1. RESOURCES AND RESERVES
© 2012 INSTITUTE OF TECHNOLOGY PETRONAS SDN BHD
All rights reserved. No part of this document may be reproduced, stored in a retrieval system or transmitted in any form or by any means (electronic,
mechanical, photocopying, recording or otherwise) without the permission of the copyright owner.

2. Presentation Contents
• Reservoir Engineering
– Primary functions
– Applications
• Resources
– Key Elements
– Discovered Vs. Undiscovered
• Reserves
– Classification
– Development and Production status
– Levels of uncertainty
– Estimation

3. Reservoir

4. RESERVOIR ROCK
• A substance body of rock having sufficient
porosity and permeability to store and transmit
fluids .

5. RESERVOIR ENGINEERING
• The phase of engineering which deals with the
transfer of fluids to, from or through the reservoirs
• It is located at the heart of many of the activities
acting as a central coordinating role.

6. THE PRIMARY FUNCTIONS OF A RESERVOIR
ENGINEER
The estimation of hydrocarbons in place
The calculation of a recovery factor
The attachment of a time scale to the
recovery

7. GOAL OF RESERVOIR ENGINEERING.
Set up development project
Optimize hydrocarbons
recovery
Study on production
forecasting

8. CALCULATION OF HYDROCARBON VOLUMES
• Initially filled with liquid oil.
• The oil volume in the reservoir (oil in place) is:
OIP = Vφ (1− Swc )(res.vol.)
• V = the net bulk volume of the reservoir rock
• φ = the porosity, or volume fraction of the rock which is porous
• Swc = the connate or irreducible water saturation and is expressed
as afraction of the pore volume.

9. THE STOCK TANK OIL INITIALLY IN PLACE
• To express oil volumes at stock tank (surface)
conditions:
STOIIP = n = Vφ (1− Swc ) /Boi
• Boi is the oil formation volume factor, reservoir barrels/stock
tank barrel (rb/stb).

10. RESERVOIR ENGINEERING APPLICATION
Determine HC
in place
• Volumetric
Method
• Material
balance
Determine
Reserves
• Primary
Recovery
Phase
• Supplemental
Recovery
Phase
Determine
Rates
• Number of
wells
• Well potential

11. RESERVOIR ENGINEERING APPLICATION
• Determine HC in
place
 Volumetric Method
 Area
 Thickness
 Porosity
 Saturation
 Material balance
 Production Data
 Fluid Properties
Fig(1) Anticline Petroleum Trap

12. RESERVOIR ENGINEERING APPLICATION
• Determine Reserves
 Primary Recovery
 Gas cap drive
 Water drive
 Gravity drainage
 Combination
 Supplementary Recovery
Phase
 Secondary Recovery
 EOR
• Determine Rates
 Number of wells
 Well potential
Fig (2) CO2 Injection

13. Resources

14. Total quantity of discovered and undiscovered
petroleum at a specific date in a given area.
GENERAL DEFINITION OF RESOURCES

15. Total Petroleum Initially In Place
(TPIIP Total Resources)
Undiscovered PIIP
Discovered
PIIP
Recoverable
• Production
• Reserves
• Contingent resources
Unrecoverable
Recoverable
• Prospective recourses
Unrecoverable
KEY ELEMENTS OF RESOURCES

16. • quantity of petroleum that is estimated to exist
originally in naturally occurring accumulations
• Discovered or yet to be discovered (equivalent to
“total resources”)
TOTAL PETROLEUM INITIALLY-IN-PLACE (TPIIP)

17. DISCOVERED (PIIP)
The total estimated in place quantities of petroleum at a
specific date to be contained in known accumulations,
plus those quantities already produced from there
UNDISCOVERED (PIIP)
Quantity of petroleum that is estimated, as of a given
date, to be contained in known accumulations yet to
be discovered
DISCOVERED VS UNDISCOVERED PIIP

18. DISCOVERED RESOURCES
PRODUCTION
Cumulative quantity of petroleum that has been recovered up to a
given date
RESERVES = ?
CONTINGENT RESOURCES
To be potentially recoverable from known accumulations, but the
applied projects are not yet considered mature enough for
commercial development due to one or more contingencies

19. UNDISCOVERED
PROSPECTIVE RESOURCES
Quantities of petroleum estimated, as of a given date, to be
potentially recoverable from undiscovered accumulations by
application of future development projects. Prospective
Resources have both an associated chance of discovery and a
chance of development.

