Laying the Foundations for Hydrocarbon Resource Management
Resource management is more than portfolio planning; it also integrates property evaluation, regulatory reporting, and historical performance tracking. The underlying asset is the estimated in-place petroleum volume, but the value is derived through implementing exploration and development projects.
Hydrocarbon assets include all those oil and gas accumulations, or potential accumulations, in whose development a company may decide to invest, now or in the future. Some properties have existing discoveries under development, some have identified prospects, and others may have potential that is not yet fully defined. Some discoveries may be “not-yet-commercial” awaiting future infrastructure or technology development; yet these assets have value today based on that projection. Project participation may be in diverse forms and subject to complex fiscal terms. In some cases there is no current ownership but projects depend on predicted acquisitions. We call this collection of entities a hydrocarbon resource inventory.
Companies require an organized, consistent, and systematic approach to manage projects that span maturity from early exploration to late stage production. This paper examines the underlying processes to characterize volumes and value under conditions of risk and uncertainty. It builds on the classification system published in 2000 by the Society of Petroleum Engineers (SPE), the World Petroleum Congress (WPC) and the American Association of Petroleum Geologists (AAPG). Expansion of this classification to include project maturity attributes is a key step to effective portfolio management.
Recognition of a structured relationship between the resource, ownership, operational, and business project entities must be imbedded in the underlying database.
Exploration and Production Portfolio Management: Investment, Value Creation
2004 AAPG International Conference and Exhibition Technical Program