NEW DATE: Submit Comments on PRMS Application Guidelines by 15 March 2011

The Society of Petroleum Engineers (SPE) has continued its efforts to establish internationally accepted guidelines for the evaluation of petroleum reserves and resources by heading an effort sponsored by five industry organizations to develop Guidelines for Application of the Petroleum Resources Management System (PRMS).

SPE and its partner societies welcome industry review and comment on the draft applications document. Comments should be sent to by 15 March 2011. Comments received by that date will be reviewed by a subcommittee of the SPE Oil and Gas Reserves Committee, which will consider whether changes should be made to the draft to address them. The final version will then be submitted for approval to each of the sponsoring organizations.

The applications document is sponsored jointly with the World Petroleum Council (WPC), American Association of Petroleum Geologists (AAPG), the Society of Petroleum Evaluation Engineers (SPEE), and the Society of Exploration Geophysicists (SEG) and represents the culmination of three years of work. Members of each of the sponsoring organization have contributed to the development of the draft. It updates and replaces the 2001 Guidelines for the Evaluation of Reserves and Resources.

The PRMS, approved by the SPE Board in 2007, is now in common use internationally within the petroleum industry. The guidelines provide additional information and examples on applying PRMS in reserves estimation. Together with the PRMS, it is designed to establish technically-based reserves and resources evaluation standard practices for the international petroleum industry.

View the draft Guidelines for Application of the Petroleum Resources Management System

7 thoughts on “NEW DATE: Submit Comments on PRMS Application Guidelines by 15 March 2011”

  1. I opened the document and took a quick look. Looks fairly impressive.

    The one thing I have noticed is in the reference table in the back that references to AD and chapter, e.g.,
    From page 180

    Discovered 2007 – 2.1.1 AD 2.22, 3.1, 4.17, 5.2, 7.3, 8.4

    do not seem to be correct.

    Reference to the AD is not clear. I asked Delores Hinkle if the “Guidelines for Application of the Petroleum Resources Management System”

    was the same as the referenced AD “Application Document” and her response was affirmative.

    A single and consistent reference name is appropriate.

  2. A second note after reading my first. I actually checked about 15 different references from the index, and in my previous note only indicated the one. All references are not correct.

  3. Excellent work, this is in fact a major improvement over previous version.
    I have the following comments:
    1. I do agree with the underlying principle stated in PRMS Section 9.1 “… reserves and resources quantities will be reported in terms of the sales products in their conditions as delivered from the applied development project at the custody transfer point”. However, recent comment from the SEC´s Staff indicate the contrary: “… all produced volumes should be included in the reserves estimates given the fact that flare, vented, sale, consume in operation – all these volumes reduce reserves.” How should we come around with this apparent contradiction in reconciling reserves for reporting purposes?
    2. Risk Service contract are very controversial for defining barrel entitlement. I would suggest leaving example given in previous version of the guideline where market price and service fee are clearly defined.
    Thanks for allowing this opportunity to provide comments.

  4. I believe that I have an article that would be of interest and show the need for more intercommunication between Science and Engineering. It has to do with determination of Porosity and Permeability in rock samples.

    If you are interested, I can develope the article.

    Edward Marks
    Past Chairman, Kalimantan Section.

  5. REFER TO SECTION 1.2. The document states that: “SPE Board rejected the inclusion of any discussion about probabilistic methods of reserves evaluation in the 1987 definitions”. If I remember well the Board approved the 1987 definitions as submitted by SPE Oil and Gas Reserves Committee . It was the Committee that decided not to include detailed norms and concepts relative to probabilistic estimations in the body of the document. Nevertheless the committee did recognize the use of probabilistic reserves estimations as is clearly stated in the PREAMBLE. I copy: “Also, there are no prohibitions on deriving reserves estimates assuming conditions other than those in the Definitions when the results are properly described. These specia1 reserves estimates may be entirely proper for risk assessment, planning, and economic eva1uations. This is particularly true in areas where probabilistic methods may be appropriate for eva1uating a wide range of potentia1 outcomes.”

