The CCOP
Petroleum Resource Classification System

PETROLEUM
PETROLEUMRESOURCESRESOURCESDISCOVEREDDISCOVEREDRESOURCESRESOURCESPOTENTIAL
POTENTIALRESOURCESRESOURCESRESERVESRESERVESPROVEDPROVEDRESERVESRESERVESDEVELOPEDDEVELOPEDRESERVESRESERVESUNDEVEL.
UNDEVEL.
RESERVESRESERVESUNPROVEDUNPROVEDRESERVESRESERVESPROBABLE
PROBABLE
RESERVESRESERVES

UNDISCOVEREDUNDISCOVEREDRESOURCESRESOURCESHYPOTHETICALHYPOTHETICALRESOURCESRESOURCES

LOW
EXP.
LOW
EXP.

HIGH
HIGH

SPECULATIVESPECULATIVERESOURCESRESOURCES

LOW
LOW

EXP.
EXP.

HIGH
HIGH

POSSIBLE
POSSIBLE
RESERVESRESERVES

March 1999

CCOP
The Coordinating Committee for Coastal and Offshore Geoscience Programmes in East andSoutheast Asia (CCOP) is an intergovernmental organisation with purpose to carry out joint applied geoscience programmes for sustainable development of the coastal and offshore areas in
East and Southeast Asia.
The CCOP (“Coordinating Committee for Offshore Prospecting in Asia”) was initiated in 1966 by
China, Japan, Republic of Korea and The Philippines under the auspices of ESCAP and the United
Nations. CCOP became an independent intergovernmental organisation in 1987 based on thecommon understanding of its member countries and the aspirations of the United Nations. The
name was changed in 1994, but the acronym CCOP was retained. CCOP has during this period
devoted itself to co-ordination of, and co-operation in, scientific activities related to coastal andoffshore areas with respect to geological/geophysical surveys, regional map compilations, database development, development of human resources and transfer of state of the art technology.
CCOP has divided its technical activities into four sectors:•

the energy sector,•

the mineral sector,•

the coastal zone sector and•the geo-hazard sector.

CCOP has 11 member countries; Cambodia, China, Indonesia, Japan, Malaysia, Papua New
Guinea, The Philippines, Republic of Korea, Singapore, Thailand and Vietnam.
CCOP has been supported by 14 co-operating countries and several international organisations.
For the last few years, the major contributing donor-countries have been Japan, the Netherlands
and Norway.
The CCOP Technical Secretariat is responsible for the daily co-ordination of all activities carriedout by CCOP. The Secretariat is headed by a Director, who is reporting to the CCOP Steering
Committee consisting of one permanent representative from each member country. The CCOP
Technical Secretariat is located in Bangkok, Thailand.
CCOP’s present activities are aimed at:••development of human resources in the public sector,•

promotion of technical co-operation among member countries,••

compilation of regional geological data,transfer of tailor-made technology to its member countries,

co-ordination of joint activities within the four sectors of CCOP.

March 1999

Preface
Petroleum is a key factor in the sustainable development of theeconomy of CCOP member countries. CCOP therefore started to prepare
a common project proposal on assessment and economic evaluation of
petroleum resources in 1993-94. The Resource Evaluation and Planning
project (REP) was formally approved for funding by Norwegian Agency for
Development Cooperation (NORAD) in August 1995 (phase 1) and in July
1996 (phase 2). The project comprised training courses, workshops, assessment software, as well as seminars on bilateral basis.
As a part of the REP, phase 2 project, where nine of the CCOP
member countries have participated, two working groups were also established. One of the working groups was given the task to establish a petroleum resource classification system that is common for the CCOP member
countries.
It is important to note that this system is a supplement, and is notsupposed to replace any national classification system that is establishedin the CCOP member countries. However, we do hope that the CCOP petroleum resource classification system will act as a guide for those member
countries that have not yet worked out their own system. We also hope that
the CCOP system will contribute to a common understanding and future
standardisation of terms and definitions used in resource classification in
the region.
Furthermore, this system will contribute to improve all communications on resources across borderlines and also be a vital tool for common
promotion activities of the region. When CCOP, as an organisation, approaches the international oil companies in order to attract investment,
common definitions and classification of resources will be of importance.
The CCOP petroleum resource classification and definitions havebeen discussed in several workshops of the REP, phase 2 project. These
workshops are: (1) Resource Assessment and Management in Shanghai,
China, 22-28 October 1996; (2) Resource Classification and Inventory
Systems in Phnom Penh, Cambodia, 21-30 April 1997; (3) Basic Petroleum
Economy in Cheju, Korea, 16-22 October 1997; (4) Risk Assessment andProspect Evaluation in Chengdu, China, 7-13 May 1998; and (5) Decision
Making in Manila, Philippines, 11-19 October 1998.
The CCOP petroleum resource classification system is compiled
by Mr. Jan-Erik Kalheim (the REP-II project co-ordinator), Professor Liu
Shugen (Chengdu University of Technology, China), Mr. Mat Arifin Ismail
and Mr. Badrul Hisham Ismail (PETRONAS, Malaysia) assisted by the
CCOP Technical Secretariat and all the participants of the abovementioned workshops.
Taking this opportunity, I on behalf of all CCOP member countries
would like to extend our heartfelt appreciation and acknowledgement to theRoyal Norwegian Government through NORAD for their long-term financial
and technical support to CCOP energy programmes.

