6 Reserves

CLASSIFICATION OF RESERVES

6.1 UKCS reserves can be classified under two main categories - ‘discovered’ and ‘undiscovered’ - together with an intermediate category ‘potential additional reserves’ which comprises discoveries about which little is known or which fail to meet the technical and economic criteria for entry into the main ‘discovered’ reserves tables. For each of these categories there is a different level of confidence. The greatest certainty is assigned to the discovered reserves which are calculated on a field by field basis from both well and seismic data. Each field is assigned reserves in one or more of the "proven", "probable" and "possible" categories according to their chance of being both technically and economically producible. Less certainty can be assigned to the Potential Additional Reserves (PARs) which are primarily single well discoveries. The least certain are the estimates of undiscovered reserves which are made by a statistical assessment of the likely number and size of mapped but undrilled prospects.

6.2 Except where indicated otherwise, in this chapter, reserves means initially recoverable reserves in oil or gas fields, also known as ultimately recoverable reserves. Continuing previous practice, no proven reserves are assigned to fields without approved development plans.

Oil

6.3 Table 6.1 gives the estimates of initially recoverable oil reserves in discoveries to date together with the figures from last year for comparison. Oil reserves include both oil and the liquids and liquefied products obtained from gas fields, gas-condensate fields and from the associated gas in oil fields; the overall totals are simply the sum of the individual field figures. The gas reserves of these fields are presented in Table 6.2. Specifications for liquid condensates from gas condensate fields and natural gas liquids (NGLs) vary across the industry but approximate proportions of these hydrocarbon liquids in the total initially recoverable reserves are now 7% as gas condensate liquids and 4% as natural gas liquids.

Table 6.1 Estimates of discovered recoverable reserves of OIL on the UKCS (1) as at 31 December 1998 (figures in brackets are for 1997)

* The terms ‘proven’, ‘probable’ and ‘possible’ are applied on a field by field basis and are given the following meanings in this context:

Proven - those reserves which on the available evidence are virtually certain to be technically and economically producible (i.e. having a better than 90 per cent chance of being produced).

Probable - those reserves which are not yet proven but which are estimated to have a better than 50 per cent chance of being technically and economically producible.

Possible - those reserves which at present cannot be regarded as ‘probable’ but are estimated to have a significant but less than 50 per cent chance of being technically and economically producible.

** Maximum - the sum of the proven, probable and possible reserves.

As in previous years the reserves of individual fields have been summed arithmetically. From the component ranges for each row in the table the reserves are thus estimates at between the proven and maximum values listed. The likelihood that the true figure is outside this range is much smaller than for the individual component ranges.

(1) Includes onshore and offshore discoveries. All figures include gas liquids and liquefied products.

(2) With the exception of the production figures, entries are rounded to five million tonnes. As a result, the sum of the constituent parts may not equal the totals.

(3) The initially recoverable reserves for fields in production or under development include 70 (180) proven, 55 (155) probable and 30 (90) possible million tonnes oil reserves in fields under first development.

(4) Both the total initially recoverable proven reserves and the cumulative oil production include 20 (20) million tonnes of oil from fields that have ceased production.

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Chart 6.1 - Discovered recoverable reserves - Oil

6.4 The development plans for nine new offshore oil fields and four onshore were approved during 1998 as listed in Table 7.1. One gas condensate field was also approved. Reserves in all approved fields under first time development at 31st December 1998 are shown in Table 6.1 (note (3) ) and at the proven plus probable level, these reserves are slightly higher than last year. Six incremental developments to producing offshore oilfields and one onshore incremental development were approved - reserves additions not shown separately. The total initially recoverable proven reserves have increased by 130 million tonnes. When cumulative production to the end of 1998 of 2306 million tonnes is subtracted, remaining proven reserves stand at 685 million, only 5 million tonnes less than at the end of 1998 although production was at a record level.

6.5 Initially recoverable reserves at the proven plus probable level have increased slightly to 3,570 million tonnes. There are some new fields and reserves have grown in a number of established producing fields and fields under construction but there have also been revisions due to geological, reservoir engineering and economic re-assessments. After deducting cumulative production, remaining proven plus probable oil reserves stand at 1265 million tonnes compared to 1390 million tonnes last year.