20. Reserves

21. Reserves
Reserves
Classification
Proved
Reserves
Probable
Reserves
Possible
Reserves
Development and
production status
Developed
Reserves
Producing
Non-
producing
Undeveloped
Reserves
Levels of
uncertainty
General
Classification
Requirements
DEFINITION
OF RESERVESGENERAL OVERVIEW OF RESERVES

22. DEFINITION OF RESERVES
Quantities of
petroleum
Anticipated to be
COMMERCIALLY
RECOVERED
from KNOWN
ACCUMULATIONS
(already
discovered).
from a given date
forward (excluding
previously produced
amounts)

23. CONDITION FOR TO BE CALLED RESERVES
Oil and gas must be physically and
economically producible
Since reservoir is not produced and is
inaccessible, reserves cannot be
measured, they can only be estimated
Since reserves are remaining, there is a time
line associated with each reserve estimated

24. RESERVES ESTIMATION
• Analysis of drilling, geological, geophysical, and engineering
data
• The use of established technology
• Specified economic conditions, which are generally accepted
as being reasonable, and shall be disclosed

25. RESERVES CATEGORY
Reserves are classified according to the degree of certainty
associated with the estimates.
POSIBBLE
PROBABLE
PROVED

26. RESERVES CATEGORY
PROVED
RESERVES
• Reserves estimated with a high degree of certainty to be recoverable
• Likely situation : Actual remaining quantity > estimated proved results
PROBABLE
RESERVES
• Additional reserves that are less certain to be recovered than proved reserves
• sum of estimated proved + probable reserves<Actual remaining quantity<sum
of estimated proved + probable reserves
POSSIBLE
RESERVES
• Less certain to be recovered
• Likely situation : Actual remaining quantity <sum of estimated proved
reserves+ probable reserves + Possible reserves

27. FURTHER CLASSIFICATION
Each of the reserves categories (proved, probable, and possible)
may be further divided into developed and undeveloped categories.
DEVELOPED
• expected to be recovered from
existing wells and installed facilities
• Or if facilities have not been
installed, that would involve a low
expenditure to put on production
RESERVES
UNDEVELOPED
expected to be recovered from known
accumulations where a significant
expenditure is required to render them
capable of production.
DEVELOPED PRODUCING
• expected to be recovered from
completion intervals open at the time
of the estimate (Currently producing)
• If well is shut in, the date of
resumption of production is known
DEVELOPED NON-PRODUCING
• Is not put on production yet
• produced before, but currently shut
in (date of resumption of production
is unknown

28. LEVELS OF CERTAINTY IN REPORTED RESERVES
Reported reserves should target the following levels of certainty under a
specific set of economic conditions:
POSIBBLE
PROBABLE
PROVED
Actual
remaining
reserves

29. LEVELS OF CERTAINTY IN REPORTED RESERVES
At least a 90 percent probability that the quantities actually
recovered will equal or exceed the estimated proved reserves
POSIBBLE
PROBABLE
PROVED
Quantities
actually
recovered
At least 90 percent probability

30. LEVELS OF CERTAINTY IN REPORTED RESERVES
At least a 50 percent probability that the quantities actually recovered will equal
or exceed the sum of the estimated proved + probable reserves,
POSIBBLE
PROBABLE
PROVED
Quantities
actually
recovered
At least 50 percent probability

31. LEVELS OF CERTAINTY IN REPORTED RESERVES
At least a 10 percent probability that the quantities actually recovered will equal or
exceed the sum of the estimated proved + probable + possible reserves.
POSIBBLE
PROBABLE
PROVED
Quantities
actually
recovered
At least 10 percent probability

32. RESERVE ESTIMATION – RECOVERY FACTOR
 We can never recover 100% oil and gas reserves at any
given reservoir
 How much hydrocarbons can be recovered and the
recovery factor are dependent on:
 Properties of the reservoir rock and its variation
throughout the reservoir
 Properties of hydrocarbons
 Properties of the displacing substance
 Shape and extent of the reservoir

33. RESERVE ESTIMATION – RECOVERY FACTOR
• Ultimate Recovery (UR) - the sum of the proven
reserves at a specific time and the cumulative
production up to that time
UR = HCIIP x Recovery Factor (RF)
Reserves = UR – Cumulative Production

34. WORLDWIDE END-OF-YEAR PROVED OIL RESERVES

35. PROVEN OIL RESERVES DISTRIBUTION

36. RELATION BETWEEN RESOURCES AND RESERVES

37. RISKS RELATED TO RESOURCES
What is ‘Chance of commerciality’?
The likelihood that a project will achieve commerciality
Reserves: To be classified as reserves, estimated
recoverable quantities must be associated with a project(s)
that has demonstrated commercial viability.