    The knowledge and use of oil dates back to several thousand years. At the time of Greek historian Herodotus (2485-2425) BC who is also known as the father of history, oil was used mainly for medicinal purposes: as a healing balm or part of a concoction but never as fuel. In the course of several centuries that spanned the time of Herodotus till data the method of exploration, politics and use of oil has changed astronomically. In ancient times oil could gush out from national springs and scooped by the locates for medicinal use. But if the same should be the case in modern times, a high-tech drilling machine would be installed to drill hundreds of feet for the oil that would serve a multipurpose.

    Oil is known by several names: crude oil, black, gold, petroleum and Seneca oil. In what ever name that it is known oil consists of a varieties of properties some forms are black hence the name black gold while other are dark green some are highly viscous and others as light as kerosene. Over-all petroleum oil are a combination of hydrocarbons. The word petroleum dates back to Medieval Latin. It is a combination of two Latin words: “Petra” meaning rock or stone and “Oleum” which means oil.

    As mentioned earlier, oil could flow from natural spring and so by following that simple exploration method which could require only the keen eyes of an observer, the first oil well in record history was completed in Titusville in what is now Western Pennsylvania in the United States on August 28, 1859. A pair of Seneca, Indians, Edwin, L. Drake who owned the well’ and William Smith Aka “Uncle Billy” are credited with the 69.5 feet depth of well that not only struck oil but completed revolutionalized the petroleum industry. What did the Seneca India use the fifteen barrels that gushes out of the well on daily basis or the used it for? They use it for medicinal purposes like the ancients at the time of Herodotus.

    In a short period of fifteen years Seneca oil so named because of the Seneca Indians that started it all had become even more popular with more oil wells that sprang up and yielding more than 10milion barrel per annum. The are known as Titusville-Western Pennsylvania quickly boomed with oil activities and the modern oil industry was born.

    The industrial revolution that swept across Europe and America in the mid 18th and 19th centuries got the much needed fillip with the birth of the petroleum industry. Several industrial machines that run on petroleum products were developed fabricated and developed of special mention here would be the development of the internal combustion engine by Daimler-Benz of German which gave birth to the automobile industry. Today practically all forms of transportation cares, lories, buses, trains, ships as well as airplanes are powered by one form of petroleum product or the other.

    In addition to the Seneca oil field of Titusville-Pennsylvania, Texas and Oklahoma later became centers of US production as well. But at the end of World War II the US and indeed world oil demand had become an obsession. Consequently the US and the rest of the world turned to the middle East for oil needs as the world enters the high-tech and computer age. The middle East made-up of seventeen countries that stretch from Egypt to iran as well as its vast oil-fields were not enough to accommodate the ever increasing world demand for petroleum. In Africa countries such as Nigeria, Libya, Algeria, Gabon became part of the ever increasing oil exploration and drilling quite early in the last century. The list also include Latin American countries like Venezuela and more recently the former Portuguese colony Brazil.

    The greatest challenge in meeting the world’s petroleum energy needs however does not rest with the exploration and mining of oil or recent discovery of oil in Ghana and Brazil but more in conflict prevention or resolution as well as environmental protection. It is estimated that sixty percent of the world’s petroleum producing areas are vulnerable to conflicts and wars-wars that are fought for the control of the vast oilfields. Out of all the oil producing regions of the world, the most volatile is of course the middle East. It is a region that has a chilling score-cart of conflicts and wars. The Iraq invasion of Kuwait in the early 90s in-order to annex it and take control of its oil fields and the subsequent allied invasion of Iraq led by the US is just a reminder of the many conflicts in the region borne out of petroleum or petroleum related politics. In Africa let’s focus our searchlight on Nigeria. The nations oil industry was witnesses one of the most conflicting body and politicize era in the annals of the petroleum industry. Irrespective of whether one agrees with the claim or not, it has been established that the Nigerian civil War was predicted on oil. The break-away republic of Biafra had within its shores some 95% of the nations oil fields and so Biafra must get back on the rickety one Nigeria train. Year later, in the current political dispensation, a leading Northern political stalwart was to aver in a publication of one of the national dailies that if not for oil no one would have fired a single bullet at Biafra.

