Volume 2, Issue
1
In this Issue:
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Volume 2, Issue
1 In this Issue: |
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From the Chairman Cheryl R. Collarini, P.E. | |||
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The head of the MMS, Johnnie Burton, spoke in Houston last month, and
what a terrific speaker she is! Her remarks included telling the audience,
full of energy company employees, how bad we are…..at telling the true
story about how good we are! Good oil stories aren't media events. So, we
really need to toot our own horn. And what better place to start than
right here at home? Tell your children and grandchildren! Crude oil is important to our way
of life. It is used to make gasoline and ink, bubble gum and crayons,
football helmets and Barbie dolls and more. In fact, crude oil is used to
make more than 3,000 products, including heart valves and other
life-saving medical supplies. Life as we know it in the U.S. today would
be very different, and difficult, without crude oil and its products. Tell your families! The United States produces only about 45% of the
oil we consume. We import oil from many countries around the world, half
of them belonging to OPEC. Some of those countries don't like Americans
very much. The US Strategic Petroleum Reserve has enough oil to replace
OPEC imports for about 100 days. That's it! We need a healthy domestic
industry to make up for a potentially dramatic shortfall. This is about
freedom and security as well as economics. |
Tell your neighbors! The oil industry alone employs more than 300,000 workers in the United States. That's a lot of families supported by our industry but a small percentage of the number employed only 20 years ago. Technology-led efficiencies and higher imports have caused many people to leave the industry to do other things. "Big Oil" is composed of people who suffer through economic downturns just like farmers and airline employees. Tell your friends! We all breathe the same air and drink the same water. Just like better informed people smoke less than they did years ago, our oil industry is more educated, more careful, with more rules in place than ever before. We know a short disruption caused by pipeline construction results in a less vulnerable transportation system than tankers on the open seas. We see the deer and the antelope play around the Alaska pipeline. We can find and deliver oil and gas safely and in harmony with the environment. Why don’t we say it? Maybe we think everyone knows. But they don’t. And people listen to those who speak the loudest, most often, and with seemingly great authority. In the absence of facts, people will listen to anyone who is talking. Let’s be the ones to tell the story. It is a great story to tell. Sincerely,  | ||
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Upstream News
Classifications: Definitions Revisited Companies need reserve estimates for a variety of reasons, such as investors and government regulation and the needs of financial institutions. However, reserves are estimated, not determined, so there is always uncertainty involved; our industry has developed the classifications proved, probable, and possible to indicate the degree of uncertainty in the reserve estimates.To maintain consistency among reserve estimators, it is necessary to define exactly what we mean when we say proved reserves. In the US, there are two sets of definitions commonly used. The ones used by most publicly owned companies are issued by the Securities and Exchange Commission (SEC). Privately owned companies may use the definitions jointly issued by the Society of Petroleum Engineers and the World Petroleum Congress (SPE/WPC). The SEC defines only proved reserves, while the SPE/WPC defines all three classifications. The definitions for proved reserves are similar but do have significant differences. Due to the very nature of reserve estimation, neither of these definitions covers all possible situations. The judgement of the estimator is an important element in each reserve estimate. In the next newsletters, we will address reserve classifications and the issues associated with them. In this issue, we will review the reserve classifications and their subcategories. We will also discuss "reasonable certainty", a term in the definition of Proved Reserves that is interpreted widely within our industry. RESERVE CLASSIFICATIONS Our industry has adopted two major reserve classifications of reserves, Proved and Unproved, with two sub classifications for the unproved reserves, Probable and Possible. There are two methods of estimating reserves, called deterministic and probabilistic. Using the deterministic methods, we report three major reserve classifications, Proved, Probable, and Possible. Using probabilistic methods, the similar classifications are Proved (1P), Proved plus Probable (2P), and Proved plus Probable plus Possible (3P).In addition to the major classifications, we use two categories to define the status of reservoirs, Developed or Undeveloped, and we further categorize Developed as Producing or Non-producing. Developed non-producing reserves may be referred to as "Shut-in" or "Behind Pipe." PROVED RESERVES AND REASONABLE CERTAINTY Proved oil and gas reserves are the estimated quantities of crude oil, natural gas, and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, i.e., prices and costs as of the date the estimate is made. Prices include consideration of changes in existing prices provided by contractual arrangements but not on escalations based upon future conditions.The term "reasonable certainty" is not certainly clear! Determining reasonable certainty requires supporting geological and engineering information. There must be data available to indicate that assumptions such as decline rates, recovery factors, reservoir limits, recovery mechanisms and volumetric estimates, gas-oil ratios, or liquid yield are valid. If the area in question is new to exploration, and there is little supporting data for decline rates, recovery factors, reservoir drive mechanisms etc., a conservative approach is appropriate until there is enough supporting data to justify the use of more liberal parameters for the estimation of proved reserves. The concept of reasonable certainty implies that, as more technical data becomes available, a positive, or upward, revision is much more likely than a negative, or downward, revision. According to the SPE definitions, if deterministic methods are used, the term reasonable certainty intends to express a high degree of confidence that the quantities will be recovered. If probabilistic methods are used, there should be at least a 90% probability that the quantities actually recovered will equal or exceed the estimate. Meet Some of Our Talented People! Geophysicist with 27 years of experience in geophysical exploration and exploitation. Investigative projects, strengths include 2D and 3D seismic workstation interpretation. Marine acquisition and geophysical data processing. Prospect generation, as well as regional evaluations of onshore, offshore shelf and deepwater GoM. Ask for GP636.Facilities engineer with 21 years of experience in managing all types of upstream projects. Significant major company experience, but also recent smaller company experience requiring quick, "out of the box" solutions. References speak highly about ability to "command" a project, and to work well with all involved, even on the toughest projects. Ask for F318.Geologist with 15 years of experience in basin development, tectonics, petrophysics, seismic stratigraphic methods, and geopressure prediction. Recent accomplishments include the development of geophysical and empirical methods for the prediction of pore pressure in overpressured sands in the deep water GoM. Ask for G286.Reservoir engineer with 23 years of experience in reservoir engineering and project development for both domestic and international operations. Highly experienced with oil and gas reservoirs. Experienced in reservoir management, pipeline development management, and simulation modeling. Has maintained technical aptitude and involvement in the technical aspects of reservoir engineering. Experience in Australia, Bolivia, Brazil, and China. Computer proficient in many engineering applications. Ask for R361.Production/Reservoir engineer with 21 years of experience in reservoir engineering, production operations, and contract negotiations for both domestic and international oil and gas operations. Registered engineer with highly specialized skills in technical supervision and advisory roles for asset engineering and operations teams. Highly experienced in contract formation, negotiation, and implementation. Experience includes onshore U.S., Brazil, and Venezuela. Computer proficient. An ideal candidate for a technical advisor/supervisor within an E&P company. Ask for PR284.Energy Executive with extensive worldwide experience in upstream operations. Highly experienced in oil and gas development and operations, including a strong emphasis on field planning and development, production engineering and operations, and major construction projects. Management experience includes project management, field development, and asset group management of multidisciplinary team. Experience in Indonesia, Kazakhstan, China, Venezuela, Brazil, Argentina, Thailand, North Sea, and several U.S. provinces. Ask for M227.
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It's Our Story - Let's Tell It!
