One day - One Word

Email This Page

Recoverable Reserves

Definition

Recoverable reserves are defined as the proportion of resources, here oil and gas, that can be technically, economically and legally possible to extract.

The recoverable reserves may also be called proven reserves.

Comments

The recoverable reserves may be far different from the total resources called total Petroleum Initially-In-Place (PIIP).

This Petroleum Initially-In-Place (PIIP) is an estimation resulting from exploration campaign and geological calculations.

At the stage of the evaluation of the Petroleum Initially-In-Place (PIIP), no provisions are made because of the technology requested to extract it or its economical viability.

The Petroleum Initially-In-Place (PIIP) is just reflecting that a certain quantity of hydrocarbons is laying in a given reservoir and under any state.

Then the question comes if the state under which this hydrocarbon has been identified makes it recoverable or unrecoverable.

The resources are declared recoverable reserves if they may be developed with reasonable certainty from a given date under current economic conditions, operating methods, and government regulations.

Then with the oil and gas field moving on from exploration into development phase and production, these recoverable reserves will be categorized in developed and undeveloped.

In some cases a share of the probable reserves may also be considered as recoverable reserves if once the presence of these probable reserves is confirmed by further exploration, it is admitted with high probability that the state of these probable reserves is similar to the already proven reserves and therefore recoverable.

Possible reserves cannot be considered as recoverable reserves due to the accumulation of uncertainty about the nature of these reserves at a given date.

By definition the reserve have been categorized between:

 – 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.

These definitions are well-known and recognized for conventional oil and gas, but the development of unconventional resources (Extra heavy crude oil, Tight oil, Tight gas, shale gas, Oil sand, etc…) requested more accurate definitions since the estimation of recoverable reserves is attached to the notion of certainty or probability of recovery according to number of provisions.

Canada being the country with the largest unconventional resources went through the exercise to go deeper in the details of the provisions to be made for the calculation of recoverable resources and published in 2002 in the Canadian Oil and Gas Evaluation Handbook (COGEH).

The COGEH itself can be obtained from the Petroleum Society of the Canadian Institute of Mining, Metallurgy and Petroleum, Calgary

 This document proposes the table below to classify the resources between recoverable reserves and unrecoverable according to the degree of uncertainty of their related technical and commercial provisions.

Then the legal contingencies must also be considered as having a major impact on the unconventional resources to declare them recoverable or unrecoverable as for example with shale gas, allowed in USA and banned in most of European countries

For more information and data about oil and gas and petrochemical projects go to Project Smart Explorer

Leave a Reply

There are three major facts that should be watched out for in all payday loans in the United States.