Dr. Sahng-Yup Kim
Director, CCOP Technical Secretariat

CCOP Petroleum Resource Classification System

Page 1

Table of contents
INTRODUCTION
THE FRAME OF CCOP RESOURCE CLASSIFICATION SYSTEM
2.1. Petroleum and petroleum resources
2.2. Petroleum resources originally in-place
2.3. Recoverable resources
2.4. The framework of CCOP petroleum classification system
UNDISCOVERED PETROLEUM RESOURCES
3.1. Hypothetical resources
3.2. Speculative resources
DISCOVERED PETROLEUM RESOURCES
4.1. Potential recoverable resources
4.2. Reserves
4.2.1. Unproved reserves
4.2.2. Proved reserves
4.2.3. Reserve status categories
CURRENT RESOURCE CLASSIFICATION SYSTEMS IN CCOP ME MBER COUNTRIES
1.1 China
1.2 Indonesia
1.3 Malaysia
1.4 Thailand
1.5 Vietnam
1.6 Other CCOP countries
REFERENCESFIGURES AND TABLES
Figure 1:
Figure 2:
Figure 3:
Figure 4:
Figure 5:

CCOP Petroleum Resource Classification Chart
The major principles and a schematic description of the petroleum resource categories of the CCOP classification system.
Uncertainty in volume estimates illustrated by frequency diagrams
The dynamic movement between resource categories
An example of a petroleum resource classification scheme

CCOP Petroleum Resource Classification System

Page 2

1. Introduction
Each country needs to have a total overview of their petroleum resources,
including present reserves, other discovered resources and the potential
for future discoveries. Such an overview will form the basis for the Government’s resource management. It is therefore necessary to have a resource classification system with consistent definitions of terms and expressions related to all resource quantities. The classification system is avital tool for establishing a national resource inventory, which has to beperiodically updated. The classification system should be defined according to each country’s needs, but it should also be comparable with systems
that are established and used by international organisations. Such a classification system is a necessary tool for establishing a total and appropriate
resource inventory system, which is making us able to:
•
•
•
•
•

Make a total overview and valuation of the resource base;Rank resources and accumulations according to a series of defined
specifications;Monitor activities and decisions in all phases: exploration, development and production;
Establish a national long-term planning of the petroleum activities;
Evaluate impact of the petroleum activities on other industry-related
activities.

A proper petroleum resource classification system should be understandable not only to technical people, but also to financial advisors, analysts
and politicians.
How to classify petroleum resources and reserves has been widely discussed among geo-scientists, petroleum engineers and resource economists during the last 30 to 40 years. Because of the large variety of purposes for such classification, governmental agencies, international organisations and oil companies have worked out their own classification systems.
As new technology and methodology for resource and reserve estimation
have evolved, the various classification systems have been adjusted andrefined. Some systems have been very detailed and sophisticated, whileothers are more briefly defined. The great challenge has always been tocompare different systems and different definitions. Because of different
definitions, confusion and misunderstanding are common when governments communicate with oil companies and international organisations.
As shown in Chapter 5, there occur significant differences of petroleum
resource classification systems also in CCOP member countries, although
there are some common points in these systems. The situation is certainly
not helpful for common communication among CCOP member countries
until the terms are carefully defined. It seems necessary to suggest a region-wide classification system, which will improve the communication not
only among CCOP member countries but also between CCOP member
countries and the outside.
Even though there are established some international standards, they are
not completely describing the entire resource base. The CCOP resource

CCOP Petroleum Resource Classification System

Page 3

classification system is meant to be supplementary to both national classification systems of CCOP member countries and the internationally recognised classification of the reserves that the Society of Petroleum Engineers(SPE) and the World Petroleum Congresses (WPC) published in March
1997.
The basic principles for the CCOP petroleum resource classification system is as follows:

•
•
•
•
•

the petroleum resources should be considered as a whole,possess clear and consistent definitions of the terms,
general and flexible guidelines,
clear boundaries between different levels, andbe easy to be used as well for the governmental agencies as for the
petroleum industry.

