not consider economic
factors such as the effects of permanent sea ice or oceanic water
depth in its assessment of undiscovered oil and gas resources. This
assessment was lower than a 2000 survey, which had included lands
south of the arctic circle.
Miscellaneous Prospective Resources
The Exclusive Economic Zone is a delineated offshore area, mostly
to the west and north of Cuba which under international agreements
is owned by Cuba. This 112,000 square kilometer zone has been
divided into 59 exploration blocks. A 2004 joint partnership
between a Spanish oil company and Cuba’s state oil company
(
CUPET) estimated Cuba's off-shore reserves to
be able to ultimately produce between 4.6 and 9.3billion barrels of
crude oil. The
US Geological
Survey (USGS) estimates that Cuba has resources up to of oil.
In October 2008, the Cuban government announced that it had
discovered oil basins which would double its total oil resources to
. Note that consistent with the definitions of Reserves and
Resources as given in the above sections, at this stage (June
2009), given no commercial discoveries to date, all recoverable oil
estimates in the Exclusive Economic Zone (EEZ) are Prospective
Resources estimates and not Reserves estimates.
See also
References
- >
- PennWell Corporation, Oil & Gas Journal, Vol. 105.48
(December 24, 2007), except United States. Oil includes crude oil
and condensate. Data for the United States are from the Energy
Information Administration, U.S. Crude Oil, Natural Gas, and
Natural Gas Liquids Reserves, 2006 Annual Report,
DOE/EIA-0216(2007) (November 2007). Oil & Gas Journal's oil
reserve estimate for Canada includes of conventional crude oil and
condensate reserves and of oil sands reserves. Information collated
by EIA
- U.S. Energy Information Administration (EIA) – U.S. Government
– U.S. Dept. of Energy, October, 2008 EIA - Petroleum Data, Reports, Analysis,
Surveys
- BBC: claims massive oil reserves
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