As you will have realised from a recent mailing the votes to decide on the date for the 17th Congress have now been counted. The result was 43 members for and 2 against. This means that the Congress will be in 2002 and will take place on 1st to the 5th of September 2002. Future Congresses will revert to a 3 year cycle with the 18th Congress being in 2005.
As we are getting closer to the PC meeting in Calgary we have to start thinking about the 18th Congress in 2005. Can I remind member countries that submissions need to be received at the London office prefrabably before the end of February.
In december 1999 we sent out o all committees the latest draft of the work being carried out by Anibal Martinez in conjunction with the SPE. The following is the draft and please forward any comments to Anibal Martinez at Martinezan@pdvsa.com
PETROLEUM RESOURCES CLASSIFICATION AND DEFINITIONS SOCIETY OF PETROLEUM ENGINEERS (SPE) AND WORLD PETROLEUM CONGRESSES (WPC)
In March 1997, the Society of Petroleum Engineers (SPE) and the World Petroleum Congresses (WPC) approved a set of petroleum reserves definitions which represented a major step forward in their mutual desire to improve the level of consistency in reserves estimation and reporting on a worldwide basis. As a further development, the SPE and WPC recognized the potential benefits to be obtained by expanding the definitions to cover the entire resource base, including those quantities of petroleum contained in accumulations that are currently sub-commercial or that have yet to be discovered. These other resources represent potential future additions to reserves and are therefore important to both countries and companies for planning and portfolio management purposes.
In 1987, the WPC published its report “Classification and Nomenclature Systems for Petroleum and Petroleum Reserves”, which included definitions for all categories of resources. The WPC report, together with definitions by other industry organizations and recognition of current industry practice, provided the basis for the system outlined here.
Nothing in the following resource definitions should be construed as modifying the existing definitions for petroleum reserves as approved by the SPE/WPC in March 1997. As with unproved (i.e. probable and possible) reserves, the intent of the SPE and WPC in approving additional classifications beyond proved reserves is to facilitate consistency among professionals using such terms. In presenting these definitions, neither organization is recommending public disclosure of quantities classified as resources. Such disclosure is left to the discretion of the countries or companies involved. Any estimation of resource quantities for an accumulation or group of accumulations is subject to both technical and commercial uncertainties, and should, in general, be quoted as a range. In the case of reserves, and where appropriate, this range of uncertainty can be reflected in estimates for Proved Reserves (1P), Proved plus Probable Reserves (2P) and Proved plus Probable plus Possible Reserves (3P) scenarios. For other resource categories, the terms Low Estimate, Best Estimate and High Estimate are recommended.
As indicated in Figure 1, the Low, Best and High Estimates of potentially recoverable volumes should reflect some comparability with the reserve categories of Proved, Proved plus Probable and Proved plus Probable plus Possible, 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.
Where probabilistic methods are used, these estimated quantities should be based on methodologies analogous to those applicable to the definitions of reserves; therefore, in general, there should be at least a 90% probability that, assuming the accumulation is developed, the quantities actually recovered will equal or exceed the Low Estimate. In addition, equivalent probability values of 50% and 10% should, in general, be used for the Best and High Estimates respectively. Where deterministic methods are used, a similar analogy to the reserve definitions should be followed. As one possible example, consider an accumulation that is currently not commercial due solely to the lack of a market. Where a market is subsequently developed, and in the absence of any new technical data, the Proved Reserve estimate would be expected to approximate the previous Low Estimate.
The resource classification system is summarized in Figure 1 and the relevant definitions are given below. In general, resources are defined as including all quantities of petroleum which are estimated to be initially-in-place; however, some users consider only the estimated recoverable portion to constitute a resource. In these definitions, those quantities estimated to be initially-in-place are defined as such and the recoverable portions are defined separately. In any event, it should be understood that reserves constitute a subset of resources, being those quantities that are discovered (i.e. in known accumulations), recoverable, commercial and remaining.
TOTAL PETROLEUM INITIALLY-IN-PLACE
Total Petroleum-initially-in-place is those quantities of petroleum which are estimated to exist originally in naturally occurring accumulations. Total Petroleum-initially-in-place is, therefore, those quantities of petroleum which are estimated, on a given date, to be contained in known accumulations, plus those quantities already produced therefrom, plus those estimated quantities in accumulations yet to be discovered. Total Petroleum-initially-in-place may be subdivided into Discovered Petroleum-initially-in-place and Undiscovered Petroleum-initially-in-place, with Discovered Petroleum-initially-in-place being limited to known accumulations. It is recognized that all Petroleum-initially-in-place quantities may constitute potentially recoverable resources since the estimation of the proportion which may be recoverable can be subject to significant uncertainty and will change with variations in commercial circumstances and technological developments. A portion of those quantities classified as Unrecoverable may become recoverable resources in the future as commercial circumstances change or technological developments occur.
