Estimation of Primary Oil Reserves

Abstract

Published in Petroleum Transactions, AIME, Volume 207, 1956, pages 182–191. Abstract This paper reviews the methods currently in use for estimating primary oil reserves and discusses the principles on which these methods are based. Particular emphasis is placed on how these methods change with the type of information available during the life cycle of an oil property. This paper contains various novel estimating methods and shortcuts heretofore unpublished. Introduction Estimating oil reserves is one of the most important phases of the work of a petroleum engineer since the solutions to the problems he deals with usually depend on a comparison of the estimated cost in terms of dollars, with the anticipated result in terms of barrels of oil. His recommendations to management regarding the best course of action are therefore normally based on the most favorable balance between these two. Specific engineering problems which require such a knowledge of recoverable oil reserves and a projection of future rates are:the exploitation and development of an oil reservoir;the construction of gasoline plants, pipelines and refineries;the division of ownership in unitized projects;the price to be paid in case of a sale or purchase of an oil property, and the magnitude of the loan which it will support;the proper depreciation rate for the investment in oil properties; andevaluation of the results of an exploration program. This discussion will be confined to the various methods and tools which are currently in use for estimating oil reserves to be obtained during the primary phase of an oil-producing reservoir and for a projection of the future production rates. Reserves which may be obtained by secondary recovery methods or fluid injection programs and gas and gas condensate reserves will not be discussed in this paper.