Approbation of new Russian classification of oil and gas reserves and resources

Category Other
Group GSI.IR
Location International Geological Congress,oslo 2008
Author Gert, A.A.; Volkova, Kseniya; Melnikov, Pavel; Zhukov, Konstantin
Holding Date 20 September 2008

The new Classification of Oil and Gas Fuel Reserves and Resources (hereafter referred to as Classification) was accepted in 2005. In April 2007 the Methodical Recommendations on its Application was approved. The paper illustrates early results of the Classification,s approbation by a multi-formation oil-and-gas field of the undistributed fund of mineral resources in the south of East Siberia.
In addition to previous categorization of reserves and resources by the level of geological knowledge, the Classification is based on grouping oil and gas reserves and resources by the economic appraisal of their efficiency. The main economic criterion for identifying groups of oil and gas reserves and resources is the Net Present Value (NPV) at the discount of 10%, which would result from the exploitation of a field or formation under exploitation. The Internal Rate of Return (IRR) may be used as an accessory index. According to the Classification recoverable reserves (resources) are a predicted volume of oil and gas production during a revenue producing life of fields (formations).
The field to be evaluated is in the region without transportation infrastructure and marketing outlets. However, the East Siberia – Pacific Ocean pipeline system calling for oil transportation from fields of Eat Siberia and the Republic of Sakha (Yakutia) has been currently constructing, and the Eastern Gas Program has been approved.
All stages of the reserves development – beginning with geological exploration and ending with the field abandonment – were subjected to economic appraisal. Economic efficiency was calculated taking into account the oil price fixed for the RF budget and present wholesale prices of gas fixed by the RF Federal Tariff Service. The calculations show that oil and gas reserves of the field under consideration are Commercial reserves Potential economic.
The Classification,s approbation allow to say following result. From the above, it follows that the estimation of recoverable oil reserves should be complemented by detailed substantiation of recoverable gas reserves. There are no justified prerequisites for a decrease in recoverable oil reserves. Furthermore, international co-operation will not require any refinements while on the subject of recoverable reserves. Doubtless, the change-over to the new classification will take a lot of time and efforts, call for working out a number of documents regulating estimation and assessment of reserves, geological studies and development of hydrocarbon fields, a new form and procedure of administration of the State balance of oil and gas reserves. It is necessary to think over in detail administrative questions concerning the change-over to the new Classification till 2009.