The terms ‘reserves’ and ‘resources’ are often used interchangeably. When applied correctly, they can in fact tell an investor a lot about the stage of a given project. For the less familiar, petroleum in the ground is described as being ‘in-place’, with initial volumes reported as PIIP (petroleum), OIIP (oil), GIIP (gas) or HIIP (hydrocarbons). These ‘initially-in-place’ volumes will either be ‘undiscovered’ or ‘discovered’. MFDevCo only targets the latter.
The recoverable portion of the discovered volumes can be classed as ‘reserves’, ‘contingent resources’ or a combination of both. The recoverable portion, or ‘recovery factor’, can be based upon an intended drainage/recovery plan, defined by a number of wells and numerical simulation, or at a higher technical level by applying professional judgement, supported by analogous/nearby fields. The former or latter in this case can equally be an indicator of progress/the stage of a project. What defines/sets reserves apart is that they are the portion that is commercially viable for extraction and for which there is an executable plan.
Our joint venture, MFDevCo, seeks out undeveloped fields that are often only a solution away from reserves classification. Some undeveloped fields are well appraised and understood, but the margins/potential returns using a typical approach to development are too slim to warrant a large capital investment, in a competitive market. This is just one of several types of project that MFDevCo look to identify. As another example, we monitor developed fields with limited reserves remaining but with significant resources. Changing the way these fields are operated, what they export and by bringing new investment to the subsurface has the potential to significantly extend field life and maximise the use/life of facilities and infrastructure.
In every project/scenario that is reviewed, we are seeking ways to maximise the economic recovery of resources, by finding ways to convert them into reserves.
If you want to know more about resources, reserves and their sub-categories, see the PRMS-2018.
Paul Dinham – Subsurface Lead
Disclaimer: My opinions and assumptions do not necessarily represent those of the company, nor do they make warranties or commitments on behalf of the company. Please feel free to contact me via [email protected] for any further information.