Types of Reserves

In: Business and Management

Submitted By saurabh08
Words 573
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Ultimately recoverable resource (URR)
URR is an estimate of the total amount of oil that will ever be recovered and produced. It is a subjective estimate in the face of only partial information. Whilst some consider URR to be fixed by geology and the laws of physics, in practice estimates of URR continue to be increased as knowledge grows, technology advances and economics change. Economists often deny the validity of the concept of ultimately recoverable reserves as they consider that the recoverability of resources depends upon changing and unpredictable economics and evolving technologies.

The ultimately recoverable resource is typically broken down into three main categories: cumulative production, discovered reserves and undiscovered resource.

Cumulative production is an estimate of all of the oil produced up to a given date.

Discovered reserves are an estimate of future cumulative production from known fields and are typically defined in terms of a probability distribution. Discovered reserves are typically broken down into proved, probable and possible reserves.
Proved reserves
Although there is no single, commonly accepted technical definition of proved reserves, a commonly used description is as follows: "the estimated quantities of oil which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under current economic and operating conditions".

A probability cut-off of 90% is sometimes used to define proved reserves, ie the proved reserves of a field are defined as having a better than 90% chance of being produced over the life of the field. In this sense, proved reserves are a conservative estimate of future cumulative production from a field.

Even taken together, proved, probable and possible reserves are only a proportion of oil in place since it is impossible…...

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