The UNFC Concept and the Possibility of its Application in Azerbaijan

Abstract

Abstract Moving towards sustainable development, Azerbaijan joining SDG Agenda 2030 adheres to the policy of developing both hydrocarbon and non-hydrocarbon resources for economic diversification. At the same time, efficient resource management becomes a vital process at the governmental and transnational companies’ levels. Therefore, a competent classification and structuring of all reserves and resources will be inevitable soon to improve their accurate estimates and effective management in various aspects, including resource availability, technical feasibility, and environmental-socio-economic viability. The importance of the latter is indisputable since social and environmental stability is an essential component of the country's sustainable economic development policy. From this perspective, the United Nations Framework Classification for Resources (UNFC) is seen as a tool to help accomplish these tasks and provide simple screening and verification procedures for evaluating future investment projects. Given that hydrocarbon reserves make a significant contribution to the economy, a study on the application and adaptation of UNFC to local petroleum resource management has been granted as a pilot project to assess the feasibility of its further implementation for other energy and mineral reserves and resources of the country. The UNFC current state analysis as a global standard for classifying energy and mineral resources and their applications is carried out to launch the project. The review covers various case studies, including the classification of hydrocarbon reserves and resources (HCRR) using UNFC (Mexico project, transition projects to the classification of the Russian Federation, etc.), as well as mineral resources in different countries. The research primary goal is to screen different approaches and techniques to assess the practicality of their application to petroleum reserves and resources of Azerbaijan in transferring currently used old Former Soviet Union HCRR classification to UNFC, possibly via PRMS. In addition, a Case Study Research based on the Field A data in Azerbaijan is conducted.