petroleum resources reserves

PETROLEUM RESOURCES AND RESERVESFOUNDATION AND PRINCIPLES

Monday 08 April 2016

08-04-2016 Indian Institute of Technology, Bombay. Department of Earth Sciences. 1

Petroleum Resources - Outline1. Petroleum Resources – Types

i. Conventional ii. Unconventional

2. Volumes of Petroleumi. In Reservoirii. At Point-of-Sale (Production)

3. Principles of Estimation4. Standards and Terminology5. Uncertainty and Assessment


Petroleum Resources & Reserves• Estimated volumes of oil & gas in an area of

investigation.• Determined indirectly from may different methods of

investigation• Inherent uncertainty in the relationship between the

measurement – volumes of oil & gas exists• The determined volumes and their value are of

strategic importance in company – national and global economics

• Are treated as “Assets” in the company books• Determines the valuation of the company and assets of

nations.


Petroleum resource - types• Petroleum resources are volumes of oil & gas that occur as

deposits in the layers of earth• In principle these are similar to the other mineral deposits• Rocks in the crust of earth have pore-space that is filled

with – i) Water ii) Gases and iii) Petroleum– Petroleum occurs in 2 primary phases : i) Oil and ii) Gas

• Significant quantities (that can be discovered and produced) occur in 2 types of deposits :i) Conventional : discrete accumulations – with map

boundaries & distinct hydrodynamic realmsii) Unconventional : continuous accumulations in a wide

area & not affected by or separated by distinct hydrodynamic realm (from the pervasive water)


Types of Petroleum ResourcesConventionalConfined to clear areas of Petroleum

UnconventionalLarge unconfined areas have variable volumes


The difference in nature of these 2 types determines the methods of assessment and recovery

Presenter

Presentation Notes

http://www.eia.gov/todayinenergy/images/NatGasSchematic.jpg http://www.2b1stconsulting.com/wp-content/uploads/2012/09/Conventional_oil_and_gas_definition.jpg

Types of Petroleum Resources


Conventional : discrete accumulations –with map boundaries & distinct hydrodynamic realms

Unconventional : continuous accumulations in a wide area & not affected by or separated by distinct hydrodynamic realm

Volumes of PetroleumReservoir• The amount of Oil & Gas that

occurs in the subsurface– Yet to be discovered =

Prospective (opportunity)– Discovered (Known)

• Undeveloped – Value yet to be realized

• Developed – Value is realized and mechanism to produce and sell are in-place.

– Produced - Volumes produced and sold (monetized)

• Volumes are in the conditions of the deposit (Reservoir)– Reservoir = Petroleum Deposit

in the subsurface.

Reserves (Saleable)• The Amount of Oil & Gas that is

or can be produced and sold at given time. – Discovered + Developed– Engineering and processing

facilities are built– Operational aspects of the

reservoir and its facilities are known (in-place)

• Volumes are in the surface conditions of extraction, processing, transportation and sale. (Reserves)– Field = Petroleum reservoir that is

developed and producing (ready).– Reserves = Volumes a field is

capable of production and sale.


Resources : ReservesClassification System

Stages of Discovery and Development


↑ Producing↑ Developing↑ Design↑ Appraisal↑ Discovery↑ Prospect↑ Play↑ Basin

1. Resource = Not established for commercial recoverya. Prospective = Not yet discovered – estimated from Geological Chanceb. Contingent = Discovered, yet not established as commercial project

2. Reserve = Established for commercial recovery

Industry Classification of Resources –Reserves

Basin•Large area with Petroleum

System

Play•Identified components of

effective Petroleum System

Prospect•Discrete Accumulations•Predicted volumes

Field•Drilled and discovered HC


E&P Organization & Reserves


Production & Operations

Field Development

Appraisal & Commerciality

Exploration (Basin, Play and Prospect analysis)

Business Development (Acquire Blocks)

Resources in-place


http://www.epgeology.com/general-discussion-f29/hciip-formula-t5776.html

Equation for Resources in-place



Reservoir Volumes - HCIIPIn-Place Hydrocarbons• HCIIP = Volume of Petroleum in-place

within the reservoir– Volume of Reservoir Rock (Gross-Rock

Volume GRV)– Part of GRV that is made of Pore-Space

(Pore-Rock Volume PRV)– Part of PRV that is filled with Petroleum

(Hydrocarbon Pore Volume HCPV)• Reservoir are made of 3D of space

– GRV = Volume of Space– PRV = GRV * Average Porosity– HCPV= PRV * Average Saturation Shc

