Chapter 18: Estimation of Primary Reserves of Crude Oil, Natural Gas, and Condensate

Most exploration and production companies’ assets consist of the resources and reserves owned by that entity. Resources typically are classified as either contingent (discovered but presently uneconomic) or undiscovered, but their quantification is outside the scope of this work. This chapter discusses primary reserves, which are discovered quantities of hydrocarbons that can be produced at a profit and are classified by level of uncertainty. The discussion of estimated reserves in this chapter excludes limitations imposed by the terms of ownership.

Since publication of the first two petroleum handbooks, ^{1 , 2}  the international petroleum industry has increased its understanding of the need to develop more reliable estimates of petroleum reserves and to quantify the uncertainty associated with the classifications of reserves. Furthermore, the regulatory authorities of many countries, particularly of the U.S.A., have found it necessary to accommodate the increasing internationalization of the industry and to manage their increasing involvement and influence in the industry.