Resource Reporting for Petroleum

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1 Resource Reporting for Petroleum David MacDonald Vice President Segment Reserves, BP London, 7-8 February, 2011 AAPG - UNFC Workshop 1

2 Business Processes Planning Life cycle depletion plan for an asset Annual business plan Long term business plan Technology plan Investment decisions Efficiency of investment and long-term operation Acquisition and divestment Performance management Base Management Progression of resources to production London, 7-8 February, 2011 AAPG - UNFC Workshop 2

3 Principles for Petroleum Resource Identification Project based Project management Classification of total volume Clear boundaries between categories Discovered resources Commercial reserves London, 7-8 February, 2011 AAPG - UNFC Workshop 3

4 Resource Evaluation Data Sources Reservoir Net Recoverable Resources Project Entitlement Property London, 7-8 February, 2011 AAPG - UNFC Workshop 4

5 Resource Progression Access Appraise Select Define Execute Operate Development Pending Justified for Development Approved for Development On Production Production Exploration Prospect Key Exploration Non-Commercial Commercial Potentially Commercial London, 7-8 February, 2011 AAPG - UNFC Workshop 5

6 Resource Progression Access Appraise Select Define Execute Operate Development Pending Justified for Development Approved for Development On Production Production Development on Hold Exploration Prospect Development Unclarified Discovery Criteria Commercial Criteria Volumetric Uncertainty Remaining Prospectivity Key Exploration Non-Commercial Commercial Potentially Commercial London, 7-8 February, 2011 AAPG - UNFC Workshop 6

7 Discovery Criteria Reserves Contingent Resources Prospective Resources Discovery Criteria to consider: Seismic indication Well penetration Core and logs Flow test Commercial rates Types of fluids Types of reservoirs London, 7-8 February, 2011 AAPG - UNFC Workshop 7

8 Commercial Criteria Reserves Contingent Resources Prospective Resources Commercial Discovery Criteria to consider: Project maturity Access & entitlement Market & sales connectivity Authorisation & commitment Economic case validation Intent to develop Reasonable time frame London, 7-8 February, 2011 AAPG - UNFC Workshop 8

9 Volumetric Uncertainty Cumulative Probability (percent) 100% 0% Cumulative Production Proved Probable 1P 2P 3P Volume Possible Criteria to consider: Volume being measured In-place Recoverable Commercial Deterministic specifications Probability thresholds Terminology London, 7-8 February, 2011 AAPG - UNFC Workshop 9

10 Society of Petroleum Engineers Petroleum Resources Management System (PRMS) Published 2007 Evergreen maintenance and enhancement Goal to be the premier petroleum classification standard Adopted by Industry Financial organisation Governments Regulatory agencies Reporting bodies London, 7-8 February, 2011 AAPG - UNFC Workshop 10

11 PRMS Principles Project based Classify and categorise by Chance of commerciality Recoverable uncertainty Forecast of future conditions Deterministic and probabilistic methods Conventional and unconventional resources London, 7-8 February, 2011 AAPG - UNFC Workshop 11

12 PRMS Classification Framework Total Petroleum Initially in Place Discovered Undiscovered Commercial Sub-Commercial Reserves Contingent Resources Prospective Resources Production On Production Approved for Development Justified for Development Development Pending Development Unclarified or On Hold Development not Viable Unrecoverable Prospect Lead Play Unrecoverable Proved 1P Probable 2P Possible 3P 1C Low Estimate 2C Best Estimate 3C High Estimate Increasing Chance of Commerciality Range of Uncertainty London, 7-8 February, 2011 AAPG - UNFC Workshop 12

13 SPE Discovery Criteria Established through testing, sampling and/or logging the existence of a significant quantity of potentially moveable hydrocarbons Does not require a flowing well test Unconventionals Tracks all hydrocarbons London, 7-8 February, 2011 AAPG - UNFC Workshop 13

14 Commercial Criteria Evaluator s economic criteria Forecast conditions Regulator s criteria No significant contingencies Reasonable expectation of approvals Intent to develop in reasonable timeframe Gas cap blow-down Major project with long development schedule London, 7-8 February, 2011 AAPG - UNFC Workshop 14

15 Volumetric Uncertainty Guidelines for estimation Covers: Reference points Lease fuel Natural gas composition Non-hydrocarbon components Gas re-injection Gas storage Production balancing Analogues Aggregation And many more issues London, 7-8 February, 2011 AAPG - UNFC Workshop 15

16 SPE PRMS Download From the website: London, 7-8 February, 2011 AAPG - UNFC Workshop 16

SPE/WPC/AAPG/SPEE Petroleum Resources Management System (PRMS)

SPE/WPC/AAPG/SPEE Petroleum Resources Management System (PRMS) PRMS Prepared by the SPE Oil & Gas Reserves Committee (OGRC) 1 Who is the OGRC? International representation (USA, Canada, Australia, UK,