• All these parameters are estimated from samples taken from 1 or more wells drilled in the reservoir

– Geophysical methods like seismic support the estimates

– Techniques like Well-Logs, Well-Tests, PVT analysis etc. support

Computing methods1. GRV

- Area of the Closure- Average Thickness- 3D Volume above FWL

2. PRV- Porosity samples (Core/ well

log)3. HCPV

- Saturation measurements (well log)

- Saturation Height function (Reservoir Rock types)


Uncertainty in Volumes and Potential : Resources & Reserves

ParametersAll these are :a. Spatial variablesb. Sampled mostly by wellsc. Estimated indirectly from

physical measurementsd. Change in different directions

-- Anisotropye. Influenced by trends and

other causes -- Non-Stationary

f. Difficult to determine {Measure & bind}

Nature of Uncertainty1. Sample distribution of the

parameters (GRV, NTG,Ø, Sg, FVF)

? Minimum ? Maximum?Most-Likely

1. Reservoir Average of the Parameters (Population)

2. Other dependencies3. Methods of assessment of

Ranges4. Assessment of Quantification of

Uncertainty5. Impact on Resource in-place6. Impact on Reserves


Resource Estimation

Volumetric Equation

Average & Ranges

Distribution & Estimation

Monte Carlo

Map BasedX,Y,p data

Map Framework

Interpolation Method

Geostatistics

3D Model BasedX,Y,Z,p data

Model Framework

Parameter Interpolation

Simulation


Towards ReservesDevelopment Scheme

ProductionOperations

Geology: Faults & Facies, Stratigraphy

Rock-Fluid interactions

Formation Volume Factor (FVF)

HCIIP

Connectivity

Wells (V|H) & Spacing

Rate of Flow

Ease of Flow (Permeability) Fluid Phases


Presenter

Presentation Notes

Reservoir Potential – Reserves HCIIP- The estimated total volumes of Hydrocarbons in the reservoir FVF- Formation Volume Factor (Shrinkage or expansion when the Petroleum is taken to surface) Permeability – Ease of flow of the Hydrocarbons (oil & gas phases) and water in the reservoir Connectivity – small and large scale connectivity of the reservoir for facilitating flow Wells- The number and nature of wells that are producing

Standards & MethodsPRMS (Petroleum Resource Management System)

• Standard classification methods – SPE & AAPG

• Categories of “Uncertainty”– Technical

• HCIIP• Recovery Efficiency

– Commercial• Market | Prices | Contracts

• Classification of “Commerciality”

Methods for estimation1. Analytical

– Analog

2. Volumetric– Equation– Maps– 3D Models

3. Material Balance4. Production Performance

Analysis


Methods of Estimation

Parameters & Results are Determined as most-likelyDeterministic•A single value for each sample in the parameter•Single value of HCIIP or Reserves estimated•Classified as “Proved – Probable – Possible” or “1P – 2P – 3P”

Realizations Method. 3 or more deterministic estimates Scenario•Using Deterministic Method as foundation•Ranges of Parameters and Results are created as Scenarios•Assigned Low-Medium-High case of likelihood

Statistical uncertainty of Samples, Parameters and ResultsProbabilistic•Sample data for each Parameter is assessed for their Probability and Distributions•Results are derived by random sampling of the parameters (Monte Carlo) or by Other statistical

simulation•Large number of realizations are created and ranked (P10-P50-P90)


http://www.spe.org/industry/docs/PRMS_Guidelines_Nov2011.pdf Chapter-5

Presenter

Presentation Notes

http://www.spe.org/industry/docs/Petroleum_Resources_Management_System_2007.pdf

http://www.spe.org/industry/docs/PRMS_Guidelines_Nov2011.pdf

At the End• Reserve reporting is very sensitive aspect

regulatory reports in all E&P companies• Reserves define “THE GOAL” and “THE RESULT”

of the E&P company• It is nearly impossible to exactly estimate the

HCIIP or the Reserves • Different methods carry sets of advantages and

disadvantages – there is no clear winner• Integrity and Process plays important role in fair

and consistent assessment


An Example of Resource and Reserve EstimationA-For Apple Field

MMRA Reserve AnalysisZone Name: Sandstone

Country: IrelandBusiness Unit: Domestic 2

Basin: Play: Stratigraphic

Analysis Run Date: 24-10-2012 18:03:47 by: K-KatyStatus: Prospect Pre-Drill

http://www.roseassoc.com/software-oil-gas-prospect-play-portfolio/multi-method-risk-analysis/