38. CHANCE OF COMMERCIALITY
Contingent Resources: Not all technically feasible
development plans will be commercial. The commercial
viability of a development project is dependent on the
forecast of fiscal conditions over the life of the project.

39. CHANCE OF DISCOVERY
Prospective Resources: The chance that an
exploration project will result in the discovery of
petroleum is referred to as the “chance of discovery.”
Chance of commerciality =
chance of discovery x chance of development

40. RECOURCES CLASSIFICATION FRAMEWORK

41. Current Resources

42. General requirements for classification of reservoirs
Classification
Requirements
Ownership
Drilling
Testing
Regulatory
Infrastructure
and market
conditions
Timing of
production
and
development
Economic
requirements

43. Procedure for reserve estimation
Volumetric
Method
Material Balance
Production
Decline Analysis
Future Drilling and
Planned Enhanced
Recovery Projects

44. Volumetric Method
• Early stage of reservoir development
• Geology, Geophysics, Rock and Fluid properties
• Recovery Factor (RF) assigned arbitrarily
• No time dependency, No Production data

45. Material Balance
• Involve the analysis of
pressure behavior as
reservoir fluids are
withdrawn
• A = Increase in HCPV due to the
expansion of the oil phase (oil + dissolved
gas).
• B = Increase in HCPV due to the
expansion of the gas phase (free gas in the
gas cap).
• C = decrease in HCPV due to the
combined effects of the expansion of the
connate water and the reduction in
reservoir pore volume.
• D = decrease in HCPV due to water
encroachment (from aquifer)
Underground withdrawal
(oil + gas + water) = Expansion of oil +
dissolved gas (A)
+ Expansion of gas-cap gas (B)
+ Reduction in HCPV (C)
+ Cumulative water influx (D)

46. Production Decline Analysis
• Involves the analysis of production
behavior as reservoir fluids are withdrawn.
• Later stage of development, when
production rate undergoes natural decline.
• Mostly Production data
• Time dependent

47. Future Drilling and Planned Enhanced Recovery Projects
Additional Reserves Related to Future Drilling
factors to be considered in classifying reserves estimates associated with future drilling as
proved, probable, or possible:
• whether the proposed location directly offsets existing wells or acreage with proved or
probable reserves assigned,
• the expected degree of geological continuity within the reservoir unit containing the reserves,
• the likelihood that the location will be drilled.
Reserves Related to Planned Enhanced Recovery Projects
factors to be considered in classifying reserves estimates associated with future drilling as
proved, probable, or possible:
• Repeated commercial success of the enhanced recovery process has been demonstrated in
reservoirs in the area with analogous rock and fluid properties.
• The project is highly likely to be carried out in the near future. This may be demonstrated by
factors such as the commitment of project funding.
• Where required, either regulatory approvals have been obtained or no regulatory impediments
are expected, as clearly demonstrated by the approval of analogous projects.

48. Validation of reserves estimates
Through periodic reserves reconciliation of both entity and aggregate estimates. The
tests described below should be applied to the same entities or groups of entities
over time, excluding revisions due to differing economic assumptions:
• Revisions to proved reserves estimates should generally be positive as new
information becomes available.
• Revisions to proved + probable reserves estimates should generally be neutral as
new information becomes available.
• Revisions to proved + probable + possible reserves estimates should generally be
negative as new information becomes available.

49. THANK YOU
© 2013 INSTITUTE OF TECHNOLOGY PETRONAS SDN BHD
All rights reserved. No part of this document may be reproduced, stored in a retrieval system or transmitted in any form or by any means (electronic,
mechanical, photocopying, recording or otherwise) without the permission of the copyright owner.