Spe prms

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Spe prms

  1. 1. document9The SPE-PRMS SystemOne can describe the lack of certainty regarding the oil and gas resources in 2different level: the lack of certainty regarding the volume of resources that will bediscovered and the lack of certainty regarding the chance of having a commercialdiscovery.The SPE-PRMS system provides a conceptual framework regarding the classificationof oil and gas resource and demonstrates the two different levels in its followinggraph:On the commercial front, one can distinguish between three main groups: reserves,contingent resources and prospective resources. Whilst reserves and contingentresource are resources that have been discovered, and have been proved throughdrilling, the prospective resources are resources that have yet to be discovered (predrilling) but for which there is a certain degree of probability that they will bediscovered and produced commercially based on a number of parameters.The second level of lack of certainty, relates to the amount of resources that can beproduced under each one of these above mentioned groups. The different forecastsrelate to the amounts of producible petroleum and are known as 1P, 2P, 3P under thereserve category, 1C, 2C, 3C under the contingent resource category andlow/best/high estimate under the prospective resources category
  2. 2. document9The international PRMS system defines reserves as those quantities that can expectedto be produced commercially….. and are due to meet 4 different accumulativecriteria:1. After discovery2. Producible3. Commercial4. Defined based on an existing development program (even if not actually yetproduced)In addition for a field to be considered a one that contains reserves there is need tohave reasonable expectations that the internal and external permits will be received inorder to start with the existing development program as well as a firm intention tostart the development within a reasonable time frame with this usually set at about 5years.Regarding reserves, the PRMS system demands a high confidence level regarding thecommercial production potential in the field which is supported by actual productionor formation tests. In certain cases, reserves can be classified as such based on loggingwhile drilling and carrying out sample tests from the field to verify that hydrocarbonsindeed are present and based on analogous fields in the area where productioncapacity has already been proven.After the analysis in a different number of way has been completed, one receives adistribution curve of the quantity of resources that can be classified as reserves. Inorder to describe the different scenarios, the PRMS system classifies the reserves into3 groups:1P – the smallest and thus most conservative estimate. This s the quantity for whichthere is a reasonable certainty that can be produced commercially under definedconditions. When one uses the statistical method, there is a 90% reliability that thequantities that will be produced in actual fact will be equal or greater to than thisforecast (also known as the P90).2 P – The middle or what is known as the best estimate. For this there is a 50%probability that the amounts that will be actually produced will be equal to or higherthan stated (also known as the P50)3P – The most optimistic and the high estimate for which there is a 10% probabilitythat the quantities that will be produced will be equal to or higher than (known also asthe P10).According to the accumulated definitions of the 1P, 2P and 3P we get also theProved reserves – this is the 1Pthe Probable reserves – this is the difference between the 1P and the 2P (namely theadditional marginal difference for the transfer from the 1P to the 2P)
  3. 3. document9Possible reserves – this is the difference between the 2P and the 3P (namely themarginal difference for the transfer from the 2P to the 3P)Thus total reserves are equal to Proved Reserves + Unproved Reserves.Another division that stems from the PRMS regulations deals with the issues clo. Allthese to a commercial development: on production reserves, reserves with have beenapproved for development, and reserves which have been justified for developmentAll these groups are due to lead to the definition of reserves
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