Reserves Estimation & Categorization

in ONGC, India
&
Case Studies with Reference to UNFC-2009
K. Gopa Kumar
Geneva - 01.05.2015,
6th Session EGRC
Outline
Outline

ONGC
Existing System of Reserves Estimation & Categorization
Methodology Adopted
From Current System to PRMS
And to UNFC-2009
Case Studies
Field A from Home
Field B from Overseas
Summary & Conclusions

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 ONGC
Oil and Natural Gas Corporation Limited (ONGC) is
India's largest Oil and Gas Exploration and Production
company
It is a Public Sector Undertaking (PSU) of the
Government of India, under the administrative control of
the Ministry of Petroleum and Natural Gas
ONGC produces around 70% of India's crude oil
(equivalent to around 30% of the country's total demand)
and around 62% of its natural gas.
ONGCs activities are both in Onland and Offshore
extending to the deep waters.
ONGC Videsh is the overseas arm of ONGC, managing
35 assets in 17 countries spread-over 5 continents.

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Reserves Estimation System followed in ONGC, India

ONGC started estimating its reserves in 1965 under the guidance of

Soviet experts & was following Russian System till 1994.
In 1994 ONGC adopted new classification and categorization of
Initial Inplace Volume and reserves of oil and gas in tandem with the
changing scenario of upstream oil sector to multinational with
expanding activities.
The present classification and categories of reserves are adopted
from SPE/WPC 1993 guidelines with periodic modifications.
ONGC is following the Disclosure Standards of the US Financial
Accounting Standard Board (FASB) statement No.69 for Disclosure
of proved oil and gas reserves quantities in its annual estimation of
reserves.
ONGC does not include contingent resources in its reserve books.
As a measure of Good Corporate Governance, ONGC gets its
reserves certified/audited by an external agency of International
repute at every 5 years.
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 Reserves Estimation system followed in ONGC

Categorisation on the analogy of SPE system was adopted in

1995.
This system is applicable to both the Inplace hydrocarbon volume
and Reserves

INPLACE VOLUME RESERVES

PROVED PROVED
PROBABLE DEVELOPED
POSSIBLE UNDEVELOPED
UNPROVED
PROBABLE
POSSIBLE

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 Reserves Categories

Reserves

Commercially recoverable with high degree of certainty

from known accumulation from a day forward, under
existing economic conditions, under established operating
practices and government regulations.

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 Reserves Categories

Proved Reserves
Must have facilities to process and transport to market and
reasonable expectation to install such facilities in future.

Proved Developed (PDD)

Expected to be recovered from existing wells
Improved recovery reserves are considered after the necessary
equipment has been installed or cost to do so is low.

Proved Undeveloped (PUD)

Expected Improved recovery from planned well on undrilled acreage
involving additional expenditure for production/ transportation
facilities .

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 Reserves Categories

Probable Reserves (PB)

Less certain than proved reserves ,estimated with a

degree of certainty sufficient to indicate that they are
more likely to be recovered, includes

Incremental reserves attributable to infill drilling

Reserves attributable to an improved recovery method

Incremental reserves in a Proved/Probable Inplace

which shows significantly more reserves than Proved

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 Reserves Categories

Possible Reserves (PS)

Less certain than probable reserves and can be estimated
with a low degree of certainty, insufficient to indicate
whether they are more likely to be recovered than not

Reserves attributable to an improved recovery method

when a planned project/pilot is not in operation

Incremental reserves attributable to infill drilling that

are subject to technical uncertainty

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 Reserves- as per PRMS guidelines

Those quantities anticipated to be commercially recoverable by

application of development projects to known accumulations from
a given date forward under defined conditions.
They must satisfy the following criteria:
Has project been defined?
Is timeframe reasonable?
Have economics been defined, and are they positive?
Does a market exist, or is it reasonably certain that it will exist?
Is there reasonable certainty that facilities will exist?
Is there reasonable certainty that all consents will be obtained
Has government approved the plan and have partners committed
to it?
If no to any of these, then Contingent Resources;
if yes to all, then Reserve.