DISCOVERED PETROLEUM-INITIALLY- IN-PLACE
Discovered Petroleum -initially -in-place are those quantities of petroleum which are estimated, on a given date, to be contained in known accumulations, plus those quantities already produced therefrom. Discovered Petroleum -initially -in-place may be subdivided into Commercial and Sub-commercial categories, with the estimated potentially recoverable portion being classified as Reserves and Contingent Resources respectively, as defined below.
Reserves are defined as those quantities of petroleum which are anticipated to be commercially recovered from known accumulations from a given date forward. Reference should be made to the full SPE/WPC Petroleum Reserves Definitions for the complete definitions and guidelines. Estimated recoverable quantities from known accumulations which do not fulfil the requirement of commerciality should be classified as Contingent Resources, as defined below. The definition of commerciality for an accumulation will vary according to local conditions and circumstances and is left to the discretion of the country or company concerned. However, reserves must still be categorized according to the specific criteria of the SPE/WPC definitions and therefore proved reserves will be limited to those quantities that are commercial under current economic conditions, while probable and possible reserves may be based on future economic conditions. In general, quantities should not be classified as reserves unless there is an expectation that the accumulation will be developed and placed on production within a reasonable timeframe. In certain circumstances, reserves may be assigned even though development may not occur for some time. An example of this would be where fields are dedicated to a long-term supply contract and will only be developed as and when they are required to satisfy that contract.
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 currently considered to be commercially recoverable. Contingent Resources may include, for example, accumulations for which there is currently no viable market, or where commercial recovery is dependent on the development of new technology, or where evaluation of the accumulation is still at an early stage.
UNDISCOVERED PETROLEUM-INITIALLY -IN-PLACE
Undiscovered Petroleum -initially -in-place is those quantities of petroleum which are estimated, on a given date, to be contained in accumulations yet to be discovered. The estimated potentially recoverable portion of Undiscovered Petroleum-initially-in-place is classified as Prospective Resources, as defined below.
Prospective Resources are those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from undiscovered accumulations.
ESTIMATED ULTIMATE RECOVERY
Estimated Ultimate Recovery (EUR) is not a resource category as such, but a term which may be applied to an individual accumulation of any status/maturity (discovered or undiscovered). Estimated Ultimate Recovery is defined as those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from an accumulation, plus those quantities already produced therefrom.
Petroleum quantities classified as Reserves, Contingent Resources or Prospective Resources should not be aggregated with each other without due consideration of the significant differences in the criteria associated with their classification. In particular, there may be a significant risk that accumulations containing Contingent Resources or Prospective Resources will not achieve commercial production.
RANGE OF UNCERTAINTY
The Range of Uncertainty, as shown in Figure 1, reflects a reasonable range of estimated potentially recoverable volumes for an individual accumulation. For undiscovered accumulations (Prospective Resources) the range will, in general, be substantially greater than the ranges for discovered accumulations. In all cases, however, the actual range will be dependent on the amount and quality of data (both technical and commercial) which is available for that accumulation. As more data become available for a specific accumulation (e.g. additional wells, reservoir performance data) the range of uncertainty in EUR for that accumulation should be reduced
Uruguay 1999 Meetings
Dirk van der Meek with his wife Bep and Senior Vice President Ing. Carlos Bechelli
Uruguay NC Sec Mr Pedro Baridon seated with Mr William Zattar.
Left to right, Mr. Husain Al Sunaidi and Mr. Mansour Daftarian with SPC Secretary Lamia Elhouni
Pierce Riemer, Director General, flanked by Randy Gossen of CANOC and SPC Chair Dr. F Pradas Perez.
Punta del Este, Uruguay, was the meeting place for the WPC’s 1999 Annual General Meeting. From October 1st-5th the meetings of the SPC, CAC,DC and EB were held at the Conrad Resort and Casino Hotel, Punta del Este, hosted by the Secretary of the Uruguay National Committee Mr Pedro Baridon. WPC members were delighted to see the return of WPC President Ir Dirk van der Meer who attended
Several key issues concerning the Calgary Congress were discussed and finalised by the Scientific Programme Committee which met on October 1st. As well reviewing Forum Chair Progress Reports received to date, the Committee approved the up-to-date list of Forum and RFP Vice Chair nominations and agreed on increasing .
collaboration between the SPC Secretariat in London and CANOC to monitor all aspects of the Congress paper selection process. CANOC reported on its activities to the SPC, CAC and EB and encouraged National Committees to set up WPC-16 website accounts which are free of charge. The Chair of CANOC, Mr Jim Gray, also gave a report to the EB and underscored the need to get more involvement in the Congress from National Committees. After lengthy discussions of SPC matters the Committee agreed not to hold a further SPC meeting in Spring 2000 unless warranted by SPC Secretariat and CANOC. The Brazilian Organising Committee gave an extensive presentation of plans for the Rio Congress and expressed thanks to CANOC for the support shown towards the Brazil National Committee. At the meetings, the Brazilian Organising Committee outlined its strategy for holding the
17th WPC in 2002 which would ensure government support and avoid collision with other congresses:
2000 16th WPC Calgary 2001 18th WEC Argentina 2002 17th WPC Rio 2003 IGU Tokyo 2004 19th WEC Australia 2005 18th WPC (to be decided) 2006 IGU Amsterdam
WPC members, some of whom were in Uruguay for the first time, were treated to an excellent programme ofsocial events after the meetings were held, including dinners at the scenic Las Cumbres Restaurant, La Posta del Cangrejo, La Bourgogne and a barbecue at the famous Lapataia ranch.
