What are proven reserves?

proven reserves or 1p is the term used by the oil and natural gas industry. It refers to the amount of oil or gas in a tank in a given economic situation that is renewable by current technology. In any tank there is a limited amount that can be extracted. Proven reserves are a way to accurately quantify, how many hydrocarbons can be expected from a well or tank.

There are two types of proven reserves: developed and undeveloped. Developed proven reserves already have all or most devices in place and the necessary drilling required to extract the source. Unwinding proven reserves require investment of money, time and effort before the source can extract. Some experts also claim that some companies and countries have overestimated their proven reserves for economic reasons. For example, an oil company claiming to have a high -proven reserve as a result would have a higher stock price.

One method of estimation is called a decline curve analysis. This is done by plottingTupid levels against time and then by graphically expanding data to estimate the future output. The decrease curve analysis can only be used on the tank already in production; Otherwise the necessary data are not available.

Another method is the volume method. This method requires a large amount of initial data to obtain an accurate estimate. The tank dimensions and the type of rocks it contains must be known or estimated. This method works best after sufficient drilling to obtain accurate information about the size of the tank and the composition of its content.

The third method is known as a method of material balance. This method examines the ratio of oil, natural gas and water extracted from the oil source. The ratios are packed with changing pressure in the tank.

Since 2009, countries with the largest proven reserves of Saudi Arabia, Canada and Iran have been considered. Questions have been raised as to whether many countries in the organization of oil -exporting countries (OPEC) SKIt has its reserves. OPEC rules of basic output quotas for the amount of proven reserves. Therefore, countries with higher reserves can sell more oil or natural gas. Most countries do not have independent auditors estimate their reserves, which stimulated suspicion in terms of accuracy of their data.