The classification of resources, both undiscovered and discovered, is becoming increasingly important in the decision making process of major oil companies. Statoil has developed a new internal resource classification system to support investment decisions and the management of petroleum assets.

To achieve this goal, resource definitions have been related to the value chain from early exploration to production, and to economic assessments. Each resource class is associated with a typical business action. Both undiscovered and discovered resources are included, with the discovered, undeveloped petroleum assets given a major focus due to their importance in resource management.

The use of the classification system increases the awareness of the quality and consistency of the resource calculations and of the registration of discovered resources. A method of analysing prospects and discoveries according to their different geological segments (fault blocks etc.) has been chosen to achieve a consistent resource assessment. This reduces the possibility of unexpected results, causing significant reductions in the recorded discovered resources.

The estimates of resources are made using probability distributions. In this way the summation of resources by the use of Monte Carlo simulation, is a fast operation and the variance can be estimated. The proven reserves, which we define as a ‘low’ value with a high degree of certainty (90-percentile), are easy to calculate both within individual fields and for aggregated reserves of many fields.


A resource classification should identify those resource types necessary for developing a company's strategy. The optimal basis for decisions is obtained by classifying the resources according to the importance of the decisions to be made. The resource classification is also a kind of ‘resource accounting’ where one can highlight reserves used to write off field investments, well investments and the resource figures to be quoted in the company's annual reports.

To enable decision makers to act on the best and most correct basis, it is essential that the resource accounting is founded on a well defined classification system.

In the past Statoil has used a modified version of the resource classification system developed by McKelvey, 1975 (Fig. 1). The diagram has one axis representing increased geological assurance (moving from undiscovered to discovered resources), and the other axis representing increased economic feasibility. In this way the two fundamental aspects of our business are well illustrated.

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