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 UNFC 2009

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 PRMS Relationship with UNFC

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ONGC a Wealth Creator
 Bridging to UNFC through PRMS

UNFC G Axis
PRMS UNFC
Fundamental UNFC 1P/1C
Resource Sub-classes F 2P/2C 3P/3C
Characterisation E Axis Low
Classes Axis Best est. High Est
Est.
On Production 1.1 or 1.2 1.1 1 1+2 1+2+3
Discovered & Approved
1.1 or 1.2 1.2 1 1+2 1+2+3
Commercially Reserves for Development
Recoverable Justified
1.1 or 1.2 1.3 1 1+2 1+2+3
for Development
Development
1 or 2 2.1 1 1+2 1+2+3
Pending
Discovered & Development
Contingent
Not unclarified or on 3.2 or 2 2.2 1 1+2 1+2+3
Resources
Commercially hold
Recoverable Development
2 2.3 1 1+2 1+2+3
not viable
Unrecoverable 3.3 4.1 1 1+2 1+2+3
Prospect 3.2 3.1 4.1 4.1+4.2 4.1+4.2+4.3
Prospective
Lead 3.2 3.2 4.1 4.1+4.2 4.1+4.2+4.3
Undiscovered Resources
Play 3.2 3.3 4.1 4.1+4.2 4.1+4.2+4.3
Unrecoverable 3.3 4.2 4.1 4.1+4.2 4.1+4.2+4.3

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SPE/WPC- PRMS UNFC Mapping

On Production

The project is currently on commercial production .

Proved Developed category ( PDD ) is classified as

UNFC-2009 category (1,1,1)

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 SPE-PRMS UNFC Mapping

Approved for Development

All necessary approvals have been obtained, capital
funds have been committed
Implementation of the development project is
underway.

Proved Undeveloped category (PUD) is classified under

UNFC-2009 Category (1.1, 1.2, 1)

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 SPE-PRMS- UNFC Mapping

Justified for development

On the basis of reasonable forecast of commercial conditions
at the time of reporting with reasonable expectation that all
necessary approvals/contracts will be obtained.
A project maturity sub-class that reflects the actions required to
move a project forward towards commercial production

Probable (PB) and Possible (PS) categories (specific cases

with supporting documents) are classified under

UNFC-2009 Category (1.1,1.3,2)

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 Methodology adopted

15 years being the R/P ratio as a healthy reservoir norm

for 1P reserves ,the same has been considered for
proved category reserves and volumes falling beyond 15
years are being kept under lower category.
Reserves of the pays which do not follow the production
profile and decline before end of contract period were
identified to be reviewed.
The unproved areas where new development locations
are available/likely to be available in near future, a part of
the estimates for those areas are considered as reserves
Estimates of a block/ pay horizon where there is scope for
zone transfer, considered in the reserves category.

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 A Field as on 01.04.2014

This onland field is one of significant oil producers

It is an multilayered field having around 30 pay
zones ranging from Lower Eocene to Miocene in
age.
The estimated Inplace volume is 84 MMt
O+OEG
Ultimate Reserves estimated is 30 MMt O+OEG
RF is 36 & 36.5 % w.r.t Oil & O+OEG respctively
Produced 23 MMt O+OEG (22 MMt Oil) as on
01.04.2014

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 A Field as on 01.04.2014

Recovered 28 % of OIIP.
Current oil production is @ 650 Mt per annum
Present R/P ratio is around 14-15 years
GCM studies and the dynamic model which are
under way indicate an increment in Recovery
factor.
Facilities exist for exploitation and marketing of
reserves of unproved volumes.
The present estimates qualifies to be classified
as Reserves as per PRMS and from there to
UNFC-2009
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 Reserves of A field as on 01.04.2014

TOTAL
SG & GCG FREE GAS O+OEG
Category OIL Mt GAS
MMm3 MMm3 Mt
MMm3

PD.PDD 6090 307.5 51.1 358.6 6450

PD.PUD 200 15.5 15.5 220

PD.PB 0.00 16.6 16.6 20

PB.PB 0.00 3.5 3.5 0.00

A Field
(Onland) PB.PS 30 2.8 18.2 21.0 50

PROVED 6300 323.1 51.1 374.2 6670

UNPROVE
D
30 6.3 34.8 41.1 70

TOTAL 6330 329.3 85.9 415.2 6740

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 Reserves of A Field under-UNFC Categories

UNFC UNFC Oil SG+GC FG O+OEG

UNFC Class
Subclass Category Mt MMm3 MMm3 Mt

On Production
1.1, 1.1, 1 6100 307.6 51.1 6450

Approved for
Commercial development 1.1 , 1.2, 1 200 15.5 220
Projects
Justified for
Development 1.1 , 1.3, 2 30 6.3 34.8 70
Total 6330 329.3 85.9 6740
Total

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 A Field

As per existing SPE/WPC 1993 AS per UNFC -2009 Classes

Cat Oil SG+GC Free O+OE UNFC UNFC Oil SG+GC Free O+OE
Mt Gas Gas Mt Subclass Category Mt MM m3 Gas Mt
MM m3 MMm3 MMm3

On 1.1,1.1,1 6100 307.6 51.1 6460

1P 6290 323.1 51.1 6670
Production
Approved for 1.1,1.2,1 200 15.5 210
Development.

