Proven reserves is an industry term that means oil or gas that has been discovered and could be produced with today’s technology.
The world consumes about 89 million barrels of oil per day, or 32.5 billion barrels per year.
The industry describes a field as giant if it has more 500 million barrels of oil or BOE.
In 2011, the Top 10 countries by oil proven reserves in billion barrels:
- Saudi Arabia 267 which represent one-fifth of the world’s total.
- Venezuela 211
- Canada 175
- Iran 137
- Iraq 115
- Kuwait 104
- UAE 98
- Russia 60
- Libya 46
- Nigeria 37
The term proven reserves is further subdivided into:
- proved developed reserves
- proved undeveloped reserves.
In addition to the proven reserves come the unproven reserves, which are broken down into:
– Probable reserves
- Possible reserves
that only have a 10% likelihood of being recoverable.
To facilitate calculations and comparisons, these reserve categories are totalled up by the measures 1P, 2P, and 3P, which are inclusive, so include the previous safer measures as:
- 1P reserves = proven reserves (both proved developed reserves + proved undeveloped reserves)
- 2P reserves = 1P (proven reserves) + probable reserves, hence proved AND probable.
- 3P reserves = the sum of 2P (proven reserves + probable reserves) + possible reserves, all 3Ps proven AND probable AND possible.
Because of their definitions, the oil and gas reserves categories may grow or change category due to technological changes, economic changes, new discoveries in exploration and production, and even geological changes and the passage of time (decades) as settling occurs.