UNFC Workshop 1Almaty, 10-11 December, 2009
RPSL
Brief History of Development of Resource Classification Systems
Jim RossRoss Petroleum (Scotland) Limited
UNFC Workshop 2Almaty, 10-11 December, 2009
RPSL
Resource Classification Systems
• 1928 – Petroleum classification of the Soviet Union• 1972 and 1975 – McKelvey Box• 1980 – USGS/Bureau of Mines resource classification system• 1997 – UNFC minerals resource classification• 1997 – NPD resource classification• 2000 – SPE/WPC/AAPG resource definitions and classification• 2001 – NPD resource classification• 2004 – UNFC integration of coal/petroleum/uranium• 2005 – Russian Federation (not yet implemented)• 2006 – CRIRSCO minerals classification template• 2007 – SPE/WPC/AAPG/SPEE Petroleum Resources Management
System (PRMS)• 2009 – Proposed revised UNFC (UNFC-2009)
UNFC Workshop 3Almaty, 10-11 December, 2009
RPSL
Resource Classification Systems
• 1928 – Petroleum classification of the Soviet Union• 1972 and 1975 – McKelvey Box• 1980 – USGS/Bureau of Mines resource classification system• 1997 – UNFC minerals resource classification• 1997 – NPD resource classification• 2000 – SPE/WPC/AAPG resource definitions and classification• 2001 – NPD resource classification• 2004 – UNFC integration of coal/petroleum/uranium• 2005 – Russian Federation (not yet implemented)• 2006 – CRIRSCO minerals classification template• 2007 – SPE/WPC/AAPG/SPEE Petroleum Resources Management
System (PRMS)• 2009 – Proposed revised UNFC (UNFC-2009)
UNFC Workshop 4Almaty, 10-11 December, 2009
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McKelvey Box (1972 and 1975)
• Two-dimensional system
– Degree of geological assurance
– Degree of economic feasibility
UNFC Workshop 5Almaty, 10-11 December, 2009
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McKelvey Box (1972 and 1975)
• Fundamental Principles
– Reserves are discovered (identified)
– Reserves are economically recoverable
UNFC Workshop 6Almaty, 10-11 December, 2009
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McKelvey Box (1972 and 1975)
Note: Slightly simplified representation from originals
IDENTIFIED UNDISCOVERED
ECO
NO
MIC
SUB
-EC
ON
OM
IC RESOURCES
Increasing degree of geologic assurance
Incr
easi
ng d
egre
e of
eco
nom
ic fe
asib
ility
RESERVES
Proved Probable Possible
UNFC Workshop 7Almaty, 10-11 December, 2009
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Resource Classification Systems
• 1928 – Petroleum classification of the Soviet Union• 1972 and 1975 – McKelvey Box• 1980 – USGS/Bureau of Mines resource classification system• 1997 – UNFC minerals resource classification• 1997 – NPD resource classification• 2000 – SPE/WPC/AAPG resource definitions and classification• 2001 – NPD resource classification• 2004 – UNFC integration of coal/petroleum/uranium• 2005 – Russian Federation (not yet implemented)• 2006 – CRIRSCO minerals classification template• 2007 – SPE/WPC/AAPG/SPEE Petroleum Resources Management
System (PRMS)• 2009 – Proposed revised UNFC (UNFC-2009)
UNFC Workshop 8Almaty, 10-11 December, 2009
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Norwegian Petroleum Directorate (1997)
• One-dimensional system
– Level of project maturity
– Also requires assessment of uncertainty
UNFC Workshop 9Almaty, 10-11 December, 2009
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Norwegian Petroleum Directorate (1997)
UNDISCOVEREDRESOURCES 9
Prospects 10Leads
11UnmappedResources
DISCOVEREDRESOURCES
6Development
not verylikely
5May be
developedin the long
term
4Early
planningphase
3Late
planningphase
8Possible future
measures toincrease RF
7New
Discoveries
2Approved
development
1In
production
0Ceased
production
RESERVES
UNFC Workshop 10Almaty, 10-11 December, 2009
RPSL
Resource Classification Systems
• 1928 – Petroleum classification of the Soviet Union• 1972 and 1975 – McKelvey Box• 1980 – USGS/Bureau of Mines resource classification system• 1997 – UNFC minerals resource classification• 1997 – NPD resource classification• 2000 – SPE/WPC/AAPG resource definitions and classification• 2001 – NPD resource classification• 2004 – UNFC integration of coal/petroleum/uranium• 2005 – Russian Federation (not yet implemented)• 2006 – CRIRSCO minerals classification template• 2007 – SPE/WPC/AAPG/SPEE Petroleum Resources Management
System (PRMS)• 2009 – Proposed revised UNFC (UNFC-2009)
UNFC Workshop 11Almaty, 10-11 December, 2009
RPSL
SPE/WPC/AAPG Petroleum Resource Classification System (2000)
