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PETROLEUM TECHNOLOGY, ECONOMICS, AND POLITICS
producing well may be classified as proved reserves if there is reasonable certainty that they exist. However, under SEC standards,
the existence of the reserves must be demonstrated with certainty
before they may be classified as proved reserves.
Proved reserves are the only type of reserves that the Securities
and Exchange Commission allows oil companies to report to investors. Companies listed on U.S. stock exchanges must substantiate
their claims, but many governments and national oil companies do
not disclose verifying data to support their claims. The practice of
reporting only proved reserves can lead to a strong reserve growth,
as 90% of the annual reserves oil addition come from revisions of old
fields, showing that the assessment of the fields was poorly reported.
This reserve growth of conventional oil reserves is often (sometime
wrongly) attributed to technological progress. Technical data, on
which development decisions are taken, exist but they are generally
held to be confidential and not for general dissemination.
Furthermore, under the SEC standards, oil in reservoirs may
not be classified as proved reserves if they will be recovered after
the expiration of a current license period unless the license holder
has the right to renew the license and there is a demonstrated history of license renewal. However, under the SPE standards, proved
reserves are projected to the economic production life of the evaluated fields.
Accordingly, information relating to estimated proved crude oil
reserves under SEC standards is not necessarily indicative of information that would be reported under SEC standards in an offering
document registered with the SEC. In addition, SEC standards do
not permit the presentation of reserves other than proved reserves.
Under the SEC regulations, proved oil are the estimated quantities of crude oil, which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years
from known reservoirs under existing economic and operating
conditions, including prices and costs as of the date the estimate is
made. Furthermore, reservoirs are considered proved if economic
producibility is supported by either actual production data or a
conclusive formation test.
Reserves that can be produced economically through application of improved recovery techniques, such as fluid injection,
are included in the proved classification when successful testing
by a pilot project, or the operation of an installed program in the
PETROLEUM TECHNOLOGY, ECONOMICS, AND POLITICS
producing well may be classified as proved reserves if there is reasonable certainty that they exist. However, under SEC standards,
the existence of the reserves must be demonstrated with certainty
before they may be classified as proved reserves.
Proved reserves are the only type of reserves that the Securities
and Exchange Commission allows oil companies to report to investors. Companies listed on U.S. stock exchanges must substantiate
their claims, but many governments and national oil companies do
not disclose verifying data to support their claims. The practice of
reporting only proved reserves can lead to a strong reserve growth,
as 90% of the annual reserves oil addition come from revisions of old
fields, showing that the assessment of the fields was poorly reported.
This reserve growth of conventional oil reserves is often (sometime
wrongly) attributed to technological progress. Technical data, on
which development decisions are taken, exist but they are generally
held to be confidential and not for general dissemination.
Furthermore, under the SEC standards, oil in reservoirs may
not be classified as proved reserves if they will be recovered after
the expiration of a current license period unless the license holder
has the right to renew the license and there is a demonstrated history of license renewal. However, under the SPE standards, proved
reserves are projected to the economic production life of the evaluated fields.
Accordingly, information relating to estimated proved crude oil
reserves under SEC standards is not necessarily indicative of information that would be reported under SEC standards in an offering
document registered with the SEC. In addition, SEC standards do
not permit the presentation of reserves other than proved reserves.
Under the SEC regulations, proved oil are the estimated quantities of crude oil, which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years
from known reservoirs under existing economic and operating
conditions, including prices and costs as of the date the estimate is
made. Furthermore, reservoirs are considered proved if economic
producibility is supported by either actual production data or a
conclusive formation test.
Reserves that can be produced economically through application of improved recovery techniques, such as fluid injection,
are included in the proved classification when successful testing
by a pilot project, or the operation of an installed program in the