Recoverable reserves refer to the portion of the “Original Oil In Place” (OOIP) or “Original Gas In Place” (OGIP) that can be technically and economically extracted given current technological capabilities and market conditions. These reserves are distinguished from total reserves, which include quantities that are not currently feasible to extract.
Technical and Economic Feasibility
Technical Feasibility
Technical feasibility refers to the existing technology that can be employed to extract oil and gas. This includes drilling techniques, extraction methods, and geological assessments. Advances in technology, such as hydraulic fracturing and horizontal drilling, can increase the amount of recoverable reserves.
Economic Feasibility
Economic feasibility evaluates whether the extraction of reserves is viable at prevailing market prices. This is influenced by operational costs, which include equipment, labor, and compliance with environmental regulations. Market prices of oil and gas fluctuate, impacting the economically recoverable portion of the reserves.
Types of Reserves
Proved Reserves
Proved reserves are quantities of oil and gas that geological and engineering data demonstrate with reasonable certainty to be recoverable under existing economic and operating conditions. Proved reserves are further subdivided into proved developed reserves and proved undeveloped reserves.
Proved Developed Reserves
These are reserves that can be expected to be recovered through existing wells with existing equipment and operating methods.
Proved Undeveloped Reserves
These are reserves expected to be recovered from new wells on undrilled acreage or from existing wells where significant expenditure is required.
Probable and Possible Reserves
Probable and possible reserves, often referred to as unproved reserves, are less certain than proved reserves but are considered likely and possible to be recovered, respectively.
Special Considerations
Reserve Estimation Techniques
Different methods are used to estimate recoverable reserves, including volumetric analysis, material balance, and reservoir simulation. These methods help in determining the exploitable quantity of reserves:
- Volumetric Analysis: Estimates reserves based on the geological and physical properties of the reservoir.
- Material Balance: Considers the production data and pressure changes over time to estimate reserves.
- Reservoir Simulation: Uses complex computational models to simulate reservoir behavior and predict future production.
Impact of Technological Advancements
Technological advancements can significantly alter the landscape of recoverable reserves. Enhanced oil recovery (EOR) techniques, such as CO2 injection, thermal recovery, and chemical flooding, have enabled the extraction of additional reserves that were previously considered technically unrecoverable.
Historical Context
The concept of recoverable reserves has evolved over the decades as extraction technologies and market dynamics have changed:
- Early 20th Century: Limited technology constrains recoverability.
- Mid 20th Century: Introduction of advanced drilling techniques.
- Late 20th Century to Present: Integration of digital technology and enhanced recovery methods.
Applicability
Understanding recoverable reserves is essential for:
- Energy Companies: Strategic planning and investment decisions.
- Economists: Impact analysis on energy supply and market stability.
- Regulators: Formulating policies and regulatory frameworks.
- Investors: Assessing the potential return on investment in energy projects.
Comparisons and Related Terms
Total Reserves
Refers to the entire quantity of hydrocarbons initially in place, regardless of current extractability.
Contingent Resources
Quantities of petroleum estimated to be potentially recoverable but not yet considered mature enough for commercial development due to contingencies.
Petroleum Resources Management System (PRMS)
A system developed by the Society of Petroleum Engineers (SPE) to classify and evaluate petroleum reserves and resources.
FAQs
What factors influence the classification of recoverable reserves?
How do market prices affect recoverable reserves?
What is the role of government regulations in recoverable reserves?
References
- Society of Petroleum Engineers, Petroleum Resources Management System.
- International Energy Agency, World Energy Outlook.
- US Energy Information Administration, Annual Energy Review.
Summary
Recoverable reserves are a critical concept in the energy industry, representing the portion of oil and gas that can be technically and economically extracted under current conditions. Understanding these reserves requires knowledge of both geological assessments and market dynamics, with technological advancements continually shifting what is deemed recoverable. This term is vital for energy companies, economists, regulators, and investors, ensuring informed decision-making and strategic planning in the volatile landscape of energy resources.