• Two-dimensional system
– Level of Project Maturity• Characterised by the probability of the project achieving
production and hence revenue
– Range of Uncertainty• Characterised by the range of estimated recoverable
volumes from the project
This distinction is essential for portfolio analysis,decision-making and portfolio management
UNFC Workshop 12Almaty, 10-11 December, 2009
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McKelvey Box showingSPE/WPC/AAPG Terminology (2000)
DISCOVERED UNDISCOVERED
CO
MM
ERC
IAL
SUB
-CO
MM
ERC
IAL
RESERVES
PROSPECTIVERESOURCES
CONTINGENTRESOURCES
UNFC Workshop 13Almaty, 10-11 December, 2009
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SPE/WPC/AAPG Petroleum Resource Classification System (2000)
DISCOVEREDCOMMERCIAL
DISCOVEREDSUB-COMMERCIAL
UNDISCOVERED
Production
Range of Uncertainty
Proved(1P)
Proved +Probable
(2P)
Proved + Probable + Possible
(3P)
Low
Low
Best High
Best High
RESERVES
CONTINGENTRESOURCES
PROSPECTIVERESOURCES
Unrecoverable
UnrecoverableNote: Slightly simplified
representation from original
Exploration
Appraisal
Developmentand
Production
PROJECT MATURITY
UNFC Workshop 14Almaty, 10-11 December, 2009
RPSLPortfolio System (2001) based on
SPE/WPC/AAPG System
PROJECT STATUSOn Production
Under Development
Planned for Development
Development PendingDevelopment on Hold
Development not Viable
Prospect
Lead
Play
ProjectMaturity
HigherRisk
LowerRisk
DISCOVEREDCOMMERCIAL
DISCOVEREDSUB-COMMERCIAL
UNDISCOVERED
Production
Range of Uncertainty
RESERVES
CONTINGENTRESOURCES
Unrecoverable
Unrecoverable
1P 2P 3P
Low
Low
Best High
Best High
PROSPECTIVERESOURCES
UNFC Workshop 15Almaty, 10-11 December, 2009
RPSL
Resource Classification Systems
• 1928 – Petroleum classification of the Soviet Union• 1972 and 1975 – McKelvey Box• 1980 – USGS/Bureau of Mines resource classification system• 1997 – UNFC minerals resource classification• 1997 – NPD resource classification• 2000 – SPE/WPC/AAPG resource definitions and classification• 2001 – NPD resource classification• 2004 – UNFC integration of coal/petroleum/uranium• 2005 – Russian Federation (not yet implemented)• 2006 – CRIRSCO minerals classification template• 2007 – SPE/WPC/AAPG/SPEE Petroleum Resources Management
System (PRMS)• 2009 – Proposed revised UNFC (UNFC-2009)
UNFC Workshop 16Almaty, 10-11 December, 2009
RPSL
Norwegian Petroleum Directorate (2001)
UNDISCOVEREDRESOURCES Prospects Leads and unmapped
resources
Inproduction
RESERVES
Licensees have
decided to recover
Approveddevelopment
and operation
plan
Sold and delivered petroleum
Historical Production
CONTINGENTRESOURCES
New discoveries that have not been
evaluated
Developmentnot very
likely
Recovery likely, but
not clarified
In theplanning
phase
Possible futuremeasures to
improve the recovery factor
UNFC Workshop 17Almaty, 10-11 December, 2009
RPSL
Resource Classification Systems
• 1928 – Petroleum classification of the Soviet Union• 1972 and 1975 – McKelvey Box• 1980 – USGS/Bureau of Mines resource classification system• 1997 – UNFC minerals resource classification• 1997 – NPD resource classification• 2000 – SPE/WPC/AAPG resource definitions and classification• 2001 – NPD resource classification• 2004 – UNFC integration of coal/petroleum/uranium• 2005 – Russian Federation (not yet implemented)• 2006 – CRIRSCO minerals classification template• 2007 – SPE/WPC/AAPG/SPEE Petroleum Resources Management
System (PRMS)• 2009 – Proposed revised UNFC (UNFC-2009)
UNFC Workshop 18Almaty, 10-11 December, 2009
RPSL
CRIRSCO* Minerals Classification Template (2006)
• Two-dimensional system
– Degree of geological knowledge and confidence
– Consideration of “modifying factors” (non-geological issues, both technical and commercial)
* Committee for Mineral Reserves International Reporting Standards
UNFC Workshop 19Almaty, 10-11 December, 2009
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CRIRSCO classification template
MINERALRESOURCES
INFERRED
INDICATED
MEASURED
EXPLORATIONRESULTS
Incr
easi
ng le
vel o
f geo
logi
cal
know
ledg
e an
d co
nfid
ence
Consideration of mining, metallurgical, economic, marketing, legal, environmental,
social and governmental factors(the “Modifying Factors”)
PROVED
PROBABLE
MINERALRESERVES
UNFC Workshop 20Almaty, 10-11 December, 2009
RPSL
Resource Classification Systems