6.6 Possible reserves have decreased due to limited replacement of reserves, now considered probable or proven, from exploration success in 1998 or by fields previously held as only having potential additional reserves (PARs, section 6.13). A few fields previously held with probable reserves only have been reclassified to PARs. When combined with the proven and probable reserves, the resulting maximum possible remaining reserves stand at 1800 million tonnes.

Gas

6.7 Table 6.2 gives the quantities of gas expected to be available for sale from dry gas fields, gas-condensate fields and oil fields with associated gas. Equivalent figures from last year are provided for comparison. Gas which has been or is expected to be flared or used offshore is not included. The liquid recovery from these fields is presented in Table 6.1.

Table 6.2 Estimates of discovered recoverable reserves of GAS (1) on the UKCS (2) at 31 December 1998 (figures in brackets are for 1997)

Notes

* The terms ‘proven’, ‘probable’, possible and ‘maximum’ have the meanings defined in table 6.1 with the associated comment.

** Maximum - the sum of the proven, probable and possible reserves.

As in previous years the reserves of individual fields have been summed arithmetically. From the component ranges for each row in the table the reserves are thus estimates at between the proven and maximum values listed. The likelihood that the true figure is outside this range is much smaller than for the individual component ranges.

1. Excludes flared gas and gas used on platforms.

2. Includes onshore and offshore discoveries.

3. Both the total initially recoverable proven reserves and the cumulative gas production include 25 (14) bcm of gas from fields that have ceased production.

4. Except for the production figures which are rounded to the nearest bcm, all entries are rounded to 5 bcm. As a result, the sum of the constituent parts may not equal the totals.

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Chart 6.2 - Discovered recoverable reserves - Gas

6.8 Eight offshore gas fields were approved for development during 1998. These are listed in Table 7.1. In addition, a new gas condensate field adds to the proved gas reserves. Two onshore developments to access coalbed methane were also approved. Some of the new oilfields noted in section 6.4 also contribute to the gas reserves. Gas condensate fields now contribute 19% of the total initially recoverable gas reserves and associated gas from oilfields contributes 17%, both at the proven plus probable level.

6.9 Initially recoverable proven gas reserves increased by 80 billion cubic metres (bcm) to 2,065 bcm. After deducting cumulative production of some 1311 bcm, remaining proven reserves stand at 755 bcm which is almost the same as last year. At the proven plus probable level the initially recoverable reserves have increased by 40 bcm but the remaining recoverable gas reserves have decreased slightly as in 1997. The maximum possible remaining reserves, now stand at 1,795 bcm. Thus the underlying reserves base for gas remains strong, particularly at the proven and higher probability end of the range.

Dry Gas

6.10 The initially recoverable proven reserves of southern basin dry gas fields in production or under development have increased slightly over the year. This is the result of development drilling to access greater volumes of gas. Dry gas reserves in production or under development in areas outside the southern basin have increased slightly. For both categories the dry gas reserves in fields under appraisal have been reduced.

Gas from Gas Condensate Fields

6.11 At the proven plus probable level the initially recoverable gas reserves of those condensate fields in production and under development have increased slightly through revisions as the confidence gained from further appraisal has permitted a greater proportion of the uncommitted reserves to be classified as probable.

Associated Gas

6.12 Reviews of a number of oilfields already in production have resulted in an increase in the estimates of their proven associated gas reserves. However probable and possible associated gas reserves have declined - partly in consequence.

6.13 Potential Additional Reserves exist in discoveries which do not meet the criteria for inclusion as possible reserves, as defined in Table 6.1. The current estimates are shown in Table 6.3.

Table 6.3 - Potential additional reserves (1)

Note:

(1) Totals have been rounded to 5 million tonnes of oil or 5 bcm of gas.

(2) Figures in brackets are for 1997.

6.14 The ranges of reserves in this category may vary from year to year. As additional data becomes available, some reserves may be transferred from this category to the Discovered Recoverable category. Similarly reserves may be transferred to this category from the Discovered Recoverable category.

6.15 The figures shown in Table 6.3 take account of all discoveries made up to the end of 1998 which do not justify inclusion in the Discovered Recoverable category.

