Abstract

The classification of petroleum reserves is an important function of the petroleum engineer and a fundamental procedure in the oil and gas industry. What on the surface would seem to be a simple undertaking can actually be a very complex procedure. This paper discusses technical guidelines used for the classification of reserves under the reserves definitions adopted by the Society of Petroleum Engineers (SPE) and the World Petroleum Congress (WPC) as well as those included in the relevant rules of the United States Securities and Exchange Commission (SEC). The varying technical requirements and guidelines for classification of reserves as proved, probable and possible will be reviewed and discussed. Acquisition of geophysical, petrophysical, geologic, and engineering data is important both quantitatively and qualitatively for reserves classification. The data criteria for each level of classification may vary relative to the classification.

The paper will address the complications, challenges, and inherent uncertainty of reserves estimations. All reserves estimates contain varying degrees of uncertainty related to technical, economic. and political issues. This paper will focus on technical risks associated with geophysical, geologic, petrophysical, and engineering assessments and judgments. The paper will also address why uncertainty exists. how uncertainty fits into reserves definitions and the importance of uncertainty in the classification of reserves.

Since the reserves engineer's job is to plan, gather, assimilate, and analyze all available information using his knowledge and judgment to generate a meaningful reserves estimate the paper will discuss a conceptual procedure for estimation of reserves.

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