JPT

Vol. 58 No. 4

April 2006

SPE News

Report Advocates Use of SPE Reserves Definitions

A new report recommends that the U.S. Securities and Exchange Commission (SEC) adopt SPE’s oil and gas reserves definitions and rely on SPE’s Oil and Gas Reserves Committee to maintain and update the definitions. SPE’s work in establishing a consistent methodology for classifying and evaluating reserves was cited in the Cambridge Energy Research Assocs. (CERA) report “Modernizing Oil and Gas Reserves Disclosures,” issued 7 February.

SPE welcomed the report’s findings. “SPE appreciates CERA’s recognition of the value of our reserves definitions and the competence of our standard-setting process,” said 2006 SPE President Eve Sprunt. “SPE has been a leader in developing petroleum reserves and resources definitions that have become the preferred industry standard. Our goal is to provide a common language that is suitable for adoption by international financial, regulatory, and reporting bodies, as well as by the oil and gas industry. Creating a universal standard will result in a more accurate global picture of current prospects and future energy supplies for the public.”

SPE and the World Petroleum Council (WPC) jointly developed reserves definitions in 1997. SPE and WPC issued their own reserves definitions in 1987, but came together to jointly issue the 1997 definitions, which represented a major step forward in improving the level of consistency in global reserves estimation and reporting. In 2000, SPE, the WPC, and the American Assn. of Petroleum Geologists (AAPG) issued new resources definitions. Those documents are available on SPE’s website at [link]www.spe.org/reserves. SPE’s Oil and Gas Reserves Committee recently concluded a comparison of reserves definitions and classifications used in seven other systems worldwide to identify best practices that could be included in an updated set of reserves and resources definitions (see “Creating a Universal Standard for Evaluating Reserves,” Guest Editorial, November 2005 JPT, Page 22).

The Society has been working on the issue with the Intl. Accounting Standards Board and the United Nations Economic Council of Europe’s Ad Hoc Group of Experts on the Harmonization of Energy Reserves and Resources Terminology. SPE also is pursuing the integration of the SPE/WPC/AAPG reserves definitions into the United Nations Framework Classification.

The CERA report said that the SEC’s way of determining a company’s oil and gas reserves has not been updated since 1978 and may underestimate recent advances in technology and production capability. The current system lacks a process to address technology’s impact on reserves evaluation, and nontraditional projects involving heavy-oil production or gas-to-liquids technology are not adequately accommodated, the report said. CERA consulted oil companies, accounting firms, institutional investors, and professional societies before making its recommendation.

OTC Spotlight on New Technology Winners Announced

Thirteen technologies were chosen for special recognition at this year’s Offshore Technology Conference (OTC). Now in its third year, the OTC Spotlight on New Technology award highlights technologies that are innovative and are providing significant impact in the offshore arena. The winning technologies will be honored in a presentation at 4 p.m. 1 May at OTC, which is held at the Reliant Center in Houston. The winning companies and their technologies are:

  • Aker Kvaerner Subsea—MultiBooster.Baker Oil Tools—Z-Seal Technology.

  • Baker Oil Tools—Smart Intervention System.

  • CDS Separation Technologies—Compact Subsea Separator with Integrated Sand Handling.

  • Ctour Process Systems AS—Ctour Process.

  • Draka Marine Oil and Gas—Flex-Flame HC 1100/30 Hydrocarbon Fire-Resistant Cable.

  • FMC Technologies—Subsea Electric Actuator System for Manifold Retrofit.

  • Halliburton—Slimhole Reservoir Drilling and Evaluation System.

  • PowerWell Services—PowerAMPS Managed Pressure Drilling System.

  • Schlumberger—EcoScope Multifunction Logging While Drilling Service.

  • Schlumberger—QuickSilver Probe Wireline Sampling Tool.

  • V-Tech AS—UniTong.

  • Weatherford Intl.—PowerStroke Milling System.