Presentation on theme: "1 Presented at the Annual Meeting of the Society of Petroleum Evaluation Engineers Santa Fe, New Mexico June 13-16, 2009 George Schaefer Senior Vice President."— Presentation transcript:
1 Presented at the Annual Meeting of the Society of Petroleum Evaluation Engineers Santa Fe, New Mexico June 13-16, 2009 George Schaefer Senior Vice President Miller and Lents, Ltd. Russian Oil & Gas Reserve Definitions
3 Russian Oil & Gas Reserves 1.Russia has been and will continue to be a strategic resource to world economies. 2.How do Russian authorities define petroleum reserves? 3.How do their definitions compare with the West (SPE and SEC)?
4 World Proved Oil Reserves as of January 1, 2008 (Billion Barrels) Country Oil Reserves Saudi Arabia 266.8 Canada 178.6 Iran 138.4 Iraq 115.0 Kuwait 104.0 United Arab Emirates 97.8 Venezuela 87.0 Russia 79.0 Libya 41.5 Nigeria 36.2 Kazakhstan 30.0 United States 21.0 China 16.0 Qatar 15.2 Algeria 12.2 Brazil 12.2 Mexico 11.7 Angola 9.0 Azerbaijan 7.0 Norway 6.9 Rest of World 46.5 ______________________ World Total 1,332.0 Source: World Factbook by United States CIA
5 World Natural Gas Reserves as of January 1, 2008 (Trillion Cubic Feet) Country Gas Reserves % of World Total World 6,186 100.0 Top 20 Countries 5,606 90.6 Russia1,680 27.2 Iran 948 15.3 Qatar 905 14.6 Saudi Arabia 253 4.1 United Arab Emirates 214 3.5 United States 211 3.4 Nigeria 184 3.0 Venezuela 166 2.7 Algeria 159 2.6 Iraq 112 1.8 Turkmenistan 100 1.6 Kazakhstan 100 1.6 Indonesia 94 1.5 Malaysia 83 1.3 China 80 1.3 Norway 79 1.3 Uzbekistan 65 1.1 Egypt 59 0.9 Canada 58 0.9 Kuwait 56 0.9 Rest of World 580 9.4 Source: Worldwide Look at Reserves and Production, Oil & Gas Journal, Vol. 105, No. 48 (December 24, 2007), pp. 24-25.
9 Russian Oil & Gas Reserves 1.Russia has been and will continue to be a strategic resource to world economies. 2.How do Russian authorities define petroleum reserves? 3.How do their definitions compare with the West (SPE and SEC)?
10 Russian Strategic Motivators 1.Respect / National Pride 2.National Security 3.Economic Recoverability
11 Reserve Life Index Reserve Life Index = Proved Reserves Production Rate For Russia: Reserve Life Index = 23 on oil production Reserve Life Index = 74 on natural gas For Western Companies: Reserve Life Index = 11
12 Economic Recoverability
13 Russian Proved Oil Reserves
14 Typical Russian Reservoir Model Average Reservoir Parameters Permeability69 md Porosity23.9 percent Pay Thickness8.1 meters Oil Viscosity1.647 cp Water Viscosity0.430 cp Oil Saturation0.59 Formation Volume Factor1.178 reservoir barrels per stock tank barrel Reservoir Temperature1.65° F (74° C) Initial Pressure2,893 psi Assumed Parameters Residual Oil Saturation0.25 Coefficient of Permeability Variation0.75 Mobility Ratio1.0 Injection Pressure4,400 psi Producing Pressure1,000 psi Distance Between Wells500 meters Model Area4,000,000 m 2 (400 hectares) Model Original Oil in Place25 million barrels
15 Recovery Factor Correlation for Western Siberian Basin For Reservoirs with Greater Than 75% Depletion
16 Russian Oil & Gas Reserves 1.Russia has been and will continue to be a strategic resource to world economies. 2.How do Russian authorities define petroleum reserves? 3.How do their definitions compare with the West (SPE and SEC)?
17 Russian approach to reserve classification recognizes the natural progression of resource identification, delineation and conversion to reserves. Resources and reserves are classified by where a reservoir, field, or region is located within this sequence of events. Category IDActivity D2-Regional Analysis D1-Regional Exploration C3-Prospect Identification / Wildcat Drilling C2-New Field Discovery / Infield Exploration C1-Delineation Drilling B-Development Plan A-Production
18 Russian Reserves Classifications
19 Comparison of Russian Reserve Definitions With Western Standards
20 Russian Federation Classification Scheme
21 Russian & Western Classification of Reserves Russia West (SPE, SEC) Technical recoverability Commercial recoverability Key Criteria Geophysical and geological exploration completed Proved by exploration and production operations Commercially viable Geophysical and geological exploration completed Proved by drilling Projected commercial viability Geophysical & geological exploration completed Minimum drilling data available Paper estimates are partially proven Assumed to be existent based on presence of favorable data, structures and analogs Geological and engineering (or production) data available to fully prove commercial viability of development 1) Studies not fully completed, namely: Well explored producing adjacent areas Unexplored areas analog to explored properties Commercially viable in existing economic and technological environment Assumed to be existent in: Unexplored areas based on analog data from similar fields Assumed to be commercially viable in existing economic and technological environment 1) SPE and SEC classification of proved reserves slightly differs as SEC proven reserve requirements are more stringent (offset rule) resulting in more conservative estimates АВС 1 + С2D ProvedProbablePossible ProvedPossible 30% С 1 70% С1 Probable
22 Russian Oil & Gas Reserves Conclusions 1.Russia will continue to be a major energy supplier in the globalization of world economies. 2.Russian authorities define petroleum reserves as best illustrated using the McKelvey Box. 3.Russia is a strong competitor and formidable adversary with abundant supply of natural resources and a talented, educated work force.