Reserves / Contingent Resources / Commerciality - Part 131 May 2025 08:12
Starting with a few definitions:
Contingent Resources are those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from known accumulations, but which are not YET currently considered to be commercially recoverable due to one or more contingencies. Their commerciality depends on resolving these contingencies, and the potential for increased commerciality is linked to the maturity of the related projects.
In the context of oil and gas reserves, "1C" reserves refer to the most confident estimate of producible volumes, with a greater than 90% probability that the actual recovery will equal or exceed that quantity. This represents the lowest estimate, also known as the "low estimate," within a range of possible recovery scenarios. The 1C classification is part of the probabilistic method of estimating reserves, where different confidence levels (1C, 2C, 3C) are assigned to different estimated recovery volumes.
Proved reserves (1P)Proved reserves are those quantities of petroleum which can be estimated with reasonable certainty (more than 90 percent) to be commercially recoverable from known reservoirs and under current economic conditions and operating methods.
1P = Proved reserves with at least a 90% probability of being economically extracted.
2P = Proved + probable reserves with at least a 50% probability of being economically extracted.
3P = Proved + probable reserves with at least a 10% probability of being economically extracted.
1C = Contingent Resources: These are considered the most likely to be commercially recoverable, with a high degree of certainty, and are often referred to as "reserves". They represent the best estimate of the resources that are considered commercial based on current data and conditions.
2C = Contingent Resources: These have a better than 50% chance of being technically producible, but not yet considered 1C reserves. They are estimated to be potentially recoverable, but may be subject to various uncertainties or contingencies.
3C = Contingent Resources: These are estimated to have a significant chance (more than 10%, but less than 50%) of being technically producible, but are not yet considered 2C resources. They represent a lower level of certainty compared to 1C and 2C resources, and may require further development or changes in conditions to become commercially viable.
Prospective resources, in the context of oil and gas, refer to undiscovered hydrocarbon quantities that have a potential for recovery from undiscovered accumulations through future development projects. They are estimated quantities that may become recoverable based on geological studies, exploration, and the likelihood of both discovery and development.
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