Classification and Methodology for Reserves Calculations

BOEM’s   classification system is closely aligned with the Petroleum Resources Management System (SPE-PRMS) sponsored by the Society of Petroleum Engineers, the American Association of Petroleum Geologists, the World Petroleum Council, and the Society of Petroleum Evaluation Engineers (SPEE, 2007).  BOEM has modified the terminology of some categories and sub-classes to meet its program requirements.  The relations between various categories of resources as classified by BOEM can be better understood from Figure 1. 

BOEM resource classification

Figure 1:  BOEM resource classification

All resource estimates involve some degree of uncertainty. One component of uncertainty depends on the amount of reliable geologic and engineering data available at the time of the estimate and the interpretation of these data. The second component is the technical and economic factors that impact the likelihood of the commercial development of a project. 

An important step in the categorization of resources is the identification of a development project.  This identification marks the categorization of a discovered resource to a reserve.  SPE-PRMS and BOEM define Reserves as those quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions.  Reserves must further satisfy four criteria: They must be discovered, recoverable, commercial, and remaining (as of a given evaluation date) based on the development project(s) applied.

At the point in time a discovery is made, the identified accumulation of hydrocarbons is classified as a Contingent Resource, since a development project has not yet been identified. When the lessee makes a formal commitment to develop and produce the accumulation, it is classified as Reserves Justified for Development. During the period when infrastructure is being constructed and installed, the accumulation is classified as Undeveloped Reserves. After all necessary production equipment is in place and production of the accumulation has begun, the status becomes Producing Reserves. BOEM commonly reports reserves as proved plus probable (2P) estimates.  Should a project be abandoned, at any phase of development, any estimates of remaining hydrocarbon volumes could be re-classified to Contingent Resources. 

Methods used for estimating resources can be categorized into three groups: analog, volumetric, and performance. The Office of Resource Evaluation commonly reports estimates using volumetric and performance methods.  Reserve estimates are commonly reported deterministically, providing a single “best estimate” based on known geological, engineering, and economic data. When a field is in the Contingent Resource category, often geophysical mapping and limited well data are the basis for defining reservoir limits and the associated resource estimate. Commonly these estimates are reevaluated once a field is moved into the reserve category and more data becomes available. Well logs, well field data, seismic data, and production data are continuously analyzed throughout the productive life of the field to improve the accuracy of the resource estimate.

Resource estimates are commonly prepared for a range of resources both discovered and undiscovered. These evaluations include:

  • Mapping and evaluating new fields;
  • Evaluating discoveries that have not yet qualified as fields;
  • Providing detailed analog field studies in support of lease sale prospect evaluations;
  • Placing new producible leases in fields and determining the field limit;
  • Maintaining the reserves inventory database by adding new completions to existing fields;
  • Enhancing the BOEM National Assessment as new pay sands in fields are identified;
  • Worst Case Discharge calculations and reviews

The Reserve Inventory Program estimates bring additional benefits. As the Office of Resource Evaluation prepares and reevaluates the various resource estimates, a large database of subsurface information is accumulated. This information is in both digital and paper records. This information is commonly shared with other sections in BOEM and other DOI bureaus such as BSEE. The Reserves database is mined for research at universities and used by other governmental departments, such as cooperative efforts with the Energy Information Administration (EIA) of the Department of Energy.