    The United States of America by virtue of its position as the leading world economy represent the axis on which global economy revolve. This by extension means that what affects the US economically could have ripples across the world. I suspect that it is in recognition of this assertion that the immediate past president George, W. Bush in one of his state of Union address acknowledge that nearly all the areas where the US source it’s petroleum needs across the world are volatile. Furthermore, Bush admitted without equivocation that with some twenty million barrels a day that is required to run the US economy, America is addicted to oil. So if America is addicted to oil, the world is inadvertently addicted as well.

    So from the foregoing and having praised the humble and peaceful origin of petroleum and its simple use to today’s chaotic exploration, mining and multipurpose use, why do I choose a career in the petroleum industry? The United States and by extension the global addiction of petroleum and its related products is the fundamental and motivating reason for myf career choice in the petroleum industry. It is worthy of note that addiction to anything either by an individual or the world at large cannot be without its hazards and losses. Therefore, I make a choice of career in the petroleum industry in order to assist in tackling the challenges of the industry.

    In Europe and America-Brazil inclusively a lot of research programme is on-going that is geared towards finding a less hazardous and environmentally friendly alternative to petroleum. For this reason the Bush administration not only voted millions of dollars into the research programmers but went a step further to sign a working and research agreement with the Brazilian government under Lutula Silva for the research and mass production of Bio-fuel that is made from leaf extracts and animal wastes. Since there are cars that already run on Bio-fuel in Europe and America, the commercial success of the product is only a matter of time as it gives out very little exhaust fumes that is free from carbon monoxide, the poisonous, colourless and odorless substance that accompany conventional exhaust fumes. What that amounts to would be a cleaner and fresher invigorating air for all that breaths.

    The plight of the rural oil producing communities in countries like Nigeria should be of importance to anyone whose choice of career is in the petroleum industry. These communities over the years have suffered neglect by both t he oil companies as well as the various levels of government especially the federal and state governments. Environmental devastation coupled with pollution as a result of oil spillage has been the lot of thee communities over the years. Little wonder that in 1994, the Ogoni community in South-East Nigeria erupted in protest over the graduate destruction of their land by oil prospecting firms notably Shell. The protest soon turned violent leading to the killing of some Ogoni leaders. The crime was the arrest of the Ogoni environmentalist and human rights activist Ken Saro-Wiwa and eight other who were later tried in a Kangaroo” court and hanged on Friday November 10,1995.

    The hanging of the Ogoni nine by the Abacha administration did not stem the tide of protests nor broker peace between the oil prospecting companies and their host communities. The situation went beyond Ogoni land, became an armed struggle that metamorphosed into the Niger Delta crisis Orchestrated by militant activities. The agenda of the militants include ransom induced kidnap of oil workers, seizure or bombing of oil installations-all of which jeopardize not only the economic well-being of the nation but her oscillating and fragile unity as well.

    In view of the foregoing and taking cognizance of the fact that a full-scale military operation in the Niger Delta would not only exacerbate the situation but would encourage strident calls for the break-up of the country, the Yaadua administration announced amnesty package to the militants just before the militants could become militigers.

    In conclusion, the gains losses and challenges of the petroleum industry cannot be over-emphasized nor fully expressed within the limits of this essay finally my most private reason for a career choice in the petroleum industry is to become a key player in the field and not to watch by the sideline. In other words, I would welcome a position into the petroleum ministry or a management stake in a petroleum company so as to effectively contribute my quota in improving and sanitizing the petroleum industry.

    A young graduate in Nigeria like his or her counter parts in some countries of the world is expected immediately on graduation to go for his or her youth service programme. The nature of the youth service varies from one country to another but the over-all objective is practically the same that of firing-up the patriotic instincts and positioning the graduate to face his or her career goals. The national youth service corps (NYSC) programme introduced by the Yakubu Gowon administration in 1975 shortly before his over throw is the umbrella body that handles youth service in Nigeria. Tried as it could the NYSC cannot meet the ever multiplying expectations of a young graduate in Nigeria especially in the areas of adequately preparing the graduate for career goals, job creation and gainful employment.

