PETROVIETNAM

PETROLEUM RESOURCE CLASSIFICATION,

DEFINITION AND GUIDELINES

Exploration and production Center (EPC)

Vietnam Petroleum Institute
Hanoi 10/2010
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Content
Petroleum Resources
Undiscovered resources
Discovered resources

Reserves
Definitions
Proved reserves(P1)
Unproved reserves
Probable reserves (P2)
Possible reserves (P3)
Reserves Status

Potential Recovery
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Petroleum resource

Discovered resource Undiscovered resources

Ultimate Potential
recovery recovery Hypothetical
Recovery (R1)
Cumulative
Reserves
production
Speculative
Recovery (R2)
Proved (P1) Unproved Proved (P4) Unproved

Probable (P2) Possible (P3) Probable (P5) Possible (P6)

 Vietnam resources classification system
The total estimated quantities of petroleum at a
specific date to be contained in, or that have been
produced from known accumulations, plus those
estimated quantities in accumulations yet to be
discovered.
The total estimated in-place
quantities of petroleum at a specific
date to be contained in
accumulations yet to be discovered.

Petroleum resource

Discovered resource Undiscovered resources

The undiscovered resources at a specific date to be contained

in mapped: unproven traps, undrilled plays, structures or deeper
reservoirs underlying productive fields where geological Hypothetical
conditions are believed to be favourable for the accumulation of Recovery (R1)
petroleum which if present may eventually be recoverable.

The undiscovered resources at a specific date estimated for Speculative

unmapped traps that may be existed hypothetically and where Recovery (R2)
geological conditions are believed to be favourable for the
accumulation of petroleum which if present may eventually be
recoverable.
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Discovered resource
Ultimate Potential
recovery recovery
Recovered and anticipated to be
commercially recoverable from known
accumulations at a specific date, under
existing economic condition, by
established operating practices and
under current government regulations.
The total estimated in-place quantities of
petroleum at a specific date to be contained in
known accumulations that have been penetrated
by a wellbore. They comprise those quantities
that are commercial and non-commercial
accumulations based on known technology under
specific economic conditions that are generally
accepted as being a reasonable outlook for the
future.
The discovered resources that are recoverable
but not producible at a specific date due to
economic, political, environmental or
technological reasons.

The resources estimation is based on geological model and probabilistic approach

such as Geological Analogy, Monte Carlo or any other similar method. Estimated
quantities are output in a range of Minimum, Expected, and the Maximum. The
Minimum and Maximum values mean a probability of at least 85% and 15%
respectively , that the estimated values will be recovered. Expected value (or Mode,
or Median etc as specified) means the area under the cumulative probability curve.
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Reserves
• Reserves are defined as the estimated remaining quantities of petroleum
anticipated to be commercially recoverable from known accumulations at a
specific date, under existing economic condition, by established operating
practices and under current government regulations.
• Reserves may be attributed to either natural reservoir energy, or improved
recovery methods. Improved recovery includes all methods for
supplementing natural reservoir energy and improve recovery efficiency to
increase ultimate recovery from the reservoir. Such methods includes
pressure maintenance, gas cycling, water-flooding, thermal methods,
chemical flooding and the use of miscible and immiscible displacement
fluids.
• Reserves do not include quantities of petroleum being held in inventory.
Here, inventory refers to quantities of petroleum that have been produced
at a specific date and subsequently stored in cylinders, tankers, salt
caverns, etc. and available for future use. Recycled or re-injected gas into
reservoir is not in inventory, but are legitimate gas reserves.
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Reserves
• If required for financial reporting or other special purposes, reserves
may be reduced for on-site usage and/or processing losses.

• Reserves estimates generally will be revised as reservoirs are

produced, as additional geological, geophysical and engineering
data become available, or as economic conditions change.

• Reserves in general are estimated using conventional methods such

as volumetric, reservoir performance (Simulation, material balance,
production decline etc) with parameters and output results
interpreted and displayed in statistic probability (Monter Carlo) or in
deterministic values or in other approach. In case of Minimum,
Expected and Maximum values are closed to each other or standard
deviation (d) is small enough, then both approaches are
recommended.
 Proved/probable/possible categories

(Half way concept)

Well A Well B Well C

Crest

Crest
Proved Gas P1/P4
Proved Gas P1/P4

GDT
Probable Gas P2/P5 GDT Possible Gas or Possible Oil
Probable Gas P2/P5
Possible Gas or Possible Oil P3/P6
P3/P6 Probable Oil P2/P5
WUT or SPILL OUT
Probable Oil P2/P5

Proved Oil P1/P4 OUT

Proved Oil P1/P4
ODT OWC
Probable Oil P2/P5

Possible Oil P3/P6

WUT or SPILL
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Proved reserves (P1)
The remaining quantities of petroleum which can be estimated with
“reasonable certainty” to be recoverable from known accumulations at a
specific date, under existing economic condition by established operating
practices and under current government regulations.
 