The 14th – 17th February 2000 are the dates for the Institute of Petroleum’s annual IP week in London.
He Sheikh Yamani, speaks on the first day
This well-known event has been running for a number of years and a large attendance is expected. Speakers during the week include, He Sheikh Yamani, Mark Moody Stuart, He Dr Rilwanu Lukman, Patrick Thompson, Dr Richard Ward and Lee Raymond. The event starts on Monday 14th February with a one day conference entitled “Oil & Gas: An Industry Fit For the New Millennium”. The last two years have been momentous ones for the international oil and gas industry throughout the world and many topics will be addressed during the day. Volatile and frequently low oil prices, mergers amongst the largest oil companies, continuing privatisation in many parts of the world, ongoing cost reduction initiatives, uncertain recovery from economic problems in Asia, Russia and Latin America, a growing convergence of oil, gas and power markets and a revolution in the use of IT to manage complex businesses have all contributed to a period of unprecedented change in the structure and management of the oil industry and will be the subject of much discussion during this first day, chaired by Peter Ellis Jones.
On Monday afternoon there will be a press conference for Jim Gray, Chairman of the Canadian National Organising Committee (WPC), where he will promote the 16th Congress to the World media. Jim is also the main speaker on Tuesday evening at the IP London Branch Evening Discussion Meeting. The title of his presentation is “16th World Petroleum Congress: Why you should be there”. Canada will become the focus of the attention of the energy world when Calgary hosts the 16th World Petroleum Congress (WPC) in June 2000 and Jim will discuss the opportunities presenting themselves in exploration and development in Canada today and discuss progress on the 16th Congress.
Tuesday starts of with a seminar on Bunker Trading and Risk Management, which will examine some aspects of the fuel oil trading markets and compares the bunker market with the cargo market, particularly against the background of price risk management. Also on Tuesday there is a seminar entitled “Towards the Total Energy Company” This seminar will discuss issues in the wider energy sector. As with oil, large-scale mergers have occurred. In other cases companies have chosen, or been forced, to withdraw from some areas and focus on others. In what is potentially the most significant development for the long term there has been a convergence between the oil and utility sectors, towards the Total Energy Company, with major oil companies moving towards gas and power retailing, and utilities moving back up the value chain to establish midstream and upstream positions. In either case, power generation and energy trading are pivotal skills. All these topics will be debated in what promises to be an interesting day.
On Wednesday the 13th Oil Price Seminar and Exhibition on Coping with Oil Price Volatility – Liquidity in the Pricing Instruments is followed in the evening by the very popular Instituite Annual Dinner. Thursday is the last day of IP week and features an International Conference on “The Middle East – The Key to Global Oil Supply”. In recent years, oil and gas have been in abundant supply and consumer countries have been able to feel confident in security of supply. Yet, if we look at production and reserves statistics, it is immediately apparent that the rest of the world is producing its reserves relatively quickly and thus in the long term is becoming ever more dependent on the Middle East which now accounts for more than 70% of the world oil reserves. Any informed opinion on the future of oil supply or price must therefore include consideration of the oil, economic and political outlook for the countries in this region. This promises a facinating conclusion to a very busy week.
For further information on any aspect of IP week please contact Pauline Ashby, Conference Administrator at he Institute of Petroleum in London, (fax +44 (0) 171 255 1472
In November 1999 we updated the “In Brief” leaflet and issued it to all National Committees. This will, be re-printed after the 16th Congress to reflect the changes in officers and committees. We feel that it is a useful tool for promoting the WPC. If you have an comments, suggestions, corrections, or would like additional copies please forward your requests to the London office.
National Committee Involvement
It is important for the future success of the Congresses that the member countries do as much as they can within their own countries to publisissd the congress. This can be achieved in many ways. Some of the most popular are: Publishing the Congress on your website or providing links. Please link to www.wpc2000.com Advertising the event in any local newsletters. Distributing event details among members, local industry and government. Organising special events to promote business opportunities in Canada. Encouraging your colleagues to attend. Talking to you local press/media contacts Supplying information to relevant journals.
News from the Internet
Go to forum.wpc.2000.com - The latest documents for paper and poster presenters are now online.
Dates for the WPC Diary
2000 Spring meeting DC/CAC - 9-11th February 2000 11th - 15th June, 16th Congress, Calgary Canada.
Committee Meetings in Calgary
SPC Saturday June 10th EB Sunday June 11th PC Wednesday June 14th (Lunch 12, meeting 12.30) EB Friday June 16th
By the time you read this you should have received the new Directory. This will be updated very soon after the Calgary Congress. If you have any changes or suggestions please let us know as soon as possible.