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Petroleum Reserves & Resources Estimation and its Impact on Business Decisions—PRMS Applications Guidelines Document

21 – 22 October 2013

Dubai, UAE | The Address, Dubai Marina

Technical Agenda

Monday, 21 October, 0800–0830

Seating, Safety Briefing by Hotel, Welcome by Co-Chairpersons/Committee Introduction

0830–0930

Opening Ceremony Speech by Zack Henry, Director of Energy Dialogue

Distinguished Invited Speaker: Ali Al Muhairy, Sr. Vice President, Development, ADMA-OPCO

0930–1100

Session 1: 2011 PRMS Application Guidelines: Overview

Session Chairs: Henk Jaap Kloosterman, Shell; John Etherington, PRA International; Namat Al-Soof, IEF

Representatives of the SPE Oil and Gas Reserves Committee (OGRC) describe PRMS and the Application Guidelines (AG), discuss the major changes to prior guidance and provide insight into ongoing activities to assist in the implementation of the Application Guidelines document published in November 2011.

1130–1300

Session 2: Seismic Applications

Session Chairs: Ahmed Sabry, Schlumberger; Henk Jaap Kloosterman, Shell

An overview is presented of the guidance provided in the PRMS-AG on the role of geophysical technology in reserves estimation and classification. This will be illustrated with a couple of integrated case studies, focusing on the use of seismic for structural definition, fault analysis, fluid contacts, reservoir development and flow surveillance purposes, and its implications on reserves and resources estimates. Middle East case studies will be discussed in detail.

1400–1550

Session 3: Resources Assessment—Deterministic and Probabilistic Methods

Session Chairs: Enrique Morales, SGS Horizon; Wim Swinkels, Independent Reservoir Engineering Consultant; Yasin Senturk, Saudi Aramco

Our industry is currently divided on the applicability of probabilistic methods to reserves assessment and reporting. Most post-discovery assessments are based on deterministic geologic, engineering and economic models that represent different levels of uncertainty. In the pre-discovery exploration phases or at early stages of field development, when limited information exists, many in the industry typically apply probabilistic methods. Properly understanding and capturing uncertainty is key to addressing potential downsides and their mitigation measures. Reduction of uncertainties, in many cases, is key to maturing contingent resources into reserves. Some believe that probabilistic methods should be applied throughout the life of a reservoir. Is some sort of hybrid approach feasible to bring together these issues and optimally manage uncertainty throughout field life?

This session will place emphasis on uncertainty management and will cover:

  • Deterministic assessment methods
  • Probabilistic assessment methods
  • Hybrid methods for reserves and resource estimates
  • Regional experience

1610–1710

Session 4: Aggregation of Resources

Session Chairs: David G. MacDonald, BP; Elliott Young, ExxonMobil; Hassan Ali Al-Hashmi, ADMA OPCO

Available literature describes the pros and cons of reserves and resources aggregation. Companies adapt their reserves/resources aggregation approaches to meet corporate objectives (e.g. portfolio analysis, external and internal disclosures).

Companies’ accounting organisations call for specific aggregation approaches for proper determination of depreciation and other financial calculations as per IAS/IFRS, FAS/FASB, US GAAP, etc. Accounting firms and regulatory bodies will be very strict and specific about how reserves are aggregated and disclosed. Gas commercial agreements between buyers and sellers will, in some cases, call for a realistic assessment of the ability of the seller to deliver on the gas commitments to be agreed upon, taking proper account of uncertainties and portfolio issues (e.g. number of fields supplying gas, dependencies between fields,etc.). The PRMS ‘Project’ definition raises an interesting concept in the aggregation of reserves, linking an investment decision to the ‘Project’ and to the accounting aspects and aggregation approach that can be used to estimate reserves. These issues, as well as some global and specific local issues on this topic, will be part of this session.


Tuesday, 22 October, 0900–1030

Session 5: Commercial Consideration in Evaluation of Reserves and Resources

Session Chairs: Norbert Dolle, Shell; Said Al Harthy, PDO

The commercial evaluation of petroleum reserves and resources is a process by which the value of investing in existing and planned petroleum recovery projects is determined. In addition to the inherent uncertainties in physically recoverable petroleum volumes, each scenario requires assumptions and/or ‘givens’ regarding costs, prices, taxes and fiscal terms. Apart from these factors, there may be marketing, legal, environmental, social or governmental contingencies that must be addressed prior to deeming any discovered resource a ‘reserve’ versus a ‘contingent resource’. This session will focus on addressing these key commercial considerations in the evaluation of reserves and resources.

1100–1230

Session 6: Unconventional Resources

Session Chairs: Dale Zankl, Weatherford; Doug Peacock, Gaffney, Cline & Associates; John Etherington, PRA International

Unconventional resources exist in petroleum accumulations that are pervasive throughout a large area
and that are not significantly affected by hydrodynamic influences. Examples include natural bitumen, coalbed methane, and shale gas. There are also projects which are on the boundary between conventional and unconventional; this includes tight gas, heavy oil and complex gas, and condensate reservoirs. While the assessment techniques and extraction programmes may differ dramatically from those applied in conventional reservoirs, the end result of the assessment is an uncertainty distribution of marketable petroleum products, and the classification principles of PRMS would still apply.

Subjects to be discussed include:

  • Reserve and resource estimates in complex low permeability reservoirs
  • Unconventional resource assessment challenges
  • Shale gas resources—global and local projects

1330–1500

Session 7: PRMS Guidance for IOR and EOR

Session Chairs: Bernard Seiller, Total; Said Al Harthy, PDO

IOR/EOR processes (recovery methods) attempt to recover oil beyond primary recovery methods. Generally, the recovery from primary recovery methods accounts for less than a third of the oil initially in place, implying that the target for IOR/EOR is significant. EOR projects, however, are generally complex and implementation is tied to the price of oil and overall economics. But with current higher oil prices there is renewed interest in EOR and a number of projects/pilots are being implemented across the regions. This session will focus on different approaches for resource volume estimation and classification of IOR/EOR recovery processes, as per the PRMS Applications Guidelines document, with its associated challenges.

1530–1630

Session 8: Reserves Entitlement and Other Issues

Session Chairs: Aquiles Rattia Regalado, Repsol; Doug Peacock, Gaffney, Cline & Associates; Elliott Young, ExxonMobil

In the exploration, development, and production of oil and gas reserves and resources, entitlement to a
share of production and the ability to report related reserves can be important factors when considering opportunities to invest and participate in. This session focuses on the key principles and agreement elements that enable reserves to be reported under a wide range of agreement types in use around the world. The session also covers how the entitlement to production and reserves is determined under these agreement types. In addition, there are a number of measurement and operational issues affecting reporting that will be discussed. These include:

  • Measurement or entitlement transfer points
  • Quantities consumed as fuel
  • Non-hydrocarbons and secondary revenue streams
  • Key differences between PRMS and host regulations and definitions
  • Considerations that may prevent use and disclosure of probable and possible reserves