• In general, reserves are considered proved if commercial productivity of
the reservoir is supported by actual production test or conclusive
formation test.

• In certain instances, proved reserves may be assigned based on

electrical and other type of logs, formation test and/or core analysis that
indicate subject reservoir is:
 
a. Petroleum bearing and is analogous to reservoirs in the same area
that are producing and have demonstrated the ability to produce on
a formation test and
b. It is supported by conclusive surface samples.
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Proved reserves (P1)

• The area of a reservoir considered proved includes:
a. the area delineated by drilling defined by fluid contacts, if any;
b. the undrilled areas that can be reasonable judged as commercially
productive on the basis of available specific geological, geophysical
and engineering data.
• In the absence of data on fluid contacts, the lowest and highest known
structural occurrence of petroleum control the proved limit for each
petroleum accumulation:
a. In the case of oil, between Oil-Up-To (OUT) to Oil-Down-To (ODT).
b. In the case of gas, between structural crest and Gas-Down-To
(GDT).
 
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Proved reserves (P1)
• Proved reserves must have facilities to process and transport those
reserves to market that are operational at a specific date, or there is a
commitment or reasonable expectation to install such facilities in the future.
• In general, proved undeveloped reserves are assigned to undrilled
locations that satisfy the following conditions:
a. the locations are direct offsets to the wells that have indicated commercial
production from the objective formation.
b. It is reasonably certain that the locations are within the known proved
productive limits of the objective formation.
c. the locations conform to the existing well spacing regulations, if any.
d. it is reasonably certain that the location will be developed.
e. reserves from other undrilled locations are classified as proved undeveloped
only in these cases where interpretation of the data from wells indicated that the
objective formation is laterally continuous and contains commercially recoverable
petroleum at locations beyond direct offsets.
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Proved reserves (P1)

• Reserves that can be produced through the application of established
improved recovery methods are included in the proved classification when:
a. successful testing by a pilot project or favourable production or
pressure response of an installed program in that reservoir, or one in the
immediate area with similar rock and fluid properties, provides support for
the engineering analysis on which the project or program is based or
 b. it is reasonably certain the project will proceed.
• Reserves to be recovered by improved recovery methods that have yet to be
established through repeated commercially successful applications are
included in the proved classifications only:
a. after a favourable production response from subject reservoir from a
representative pilot or an installed program, where the response provides
support for the engineering analysis on which the project is based, and
 b. it is reasonably certain the project will proceed.
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Unproved reserves
Unproved reserves are defined based on geological, geophysical and
engineering data similar to that used in estimates of proved reserves,
but less certain to be recoverable than proved reserves. Unproved
reserves are estimated for undrilled areas of reservoir close to proved
reserves. Base on primary development plan and or extrapolated
forecasts resulting from current geological, technical and economic
conditions as well as different certainties of geological models of oil and
gas reservoirs, unproved reserves may sub-classified as probable or
possible to denote progressively decreasing uncertainty.
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 Probable reserves (P2)
 
Probable reserves are defined as the remaining quantities of petroleum which can
be estimated with “sufficient degree of certainty” to be recoverable in future years
from known accumulations.
Probable reserves for each petroleum accumulation based on the halfway principle
include:
• in the case of oil,
a.  from Oil-Up-To (OUT) to halfway between Oil-Up-To (OUT) and Gas-
Down-To (GDT) or structural crest if Gas-Down-To (GDT) has not been
established.
b.   from Oil-Down-To (ODT) to halfway between Oil-Down-To (ODT) and
Water-Up-To (WUT) or structural spill if Water-Up-To (WUT) has not been
established.
• in the case of gas,
a.   from Gas-Down-To (GDT) to halfway between Gas-Down-To (GDT)
and water-Up-To (WUT).
b.  from Gas-Down-To (GDT) to halfway between Gas-Down-To (GDT) and
Oil-Up-To (OUT) or
The above conditions may be overridden by some other geological, geophysical and
engineering data, of which the basis and assumptions must be clearly stated.
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Probable reserves (P2):

• Reserves anticipated to be proved by normal step-out drilling where sub-

surface control is inadequate to classify these reserves as proved.
• Reserves in formations that appear to be productive based on log
characteristics but that lack core data or conclusive tests and which are
not analogous to producing or proved reservoirs in the area.
• Incremental reserves attributable to infill drilling that otherwise could be
classified as proved but closer spacing had not been undertaken at the
time of the estimates.
• Reserves attributable to an improved recovery method which has been
established by repeated commercially successful applications when a
project or pilot is planned but not in operation and rock, fluid, and
reservoir characteristics appear favourable for commercial applications.
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Probable reserves (P2):

