Definition: A statement of a meaning of a
word or word group.
Sounds straight-forward enough. You find a word and
define it. Period. 'Nuff said.
Well, sometimes it's easier said than done,
Take for instance, the definition of "resources"
— and "reserves."
As a July EXPLORER letter to the Readers' Forum noted,
"There is too much confusion … as to what the term 'reserves'
The letter writer, AAPG member Ferruh Demirmen of
Houston, correctly pointed out that it doesn't have to be that hard
— just check the terminology of the "Petroleum Classification and
Definitions," approved by AAPG, the Society of Petroleum Engineers
and the World Petroleum Congress.
SPE and WPC had approved a set of petroleum "reserves"
definitions in 1997, according to Ken Mallon, which was a major
step forward to improve the level of consistency in reserves estimation
and reporting on a worldwide basis.
As a development of the work on the reserve definitions,
the organizations recognized the potential benefits to the industry
in developing consistent definitions covering the entire resource
Work then began on "What is the definition of 'resource?"
AAPG's Committee on Resource Evaluation became involved
in the defining of the terms through the AAPG liaison to the SPE
Oil and Gas Reserves Committee. Those involved from AAPG included
Mallon, Naresh Kumar, Claude McMichael, James G. Ross and Anibal
"The establishment of an internationally accepted
petroleum resource classification system is long overdue," Ross
said in a paper presented at the SPE Hydrocarbon Economics and Evaluation
Symposium held in Dallas in 2001. "Despite the obvious benefits
of shared definitions of resource categories and related terminology,
the industry has developed in such a way that individual countries
and companies have been left to design their own systems which preclude
easy comparisons between them.
"This has been a particular problem in the large
corporate mergers seen in recent years," he continued, "but is also
a significant limitation when considering and comparing the resource
base of individual countries."
"Guildelines for the Evaluation of Petroleum Reserves
and Resources" was published by SPE as a supplement to the previous
definitions volume in October 2001, and is available on the SPE
"Guidelines" includes chapters on:
- Petroleum Resources Classification and Definition.
- Operational Issues.
- Current Economic Conditions.
- Probabilistic Estimation Procedures.
- Aggregation of Reserves.
- Application of Geostatistics in the Petroleum Industry.
- Seismic Applications.
- Reserves Reporting Under Production-Sharing and Risk-Based
"Since publication of the definitions, industry response
has been largely favorable," Mallon said. "Producing companies,
consultant companies and various agencies have indicated their intention
to follow the classification system as published."