Net Rock Volume A-For Apple Field, Sandstone, Domestic 2

Gross Rock

Volume

PercentTrap

Fill

Net toGross

Ratio

NetRock

Volume

Area (for Net

Pay Cross

Check)

Average Net Pay

(Implied)

(Million cubic

metres) (%) (%)

(Million cubic

metres) (sq km) (metres)P99 191.705 100.0 15.3 53.776 NA NA

P90 300.000 100.0 24.7 98.549 NA NA

Mode 432.408 100.0 35.5 139.601 NA NA

P50 519.615 100.0 37.3 189.110 NA NAMean (P99->P01) 563.644 100.0 37.4 209.313 NA NA

P10 900.000 100.0 50.0 363.425 NA NA

P01 1,408.417 100.0 59.8 624.866 NA NA

Shape LOGNORMAL NORMAL NORMAL OUTPUT NA NA

Input ValuesP90=300.00P10=900.00

P90=100.00P10=100.00

P90=25.00P10=50.00

NA NA NA

ClippingLClip=NoneHClip=None

LClip=NoneHClip=None


NA NA NA

Correlation NA NA 0% to GRV NA NA NA

Results above after Input Truncations are applied (0%->100%).

Max % Fill Allowed is 100%

NRV P10/P90 = 3.7 NA NA

CROSSCHECK

24-Oct-12

P99P98

P95

P90

P80

P70P60P50P40P30

P20

P10

P05

P02P01

10 100 1,000

Cum

ulat

ive

Prob

abilit

y >>

>

Net Rock Volume

0

1

2

3

4

5

6

7

0 200 400 600 800

NRV P99 to P01Gross Rock VolumeNet to Gross RatioAreaAverage Net PayPercent Trap FillNRV Mean

NotesSet Net Rock Volume

MMRA Analysis: A-For Apple Field, Sandstone (Domestic 2)08-04-2016 21

HC Recovery Yield A-For Apple Field, Sandstone, Domestic 2

Calculated YieldOil Raw Gas

Aver

age

Poro

sity

(%)

Aver

age

Hydr

ocar

bon

Satu

ratio

n (%

)

Prim

ary

Reco

very

Effic

iency

(%)

Oil F

orm

ation

Volu

me

Fact

or (r

eser

voir

/ sto

ck

tank

unit

s)

Solut

ion G

as Y

ield

(SCF

/ Std

bbl)

Solut

ion G

as R

ecov

ery

Effic

iency

(%)

Prim

ary

Reco

very

Effic

iency

(%)

Gas

Expa

nsion

Fac

tor

(sta

ndar

d / r

eser

voir

units

)

Cond

ensa

te Y

ield

(bbls

Co

nd p

er M

MCF

)

Cond

ensa

te R

ecov

ery

Effic

iency

(%)

Oil R

ecov

erab

le Y

ield

(bbl

s pe

r acr

e-fo

ot)

Gas

Reco

vera

ble

Yiel

d(M

CF p

er a

cre-

foot

)Sh

rinka

ge &

Sur

face

Lo

ss (A

djust

men

t of

Tota

l Raw

Gas

to S

ales

Oil P

ropo

rtion

(% o

f res

ervo

ir vo

lume)

P99 12.4 47.3 NA NA NA NA 41.8 255.7 NA NA NA 546.2 0.0 0.0

P90 16.2 54.9 NA NA NA NA 50.1 280.0 NA NA NA 751.9 0.0 0.0

Mode 20.6 63.3 NA NA NA NA 59.9 311.4 NA NA NA 1,134.1 0.0 0.0

P50 20.6 64.5 NA NA NA NA 60.0 311.7 NA NA NA 1,062.9 0.0 0.0Mean (P99->P01)