• Reserves in an area of formation that has been proved productive in other
areas of the field but subject area appears to be separated from the
proved area by faulting or geological barrier, and geological interpretation
indicates subject area is structurally higher than proved area. The above
conditions may be overridden by some other geological, geophysical and
engineering data, of which the basis and assumptions must be clearly
stated.
• Reserves attributable to a successful workover, treatment, retreatment,
change of equipment, or other mechanical procedure, where such
procedure has not been proved successful in wells exhibiting similar
behaviour in analogous reservoirs.
• Incremental reserves in a proved producing reservoir where an alternate
interpretation of performance or volumetric data indicate significantly more
reserves than can be classified as proved.
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Possible reserves (P3)

 
Possible reserves are defined as the remaining quantities of petroleum
which can be estimated with “low degree of certainty” to be recoverable in
future years from known accumulations.
• Possible reserves for the locations beyond probable areas of reservoir
and by half ways to spill point or structural crest:
• Either oil or gas
a. from halfway between Oil or Gas-Down-To (O/GDT) and Water
Up-To (WUT) or structural spill if Water Up-To (WUT) has not
been established, to Water-Up-To (WUT) or structural spill.

b. from halfway between Oil-Up-To (OUT) and structural crest to

structural crest.
• The above conditions may be overridden by some other geological,
geophysical and engineering data, of which the basis and assumptions
must be clearly stated.
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Possible reserves (P3)  

• Reserves suggested by structural and/or stratigraphic extrapolation beyond areas
classified as probable, based on geologic and/or geophysical interpretation.
• Reserves in formations that appear to be hydrocarbon bearing based on logs or cores
but may not be productive at commercial rates.
• Reserves attributable to an improved recovery method when a project or pilot is
planned but not in operation and rock, fluid, and reservoir characteristics are such that
a reasonable doubt exists that the project will be commercial.
• Incremental reserves attributable to infill drilling that are subject to technical
uncertainty.
• Reserves in an area of formation that has been proved productive in other areas of the
field but subject area appears to be separated from the proved area by faulting or
geological barrier, and geological interpretation indicates subject area is structurally
lower than proved area. The above conditions may be overridden by some other
geological, geophysical and engineering data, of which the basis and assumptions
must be clearly stated.
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Possible reserves (P3)  

• Incremental attributable to an alternative interpretation of performance or
volumetric data, i.e. hydrocarbon in-place parameters and/or recovery
factor indicate significantly more reserves that can be assigned to the
proved and probable categories.
• The portion that includes all the high-risk upside volumes such as:
 a. areas with limited seismic coverage.
 b. questionable reservoir continuity and quality.
 c. additional recovery from improved recovery processes.
 d. better average reservoir parameters.
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Reserves Status
 
 
• Developed reserves: defined as the estimated quantities of petroleum expected to
be recoverable from existing wells (including reserves behind pipe). Improved
recovery reserves are considered developed only after the necessary equipment
has been installed , or when the costs to do so are relatively minor. Developed
reserves may be sub-categorised as producing and non producing.

• Producing: Producing reserves are expected to be recoverable from completion

intervals open at a specific date, and producing. Improved recovery reserves are
considered to be producing only after an improved recovery project is in
operation.
 
• Non-Producing: Non producing reserves include shut-in and behind-pipe
reserves. In case where quantities behind pipe are deemed non-commercial, it
will then fall into the Potential Recovery category. Shut-in reserves are expected
to be recovered from completion intervals open at a specific date, but has not
started producing, or were shut in for market conditions or pipeline connection, or
were not capable of production for mechanical reasons, and the time when sales
will start is uncertain.
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  Reserves Status

• Undeveloped reserves are expected to be recovered:

• from new well on undrained portion of the reservoir, or
• from deepening of existing well to a different reservoir, or
• where relatively large expenditure is required to:
a. re-complete an existing well, or
b. install production or transportation facilities for primary or improved
recovery projects.
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Potential Recovery
 
 
The designations for proved, probable and possible categories in the Potential
recovery are P4, P5 and P6, respectively. The technical definitions for these
categories are the same as for reserves, except that they are not currently
producible at a specific date due to economic, political, environmental or
technological reasons.
 
Potential recovery may include:
 
• Accumulations being held in inventory such as marginal fields, relinquished fields,
fields under dispute, or reservoirs with inconclusive data.
 
• Accumulations that will probably be commercially recoverable in the near future/short
terms, under currently forecasted conditions but further evaluation work will be required
before they can qualified as Ultimate recovery. Examples are new discoveries
undergoing appraisal or fields under negotiation.

• Accumulations that have no plans for developments in the near future/short terms
because they are judged to be non-commercial under currently forecasted conditions
based on their size, location, technology requirements or economics.
 
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Potential Recovery

Non-producible reservoir due to:

a. adverse parameters such as very low or erratic porosity

development, low permeability, high pressure and geopressure
dissolved gas.
b. unfavourable petroleum parameters such as gravity and
viscosity.
c. extreme non hydrocarbon content, e.g. CO2 and H2S

Improved oil recovery (IOR) that changes characteristics of the fluid in

the reservoir through steam, gas, or chemical.
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