Proven Reserves, or 1P, is the amount of oil or gas in a reservoir that can be recovered using current technology. There are two types of proven reserves: developed and undeveloped. Several methods are used to estimate proved reserves, but no method is completely accurate. The countries with the largest proven reserves are Saudi Arabia, Canada, and Iran. Suspicions have been raised about the accuracy of the numbers reported by some countries.
Proven Reserves, or 1P, is a term used by the oil and natural gas industry. Refers to the amount of oil or gas in a reservoir under the economic situation that is recoverable using current technology. In any reservoir, there is a limited amount that can be extracted. These reserves are a way of quantifying exactly the amount of hydrocarbons that can be expected from a well or reservoir.
There are two types of proven reserves: developed and undeveloped. Developed proved reserves already have all or most of the equipment installed and the drilling required to extract the resource. Undeveloped reserves require an investment of money, time and effort before the resource can be extracted.
There are several methods for estimating proved reserves, although no method is completely accurate. Some experts also claim that some companies and countries have overestimated their reserves for economic reasons. For example, an oil company that claims to have high proven reserves would have a higher stock price as a result.
One estimation method is known as decay curve analysis. This is done by plotting exit levels against time and then graphically stretching the data to estimate future exit. Decline curve analysis can only be applied to a reservoir already in production; otherwise the necessary data will not be available.
Another method is the volumetric method. This method requires a large amount of initial data to obtain an accurate estimate. The dimensions of the reservoir and the type of rocks it contains must be known or estimated. This method works best after drilling enough to obtain accurate information about the size of the reservoir and the composition of its contents.
A third method is known as the material balance method. This method examines the ratio of oil, natural gas and water extracted from an oil source. The ratios are then related to the pressure change in the reservoir.
As of 2009, the countries with the largest proven reserves were believed to be Saudi Arabia, Canada, and Iran. Questions have been raised about whether several Organization of Petroleum Exporting Countries (OPEC) countries actually have their declared reserves. OPEC rules base production quotas on the amount of proven reserves. Countries with higher declared reserves can therefore sell more oil or natural gas. Most countries do not have independent auditors who estimate their reserves, which has fueled suspicions about the accuracy of their numbers.
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