20.6 64.6 NA NA NA NA 60.0 311.8 NA NA NA 1,079.5 0.0 0.0

P10 25.0 74.3 NA NA NA NA 70.1 343.8 NA NA NA 1,437.3 0.0 0.0

P01 28.7 82.2 NA NA NA NA 78.3 371.6 NA NA NA 1,833.8 0.0 0.0

Shape NORMAL NORMAL NA NA NA NA NORMAL NORMAL NA NA NA OUTPUT NORMAL BETA

Input ValuesP90=16.00P10=25.00

P90=55.00P10=74.00

NA NA NA NAP90=50.00P10=70.00

P90=280.00P10=344.00

NA NA NA NAP90=0.00P10=0.00

P90=0.00P10=0.00

ClippingLClip=NoneHClip=None


NA NA NA NALClip=NoneHClip=None


NA NA NA NALClip=NoneHClip=None


Correlation NA0% to

PorosityNA NA NA NA

0% to Porosity

NA NA NA NA NA NA NA

Selected Products:

Secondary Products:

O&G Recoverable Yield P10/P90 = NA 1.9

Reservoir Parameters

24-Oct-12

Surf Loss(%)

Oil Prop (%)

HC Rec Yield Estimating Mode: COMPONENTS

Primary OilComponents

Primary GasComponents

Primary Gas

P99P98

P95

P90

P80P70P60P50P40P30P20

P10

P05

P02P01

100 1,000 10,000

Cum

ulat

ive

Prob

abilit

y >>

>

HC Rec Yield

0 0 0 1 1 1

Oil Recoverable Yield

Oil Y ield P99 to P01Oil Rec. Eff .PorosityHC SaturationOil FVFOil Y ield M ean

0 500 1,000 1,500 2,000

Gas Recoverable Yield

Gas Y ield P99 to P01PorosityGas Rec. Eff .HC SaturationGas GEFGas Y ield M ean

NotesSet HC Rec Yield


A-For Apple Field, Sandstone, Domestic 2

Oil Raw Gas Oil Total

CondNon-

Assoc Soln

MMBO

BCF MMBO

MMBO

BCF BCF MMBOE MMBOE MMBOE

P99 0.00 79.75 0.00 0.00 47.57 0.00 7.93 NA NA

P90 0.00 151.35 0.00 0.00 91.58 0.00 15.26 NA NA

Mode 0.00 236.88 0.00 0.00 149.77 0.00 24.96 NA NA

P50 0.00 319.40 0.00 0.00 198.28 0.00 33.05 NA NAMean (P99->P01) 0.00 368.79 0.00 0.00 231.41 0.00 38.57 NA NA

P10 0.00 673.67 0.00 0.00 428.32 0.00 71.39 NA NA

P01 0.00 1183.24 0.00 0.00 769.65 0.00 128.27 NA NA

Pg- Chance of Geologic

Success (>=Ab Min resource)

Pc- Chance of Commercial

Success (>=MCFS)

(Option is OFF)

Pe- Chance of Economic

Success (>=MEFS)

(Option is OFF)

31.1% NA NA

24-Oct-12

Simulation P10/P90 Ratio=4.7 versus Predicted: Ampl with Downdip Conformance: 2 - 4

Liquids Sales Gas

Above Commercial

Threshold (Option is

OFF)

Current settings...Estimating method: VOLUMETRIC (Net Rock Volume X HC Yield)Intermediate Simulation: 5000 IterationsResources Simulation: 15000 IterationsTruncations: Input= 0.00/1.00 Output= 0.00/1.00Raw Gas Surface Loss: NONEPercentile Sorting: Each product sorted individually. (Warning...resource components will not sum across to HC Equiv.)

Chance of Success >>

Above Economic Threshold (Option is

OFF)

Simulation Not Current

Resources

Prospective Undiscovered Recoverable Resources

Original In Place

Total Geologic Pre-Drill

Mode: EXPLORATION PROSPECT

P99P98P95P90

P80P70P60P50P40P30P20

P10P05P02P01

1.00 10.00 100.00 1,000.00

Cum

ulat

ive

Prob

abilit

y >>

> Resources

Economic reso urces M MBOE

Comm ercial resources MM BOE

Geolo gic re source s MMBOE

Th reshold resource component MMBOE

In-place resources MM BOE

0

1

2

3

4

5

6

7

0 20 40 60 80 100 120 140

Geologic EUR (Equivalent)