    It is obvious from the foregoing as it concerns Nigeria that the career goals of a young graduate can be adversely affected unless the graduate abide by the dictum which states that heaven help those who help themselves. As a result, a young graduate in Nigeria may have no option except to rely on his imaginative faculty to create job for himself what we call self employment. On a personal level, the job prospect can wait as I will choose to go for my masters and doctorate degrees. This venture I expect would not only broaden my chances of securing a job but would enhance and fine tune on a greater scale my knowledge and zeal to work and contribute my quota in the petroleum industry.

    A doctorate degree in petroleum engineering which I have my eyes on and as soon as it is in my kitty can enable me apply and work for a petroleum company or a related discipline anywhere in the world. Working for a petroleum company would broaden anyone’s practical knowledge of the industry as it would gradually replace the many years of theory and written works in the university. Gradually, my services with a petroleum company like anything else in the world would come to an end most especially on account of attainment of a specified retirement age. Suffice it to say as I would immediately and in co-operation with a couple of colleagues if necessary established a private oil prospecting and drilling company borne out of my working experience.

    As the company finds its footings, it is expected to contribute immensely in the area of job creation and employment of the ever increasing job seekers in the petroleum industry. The degree success recorded by the company would be the prime determinant of how far it would spread its tentacles into areas such as a petroleum research institute with such objectives as improving the quality of petroleum products by making them less hazardous and of greater use in addition to finding a better and less hazardous alternative to petroleum as obtained in Europe and America.

    It is worthy of note and highly inspirational that after a lengthy research programme in the rock blasting technology, the Swedish chemist and businessman Alfred Bernard Nobel was finally able to develop dynamite, an explosive that is used all over the world today in rock blasting activities. The development of dynamite by Nobel made him an instant success as his company Nitro Nobel raked in millions of Swedish Krona in a very short period of time.

    The success of Nitro Nobel and the vast millions at its command fired up a barrage of patriotic and philanthropic instincts in Alfred Nobel and compelled him to write a will instructing inter-alia that a percentage of the vast wealth should be used to assist anyone or institute in similar research efforts as his but are seriously constrained by lack of finance. He also added that would be beneficiaries must have evidence of seriousness in their programme. Nobel did not make his will public and since he hated lawyers and the legal profession, he did not make it a legal document either. Thus the will was found and became effective after his death. That was the humble beginning of the famed “Nobel prize” that ahs cut across all strata of human endeavour notably the arts, sciences and peace.
    Similarly, a success of my private petroleum company and research institute could follow a similar pattern laid down by Alfred Nobel. The award of scholarships to brilliant but poor students of petroleum engineering could be a good starting point. Added to this would be the building of such social amenities like hospitals, link roads and the provision of drinking water in rural oil producing communities that have been attenuated by government neglect borne out of wrong policies and implementation.

    From the foregoing, it is easy to conclude that what Alfred Bernard Nobel (1833-1896) the Swedish chemist and philanthropist bequeathed to mankind since 1901 in the form of Nobel prize is the major driving force of my career goals after graduation. Nobel’s example does not only inspire me but has also educated me on the need to live a visionary, focused and goal-driven life that posterity will be proud of.

    The term “Hobby” denote an activity that one is engaged in one’s spare-time either for pleasure or relaxation. It can also be either a private or social hobby. Significantly, all hobbies play a decisive role in shaping the physical, mental, economic, religious and social well-being of an individual.

    In consideration of my vocation in petroleum engineering as a student, a visit to oil installations such as a refinery or rig not only represent one of my social hobbies that affords me pleasure but also polishes my practical knowledge of the petroleum industry. A trip to an oil rig in particular which can be reached only by helicopter or boat rekindles one to an exhilarating love of adventure. Hunting is also one of my social hobbies that gives me a blend of pleasure and adventure.

    Religion plays a significant role in shaping the lives and characters of human beings. Therefore in consideration of my strict moral and religious upbringing, I adhere strictly to my religion the religion of the light and sound of God. So on weekends after service, nourish my private hobby by relaxing with a deeply inspiring and thought provoking books on religious especially the one’s that centre on the light and “Sound of God”. My favourite writers are Paul Twitchell and Harold Klemp.

    In the course of reading my favourite books and in contemplation, I love listening to a soft music in the background such classical music like that of Beethoven, Mozart, Valvadi, Pavaroti and the meditational and completive music of Jim-Reeves.

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