6.16 The upside for oil and gas reserves ranges have increased from last year by 25 million tonnes and 20 bcm respectively. This reflects fields no longer under consideration for possible development. Therefore, these reserves are transferred from the Discovered Recoverable category. Reserves of gas discovered in 1998 replaced those reserves transferred to Discovered Recoverable. This was not the case for new oil discoveries, where new oil discoveries were not sufficient to replace reserves transferred to Discovered Recoverable.

6.17 The methodology for calculating this category of reserves remains unchanged from previous years. The results are shown in Table 6.4.

Table 6.4 - Estimates of undiscovered recoverable reservces on the UKCS (1) Reserves in future discoveries by geological area

Notes:

(1) Includes onshore and offshore assessments.

(2) Totals for each offshore area have been rounded to 10 million tonnes of oil or to 5 billion cubic metres of gas. Totals for each onshore area have been rounded to 5 million tonnes of oil or 1 billion cubic metres of gas.

(3) No account has been taken of projected fuel usage and flaring.

(4) Gas associated with oil and condensate.

(5) Every offshore prospect included in the detailed analysis on which this table is based is estimated to contain reserves of at least 2 million tonnes

of oil (15 million barrels) or 2.8 billion cubic metres of gas (0.1 trillion cubic feet).

(6) Part of Basin yet to be assessed — work currently underway.

(7) The bottom limit of the range is taken as zero as no oil has been found to date in this area.

(8) The lower end of the range is zero as a consequence of rounding.

* Areas where detailed studies have been carried out.

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6.18 In the Northern and Central North Sea (area (a)), the West of Shetlands (area (b)), the Southern Basin, Irish Sea and Celtic Sea Basins (area (d)) and the East Midlands, Weald, West and Southeast England, North Yorkshire and Lincolnshire (area (e)), only prospects that have been mapped are used in the calculation. Additional reserves are likely in these areas as no account can be taken of potential traps that may exist beyond the resolution of current seismic penetration.

6.19 Standard statistical techniques are used in these areas to obtain estimates within each of these basins, and these are added to obtain the ranges in Table 6.4. The data-base has been modified to take account of new drilling and mapping in these areas.

6.20 There is insufficient exploration activity and technical data available to use these techniques in the West of Scotland (area (c)) and other areas of the UKCS (area (f)).

6.21 The Undiscovered Recoverable Oil Reserves are now estimated to lie in the range 275 - 2,550 million tonnes compared with last years’ range of 285 - 2,680 million tonnes. Recoverable Gas Reserves are now estimated to lie in the range 440 - 1,595 bcm compared with last years’ range of 500 - 1,700 bcm.

6.22 The limits of these ranges should not be regarded as minima or maxima.

6.23 Cut-offs are maintained at 2 million tonnes in the case of offshore oil and 2.8 bcm for offshore gas. In the onshore areas, the cut-offs used are 50 thousand tonnes in the case of oil and 0.1 bcm for gas.

6.24 No estimate is made of unconventional gas resources.

6.25 Estimates of undiscovered reserves must be treated with caution. They provide only a broad indication of the ultimate remaining potential.

6.26 With cumulative production to date of 2306 million tonnes of oil and 1311 bcm of gas, the total remaining reserves are estimated to lie in the range of some 1060 - 4865 million tonnes of oil and 1260 - 3625 bcm of gas.

Table 6.5 - UK initially recoverable reserves

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Title | Table of Contents
Chapter 1 | Chapter 2 | Chapter 3 | Chapter 4 | Chapter 5 | Chapter 6 | Chapter 7 | Chapter 8 | Chapter 9
Appendix 1 | Appendix 2 | Appendix 3 | Appendix 4 | Appendix 5 | Appendix 6 | Appendix 7 | Appendix 8 | Appendix 9
Appendix 10 | Appendix 11 | Appendix 12 | Appendix 13 | Appendix 14 | Appendix 15 | Appendix 16 | Appendix 17
Index Map | Plate 1 | Plate 2W | Plate 2E | Plate 3W | Plate 3E | Plate 4W | Plate 4E | Plate 5W | Plate 5E | Plate 6
Plate 7 | Plate 8W | Plate 8E | Plate 9W | Plate 9E | Plate 10W | Plate 10E | Plate 11 | Plate 12 | Legend
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