EUR P99 to P01

Net Rock Volume

Gas Yie ld

Oil Yield

Productive Area

Productive Area

EUR Mean

Simulation Settings Notes


Chance Checklist A-For Apple Field, Sandstone, Domestic 2 24-Oct-12

EXPLORATION PROSPECT Chance Success Ratings ( 0.00-1.00 )Confidence of P99 Resources: 7.93 MMBO

0.800.80

MINIMUM FACTOR 0.80 High Good LotsConfidence of P99 Resources: 7.93 MMBO

0.900.900.90

MINIMUM FACTOR 0.90Confidence of P99 Resources: 7.93 MMBO

0.700.600.60 Low Bad Good Poor Limited

Reservoir MINIMUM FACTOR 0.60 News NewsConfidence of P99 Resources: 7.93 MMBO

0.90 "Coin Toss"0.900.90

MINIMUM FACTOR 0.90 Fwd $ Ready to Drill ($MM): Confidence of P99 Resources: 7.93 MMBO Value of Information EMV ($MM):

0.85 Date:0.80 G&G/Eng Estimator(s): 24-Oct-120.90 Peer Review:0.90 RCT Review:

MINIMUM FACTOR 0.80 Manager Review:31.1%

31.1%

Directions: The default value for each chance factor is 1.0. Use the Chance Adequacy Matrix shown below to guide the assessment of each factor or sub-factor (not the overall chance of geologic, appraisal or development success. This program uses the “weak link” (i.e. – the smallest sub-factor is used whenever values for more than one are entered) approach in assigning values for each factor. Enter comments by clicking

the Comments icon.

SOURCE COMPONENTS Quantity/Volume (include Monetizable Product) Quality/Richness CHANCE ADEQUACY MATRIX Maturation

Timing of Expulsion0.0 - 0.2

TIMING/ MIGRATION COMPONENTS Timing of Closure / Trap 0.8 - 1.0

0.4 - 0.6 0.6 - 0.8 Effective Migration Pathway

0.2 - 0.4

If additional technical work is required to move this prospect to Ready-To-Drill status, capture details in the Risk Mitigation section of the Comments icon. Data Quality

Reservoir Performance

RESERVOIR COMPONENTS0.3 - 0.45 0.45 - 0.55 Presence

Quality0.55 - 0.7

CLOSURE COMPONENTS Map Reliability & Control Presence

CONTAINMENT COMPONENTS Top / Base Seal Effectiveness

EXPLORATION PROSPECT Chance of Success (calculated)

Preservation from Spillage or Depletion Preservation from Degradation

Uncertainty Index: 0.50 EXPLORATION PROSPECT Chance of Success OVERRIDE

FINAL Chance of Success

Participants:K-Katy Lateral Seal Effectiveness

Reservoir Critical Chance Factor(s):

Con

fiden

ce le

vel

Qua

lity

Qua

ntity

Con

trol

NotesClear Chance SubComponents


References1. http://petroleumsys.blogspot.in/2010/06/petroleum-system-analysis.html2. http://www.powershow.com/view/34434-

MzVlO/SPEWPCAAPGSPEE_Petroleum_Resources_Management_System_powerpoint_ppt_presentation3. http://www.epgeology.com/general-discussion-f29/hciip-formula-t5776.html4. SPE Reserves : http://www.spe.org/industry/reserves.php5. PRMS quick overview: http://www.spe.org/industry/docs/PRMS_guide_non_tech.pdf6. PRMS guide: http://www.spe.org/industry/docs/Petroleum_Resources_Management_System_2007.pdf7. PRMS Guidelines 2011: http://www.spe.org/industry/docs/PRMS_Guidelines_Nov2011.pdf8. MMRA: http://www.roseassoc.com/software-oil-gas-prospect-play-portfolio/multi-method-risk-

analysis/


http://petroleumsys.blogspot.in/2010/06/petroleum-system-analysis.html

http://www.powershow.com/view/34434-MzVlO/SPEWPCAAPGSPEE_Petroleum_Resources_Management_System_powerpoint_ppt_presentation


http://www.spe.org/industry/reserves.php

http://www.spe.org/industry/docs/PRMS_guide_non_tech.pdf

http://www.spe.org/industry/docs/Petroleum_Resources_Management_System_2007.pdf

http://www.spe.org/industry/docs/PRMS_Guidelines_Nov2011.pdf

http://www.roseassoc.com/software-oil-gas-prospect-play-portfolio/multi-method-risk-analysis/