• 1928 – Petroleum classification of the Soviet Union• 1972 and 1975 – McKelvey Box• 1980 – USGS/Bureau of Mines resource classification system• 1997 – UNFC minerals resource classification• 1997 – NPD resource classification• 2000 – SPE/WPC/AAPG resource definitions and classification• 2001 – NPD resource classification• 2004 – UNFC integration of coal/petroleum/uranium• 2005 – Russian Federation (not yet implemented)• 2006 – CRIRSCO minerals classification template• 2007 – SPE/WPC/AAPG/SPEE Petroleum Resources Management
System (PRMS)• 2009 – Proposed revised UNFC (UNFC-2009)
UNFC Workshop 21Almaty, 10-11 December, 2009
RPSL
SPE-PRMS (2007)
DISCOVEREDCOMMERCIAL
DISCOVEREDSUB-COMMERCIAL
UNDISCOVERED
Production
Range of Uncertainty
RESERVES
CONTINGENTRESOURCES
PROSPECTIVERESOURCES
Unrecoverable
UnrecoverableNote: Slightly simplified
representation from original
1P 2P 3P
1C
Low
3C
Best High
2C
Incr
easi
ng C
hanc
e of
Com
mer
cial
ity
UNFC Workshop 22Almaty, 10-11 December, 2009
RPSL
SPE-PRMSProject Maturity Sub-classes
DISCOVEREDCOMMERCIAL
DISCOVEREDSUB-COMMERCIAL
UNDISCOVERED
Production
Range of Uncertainty
RESERVES
CONTINGENTRESOURCES
Unrecoverable
Unrecoverable
1P 2P 3P
1C
Low
2C 3C
Best High
PROSPECTIVERESOURCES
Project Maturity Sub-classesOn Production
Approved for Development
Justified for Development
Development PendingDevelopment Unclarified or On Hold
Development not Viable
Prospect
Lead
Play Incr
easi
ng C
hanc
e of
Com
mer
cial
ity
Note: Slightly modified representation from original
UNFC Workshop 23Almaty, 10-11 December, 2009
RPSL
Resource Classification Systems
• 1928 – Petroleum classification of the Soviet Union• 1972 and 1975 – McKelvey Box• 1980 – USGS/Bureau of Mines resource classification system• 1997 – UNFC minerals resource classification• 1997 – NPD resource classification• 2000 – SPE/WPC/AAPG resource definitions and classification• 2001 – NPD resource classification• 2004 – UNFC integration of coal/petroleum/uranium• 2005 – Russian Federation (not yet implemented)• 2006 – CRIRSCO minerals classification template• 2007 – SPE/WPC/AAPG/SPEE Petroleum Resources Management
System (PRMS)• 2009 – Proposed revised UNFC (UNFC-2009)
UNFC Workshop 24Almaty, 10-11 December, 2009
RPSL
UNFC-2009 Principles
• Three-dimensional system
– Economic and social viability (E axis)
– Field project status and feasibility (F axis)
– Geological knowledge (G axis)
UNFC Workshop 25Almaty, 10-11 December, 2009
RPSL
UNFC-2009 Principles
Feasibility axis
Geologicalaxis
Economicaxis
UNFC Workshop 26Almaty, 10-11 December, 2009
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UNFC-2009
F4
G4G3G2
CategoriesCriteriaAxis
G1
F3F2F1E3
E2
E1
Geological knowledge
Field project status and feasibility
Economic and social viability
G-axis
F-axis
E-axis
UNFC Workshop 27Almaty, 10-11 December, 2009
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UNFC-2009
UNFC-2009 categories and examples of classes
UNFC Workshop 28Almaty, 10-11 December, 2009
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UNFC-2009 (abbreviated version)
443Additional quantities in place associated with potential deposits
433Exploration
Projects
Potential future recovery by successful exploration
activities
1, 2, 343Additional quantities in place associated with known deposits
1, 2, 323Non-Commercial
Projects
1, 2, 322Potentially Commercial
ProjectsPotential future recovery by contingent
development projects or mining operations
1, 2, 311Commercial
Projects
Future recovery by commercial development
projects or mining operations
GFE
CategoriesClass
Non-sales Production
Sales ProductionExtracted
Tota
l com
mod
ity in
itial
ly in
pla
ce
UNFC Workshop 29Almaty, 10-11 December, 2009
RPSL
Alignment of Systems
UNFC-2009 CRIRSCO (minerals) SPE-PRMS (petroleum)
Commercial Projects
Mineral Reserves Reserves
Potentially Commercial
Projects Mineral
Resources
Non-Commercial Projects Not Defined
Contingent Resources
Kno
wn
Dep
osit
Additional quantities in place Not Defined Unrecoverable
Exploration Projects
Exploration Results
Prospective Resources
Pote
ntia
l D
epos
it
Additional quantities in place Not Defined Unrecoverable
UNFC Workshop 30Almaty, 10-11 December, 2009
RPSL
Conclusions
• Many different classification systems and reserve/resource definitions have been developed
• Some use the same terminology, but are based on different specifications and guidelines– e.g. Proved reserves
• Clear trend towards project-based systems– Provides linkage to business processes and decision-making
• UNFC can provide an “umbrella” classification system– Provides linkage between other systems