The CCOP Petroleum Resource Classification System

Each country needs to have overview of their

Petroleum Resources

Necessary to have a classification system in order to:

· Make a total overview and valuation of the resource base

· Rank resources and accumulations according to a series of defined

specifications

· Monitor activities and decisions in all phases: exploration,

development and production

· Establish a national long-term planning of the petroleum activities

· Evaluate impact of the petroleum activities on other industry-related

activities.
 Purpose of Petroleum resource classification

• Needs of analyses for:

– Government levels - Petroleum resource management
– Corporate levels - Exploration and production business
process management
– Owners levels - Investment management

– Classification system must be understood by:

• Technical people
• Financial advisors
• Analysts
• Politicians

Petroleum resource management

- Government levels

• The government need to have a realistic view of the

total petroleum resource base, the total activities over
time and of the efficiency of exploration and
exploitation activities

– Open acreage for exploration and production

– To regulate activities to maximise the economic
recovery of the country in the long run
 Exploration and production business process
management – Corporate levels

• Companies needs to manage the business processes

related to the granted rights for exploration and
production
• Exploration and production decisions
• Classify petroleum resources in a structured way,
reflecting the business decisions.

Investment management – Owners levels

• Companies, banks and finance institutions needs to

have information about the value of the resources to be
the same for different corporations.
• Focus upon high value resources (proved and proved
developed resources)
• De-emphasise low value resources and exploration and
production potential that can not be quantified.
• SEC – rules widely used
 United States Securities Exchange Commission (SEC):

"Proved oil and gas reserves are the estimated quantities of crude oil,
natural gas, and natural gas liquids which geological and engineering data
demonstrate with reasonable certainty to be recoverable in future years from
known reservoirs under existing economic and operating conditions, i.e.
prices and costs as of the date the estimate is made. Prices include
consideration of changes in existing prices provided only by contractual
arrangements, but not on escalations based upon future conditions."

Basic principles for the CCOP classification system

• the petroleum resources should be considered as a whole,

• possess clear and consistent definitions of the terms,
• general and flexible guidelines,
• clear boundaries between different levels, and
• be easy to be used as well for the governmental agencies as
for the petroleum industry.

Simple, Practical and readily understandable

Petroleum:
Crude oil, condensate, natural gas and related
sustances.

Petroleum resources originally in-place:

Resources that are mapped/unmapped by
geological methods and estimated to be in place in
a deposit.

Recoverable resources:
Total deliverable petroleum quantities from start of
production to cease of production
 E&P forecasts:
==> It is the sales volumes that count

Fuel and flare

Royalty in
Oil, NG kind
L
gas fro and Other agreem.
m
installa the that
tion affect the volumes
Oil
,N
GL
and
gas

Production
share Sales point

Reservoir Proved
Reserves to be
booked
 Undiscovered Resources

Estimate made from

geological, geophysical and
geochemical data.
Definition of hydrocarbon
plays
Quantities estimated by
probabilistic approach using
frequency distribution curves.
Geological risk is the chance
of the geological model being
correct.

Speculative Resources Hypothetical Resources

Unmapped prospects Mapped prospects, but not

discovered
Volume estimate by
Volume estimated by play
probability of discovery
assesment methods

Total hypotetical resources

Unmapped Resources
+ Mapped Resources &
Discovered Resources
= Total resources
are given by statistical
aggregation of the risk-
weighted resource
estimate of each prospect
in the play
 Discovered Petroleum Resources

Potential Resources Reserves

Discovered resources that •Proved Unproved

are recoverable, but not
economically producable •Probable
•Marginal fields •Possible
•Under evaluation
•Too small, too distant
SPE/WPC reserve
•IOR that will change char. of fluid
classification from 1997
•Poor reservoir
3 P:
•Poor HC quality
•High non-HC content Proved, Probable, Possible

SPE/WPC/AAPG Resource classification

 Resource Classification showing Project status categories

Reserves

Proved: Comercially recoverable volumes from known

reservoirs under current economic conditions

Probable: Reserves more likely than not to be recovered

(at least 50% probability)

Possible: Reserves less likely to be recovered (10 %

probability)
 New resource classification system 2001
Undiscovered
resources 8 9
Prospects Plays and leads

Contingent
resources 7F
Not yet evaluated Reserves Sold

5F 4F 3F 2F
6 Develope-
Resources Committed
Approved
1 0
Develope- ment develop-
in planning for On Sold and
ment not likely but not ment
phase development production delivered
very likely planned by authority
5A 4A 3A 2A

7A
Possible future measures
to increase the
recovery factor