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.

All reserve and 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 includes the technical and economic factors that impact the likelihood of the commercial development of a project. 

Accumulations of discovered hydrocarbons are classified into two distinct categories: Reserves and Resources.  Upon initial discovery, accumulations are categorized as Resources; once a development project is sanctioned and approved, Resources are then categorized as Reserves.  BOEM and SPE-PRMS 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 of the remaining reserves becomes Developed Producing.  Should a project be abandoned, at any phase of development, any estimates of remaining hydrocarbon volumes would be re-classified to Contingent Resources.

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 become available.  Petrophysical data, well data, seismic data, and production data are continuously analyzed throughout the productive life of the field to improve the accuracy of the reserves estimate.

Methods used for estimating reserves and resources can be categorized into three groups: analog, volumetric, and performance.  BOEM commonly reports estimates using volumetric and performance methods.  BOEM has historically reported reserves estimates using a single “best estimate” based on known geological, engineering, and economic data.  While deterministic methods are still used in BOEM, the BOEM GOA region now utilizes probabilistic methods to account for uncertainties and variations in reservoir characteristics, providing a range of potential reserves.

For methodology specific to each OCS region, visit the regional reports under the Resources and Publications regional tabs.