Guest Editorial: SPE Seeks Industry Comment on Updated Reserves Definitions

Abstract

SPE has posted the proposed 2007 Petroleum Reserves and Resources Classification, Definitions, and Guidelines at www.spe.org/reserves for member and general industry comment. This update culminates 2 years of work by the SPE Oil and Gas Reserves Committee to establish internationally accepted guidelines. The draft document is sponsored jointly with the World Petroleum Council (WPC), American Assn. of Petroleum Geologists (AAPG), and the Soc. of Petroleum Evaluation Engineers (SPEE). The sponsoring organizations are seeking broad international input from their membership by 1 February 2007 before presenting the definitions to their boards for final approval. Publication of the guidelines could occur as early as March 2007. While individual opinions are welcome, it is preferable if organizations would critically review the proposed system and then submit a consolidated opinion based on internal consensus. Please address your comments by e-mail to ogr@spe.org. A Necessary Update The proposed system would update and replace the current guidelines as contained in the 1997 SPE/WPC Petroleum Reserves Definitions and the 2000 SPE/WPC/AAPG Petroleum Resources Classification and Definitions. These guidelines are now in common use internationally within the petroleum industry and provide a measure of comparability and reduce the subjective nature of resources estimation. However, the technologies employed in petroleum exploration, development, production, and processing continue to evolve and improve. In addition, the growth of the international petroleum industry and the expanding contribution of unconventional hydrocarbons to the worldwide resource base necessitated a re-examination of the existing system. SPE works closely with other organizations to maintain the definitions, and it issues periodic revisions to keep current with evolving technologies and changing commercial opportunities. In updating the definitions, SPE's Oil and Gas Reserves Committee completed a comparison of classifications and definitions used in eight other systems worldwide to identify best practices (see box next page). The primary updates include:The system is project-based.The class is based on the project chance of commerciality.Categorization is based on quantities recovered by applying a defined project to a reservoir. The base case for assessing project economics uses evaluator's forecast of future conditions (including prices and costs, technology available, environmental standards, fiscal terms, and regulatory constraints).Guidelines are applicable to unconventional resources (including bitumen, oil shale, coalbed methane, and gas hydrates). These definitions and guidelines are designed to establish technically based reserves and resources evaluation standards for the international petroleum industry. While, ideally, future national reporting and regulatory disclosure agencies would reference these standards, the guidelines do not replace those currently required by these agencies. Significant Achievements Other significant achievements have been made this year in moving toward creating a common language for describing reserves and resources.