CRUDE OIL CLASSIFICATION AND BENCHMARKS
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in the estimated ultimate recovery for that accumulation should be
reduced.
The low estimate, best estimate, and high estimate of potentially recoverable volumes should reflect some comparability with
the reserves categories of proved reserves, proved plus probable
reserves, and proved plus probable plus possible reserves, respectively. While there may be a significant risk that sub-commercial
or undiscovered accumulations will not achieve commercial production, it is useful to consider the range of potentially recoverable
volumes independently of such a risk.
At some time in the future, resources may become reserves as a
result of improvements in recovery techniques which may either
make the resource accessible or bring about a lowering of the
recovery costs and render winning of the resource an economical
proposition. In addition, other uses may also be found for a commodity, and the increased demand may result in an increase in
price. Alternatively, a large deposit may become exhausted and
unable to produce any more of the resource thus forcing production to focus on a resource that is lower grade but has a higher
recovery cost.
Finally, peak oil is not the phenomenon of running out of oil. It is
the subsequent decline of the production rate of oil and is, in fact,
the point in time when the maximum rate of global crude oil recovery is reached, after which the rate of production enters a continuous decline phase. The concept is based on the observed production
rates of individual oil wells, and the combined production rate of a
field of related oil wells. The aggregate production rate from an oil
field over time appears to grow exponentially until the rate peaks
and then declines, sometimes rapidly, until the field is depleted. It
has been shown to be applicable to the sum of a nation's domestic
production rate, and is similarly applied to the global rate of petroleum production.
4.2.2 SEC Standards
The standards set by the Securities and Exchange Commission
(SEC) in the United States differ in certain material respects from
SPE standards. The principal technical difference is related to the
certainty of existence (i.e. proved or proven reserves).
Under the SPE standards, reserves in undeveloped drilling sites
that are located more than one well location from a commercial
119
in the estimated ultimate recovery for that accumulation should be
reduced.
The low estimate, best estimate, and high estimate of potentially recoverable volumes should reflect some comparability with
the reserves categories of proved reserves, proved plus probable
reserves, and proved plus probable plus possible reserves, respectively. While there may be a significant risk that sub-commercial
or undiscovered accumulations will not achieve commercial production, it is useful to consider the range of potentially recoverable
volumes independently of such a risk.
At some time in the future, resources may become reserves as a
result of improvements in recovery techniques which may either
make the resource accessible or bring about a lowering of the
recovery costs and render winning of the resource an economical
proposition. In addition, other uses may also be found for a commodity, and the increased demand may result in an increase in
price. Alternatively, a large deposit may become exhausted and
unable to produce any more of the resource thus forcing production to focus on a resource that is lower grade but has a higher
recovery cost.
Finally, peak oil is not the phenomenon of running out of oil. It is
the subsequent decline of the production rate of oil and is, in fact,
the point in time when the maximum rate of global crude oil recovery is reached, after which the rate of production enters a continuous decline phase. The concept is based on the observed production
rates of individual oil wells, and the combined production rate of a
field of related oil wells. The aggregate production rate from an oil
field over time appears to grow exponentially until the rate peaks
and then declines, sometimes rapidly, until the field is depleted. It
has been shown to be applicable to the sum of a nation's domestic
production rate, and is similarly applied to the global rate of petroleum production.
4.2.2 SEC Standards
The standards set by the Securities and Exchange Commission
(SEC) in the United States differ in certain material respects from
SPE standards. The principal technical difference is related to the
certainty of existence (i.e. proved or proven reserves).
Under the SPE standards, reserves in undeveloped drilling sites
that are located more than one well location from a commercial