2P 6300 326.6 67.7 6700

Justified for 1.1,1.3,2 30 6.3 34.8 70

Development

3P 6330 329.3 85.9 6740

Total 6330 329.3 85.9 6740

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 B Field (SE Asia Offshore) as on 01.04.2014

Ultimate Reserves estimated is 6408 Mt (18 Mt Cond &

6390 MMm3 Gas)
Produced 548Mt O+OEG (1 Mt Cond & 547 MMm3 Gas)
Current production is 358 Mt per annum.
Present R/P ratio of Balance Reserves w.r.t PD reserves is
around 8.4 years.
Also, one more prospect in the same formation down-dip, is
to be drilled in near future.
Expected Hydrocarbon may be same as that of B Field.
Prospective Resource potential of this prospect is expected
to be 7.08 MMtOE (Best Estimate)
B Field , existing category for Reserves & Resource

Existing SPE OIL (Mt) COND SG+GCG FG (MMm3) O+OEG

Category (Mt) (MMm3) (Mt)

PDD 7.800 3008.000 3016

P1
PUD
P2 4.500 1350.000 1355
P3 4.500 1485.000 1490
Total 3P 16.800 5843.000 5860

1C
2C
3C
Low Esti. 12 4083 4095

Best Esti. 20 7060 7080

High Esti. 75 25925 26000

 B Field , merging of different categories of
Reserves & Resource
SPE UNFC UNFC Category OIL (Mt) COND SG+GCG FG O+OEG
Category Subclass (Mt) (MMm3) (MMm3) (Mt)
On
1.1,1.1,1 7.800 3008.000 3016
PDD Production
P1
Approved for
PUD 1.1,1.2,1
Development
P2 Justified for 1.1 ,1.3, 2 4.500 1350.000 1355
P3 Development 1.1 ,1.3, 3 4.000 641.000 645
Potentially
1C 2 ,2.1, 1 1.000 844 845
Commercial
Low Esti. 3.2,3.1,4.1 12 4083 4095
Exploration
Best Esti. 3.2,3.1,4.1+4.2 20 7060 7080
Projects
High Esti. 3.2,3.1,4.1+4.2+4.3 75 25925 26000
 B Field , comparison of Reserves & Resource

As per existing SPE Category As per UNFC 2009

SPE COND FG O+OEG UNFC UNFC Category COND FG (MMm3) O+OEG
Category (Mt) (MMm3) (Mt) Subclass (Mt) (Mt)

1P 8 3008 3016 On Production 1.1,1.1,1 8 3008 3016

2P 13 4358 4371 Justified for 1.1 ,1.3, 2 13 4358 4371

3P 17 5843 5860 Development 1.1 ,1.3, 3 16 4999 5015

Potentially
1C 2 ,2.1, 1 1 844 845
Commercial

Low Esti. 12 4083 4095 3.2,3.1,4.1 12 4083 4095

Best Esti. 20 7060 7080 Exploration 3.2,3.1,4.1+4.2 20 7060 7080

Projects
High Esti. 75 25925 26000 3.2,3.1,4.1+4.2+4.3 75 25925 26000
 Summary & Conclusions

Two pilot case have been discussed from assets in India (Field A) and in South
East Asia (Field B) for categorizing its existing reserves/resources as per
UNFC-2009 classification.

During categorization of the Pilot A, initial challenges were faced in classifying

the reserve layer wise because of non-availability of Economic/Feasibility data,
the problem was however mitigated by considering the booked reserve at the
block level.

In Pilot B includes a gas & condensate field together with an upside potential
prospect yet to be drilled. The initial concerns like non availability of updated
field economics to define the Economic axis for the UNFC reserve categories
which were addressed by considering the field development plan, market
oil/gas price.

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 THANK YOU

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