The papers selected this year highlight some complex considerations and the importance of using all the tools provided by the industry resource classification systems to navigate projects through to viable and sustainable development reasonably and transparently for all stakeholders.
The year 2021 has seen improvement in the market fundamentals for the petroleum industry, and merger and acquisition activity has increased. Market volatility and project investment caution, however, are expected to continue as the world adjusts to the “new normal” of the societal, environmental, and economic effects of living with COVID-19 and the climate challenge. Pressure to address environmental, social, and governance (ESG) issues increasingly affects the commercial viability of projects and their corresponding chance of development. Further, entities face reputational, financial, and litigation risk from not maintaining high ESG standards.
The papers selected highlight some of these considerations and the importance of using all the tools provided by the industry resource classification systems to navigate projects through to viable and sustainable development reasonably and transparently for all stakeholders.
Paper SPE 203422 provides a systematic approach to gathering data consistently and benchmarking projects based on reservoir performance that allows efficient data mining to help identify opportunities. It also highlights the importance of appropriate analogs to underpin recovery potential and field development planning.
Paper SPE 206104 highlights the deterministic incremental method for resource evaluation, specifically that it is often difficult to reconcile the incremental method with the deterministic scenario method with forecasts for a different range of uncertainty and commercial projections for the same project. These differences should be mitigated by clearly defining the project that underpins the evaluation and applying principles from the SPE Petroleum Resources Management System (PRMS).
Paper SPE 206322 illustrates the challenges faced when combining reserves and resources management systems in a merger scenario that involves classified or evaluated projects in different ways. Pleasingly, it highlights the use of subclasses, recommended by the PRMS and other global classification systems and increasingly a standard practice. Caution should be taken to ensure consistency and alignment with the PRMS subclasses.
Governments globally are announcing net-zero targets and other initiatives for reaching sustainable development goals. Two recommended reading papers focus on the effect of carbon pricing and streamlining reporting. Paper SPE 205847 describes the new Petroleum Resource Specifications and Guidelines (PRSG) published as supporting documentation for the United Nations Framework Classification (UNFC). The UNFC system is unique in considering technical feasibility separately from economic, environmental, and social viability to provide greater transparency. The UNFC framework and PRSG can be used independently or in conjunction with other classification systems for individual projects and for comparisons between petroleum and other emerging energy projects.
Recommended Additional Reading
SPE 202458 What Does a Carbon Price Do to Your Reserves and Development Plans? by Daniel Lorng Wong, Gaffney Cline, et al.
SPE 203182 Intelligent Annual Reservoir Performance Reporting System i-ARPR—A Fascinating Journey From a Concept to Reality by Muhammad Navaid Khan, ADNOC, et al.
SPE 205847 Development of the Petroleum Resource Specifications and Guidelines (PRSG)—A Petroleum Classification System for the Energy Transition by Barbara Pribyl, Independent, et al.
Barbara Pribyl, SPE, has more than 30 years of experience as a geologist and in managing reserves and resources in the Australian and international oil and gas industry. Her most recent role was as reserves and resources manager for Santos. Pribyl’s professional focus has been on oil and gas reserve and resource classification, management, and reporting and developing guidelines and training and the coordination of reserve reviews and audits. She was a member of the SPE Oil and Gas Reserves Committee (OGRC) between 2014 and 2018 and is a current member of the OGRC Examples Subcommittee and the Petroleum Working Group of the United Nations Economic Commission for Europe Expert Group on Resource Management. Pribyl is also a Vincent Fairfax Fellow in Ethical Leadership and a member of the JPT Editorial Review Committee.
Greg Horton, SPE, is retired from Santos after 33 years of reservoir-management responsibilities and maintains an active role in improving the SPE Petroleum Resources Management System (PRMS). He holds an honors degree in civil engineering from Adelaide University. Horton was a member of the SPE Oil and Gas Reserves Committee from 2011 to 2014, is a member of the SPE PRMS Improvements Subcommittee, and serves on the JPT Editorial Review Committee. He can be reached at email@example.com.