The working group has tried to make the petroleum resource classification
system to be a simple, practical and readily understandable system thatreceives general acceptance in the CCOP region.

PETROLEUM
PETROLEUMRESOURCESRESOURCESDISCOVEREDDISCOVEREDRESOURCESRESOURCESPOTENTIAL
POTENTIALRESOURCESRESOURCESRESERVESRESERVESPROVEDPROVEDRESERVESRESERVESDEVELOPEDDEVELOPEDRESERVESRESERVES

Figure 1.

UNDEVEL.
UNDEVEL.
RESERVESRESERVESUNPROVEDUNPROVEDRESERVESRESERVESPROBABLE
PROBABLE
RESERVESRESERVES

UNDISCOVEREDUNDISCOVEREDRESOURCESRESOURCESHYPOTHETICALHYPOTHETICALRESOURCESRESOURCES

LOW
LOW

EXP.
EXP.

HIGH
HIGH

SPECULATIVESPECULATIVERESOURCESRESOURCES

LOW
LOW

EXP.
EXP.

HIGH
HIGH

POSSIBLE
POSSIBLE
RESERVESRESERVESCCOP Petroleum Resource Classification Chart of Recoverable Resources

CCOP Petroleum Resource Classification System

Page 4

2. The frame of CCOP resource classification
2.1.

Petroleum and petroleum resources

Petroleum includes crude oil, condensates, natural gas and related substances, i.e., (1) thermal or biogenic gas found in conventional reservoirs
or in gas hydrate, tight reservoirs, fractured shale, and coal; (2) condensates, crude oils, and asphalt found in nature. Petroleum is predominately
comprised of hydrocarbon compounds. However, petroleum may also
contain non-hydrocarbon compounds in which sulphur, oxygen, and/or nitrogen atoms are combined with carbon and hydrogen. Common examplesof non-hydrocarbons found in petroleum are nitrogen, carbon dioxide, andhydrogen sulphide.
Petroleum Resources are defined as the total quantities of discovered (including hydrocarbon produced already from known accumulations) andundiscovered petroleum at a specific date in a given area.

DEFINITION OF FREE AND
ASSOCIATED GAS
There are several definitions offree and associated gas in the oil
industry. Some organisations andcompanies define associated gas
only as dissolved gas, whichmeans that gas cap is regarded
as free gas.
SPE define associated gas tocomprise gas dissolved in oil andgas in gas cap. CCOP has chosen to follow the SPE definition.

2.2.

Petroleum resources originally in-place

Resources originally in place comprise the petroleum resources which aremapped/unmapped by geological methods, and which are estimated bygeological and petroleum technological methods, to be in place in a deposit. Gas originally in place is divided into free gas and associated gas.
According to SPE’s definition (H.B.Bradley: SPE: Petroleum Engineering
Handbook, 1987) associated gas is defined as natural gas, commonly
known as gas cap, that overlies and is in contact with crude oil in the reservoir. Non-associated gas is defined as natural gas in reservoirs that do
not contain significant quantities of crude oil. This means that gas cap andsolution gas are categories under associated gas, and that gas in reservoirs that not contain significant quantities of crude oil or do not containcrude oil at all are classified as non-associated gas. By NGL (Natural Gas
Liquid) originally in place is meant components dissolved in free gas, all ofwhich will be converted to NGL phase by means of the current/planned gas
processing.

2.3.

Recoverable resources

Recoverable resources comprise the total deliverable petroleum quantities,
from the start of production to the cease of production, based on the current understanding of the quantities in place and the recovery factor. Recoverable resources can be subdivided into two categories: potential recoverable resources and reserves. Only reserves are anticipated to becommercially recoverable at present date.
Undiscovered recoverable resources are defined as the total estimatedquantities of petroleum at a specific date to be recoverable from accumulations that remain to be discovered.

CCOP Petroleum Resource Classification System

Page 5

2.4. The Framework of CCOP petroleum resource classification system

THE CCOP PETROLEUMRESOURCE CLASSIFICATIONSYSTEM

In order to have a consistent system the CCOP Petroleum Resource Classification System is entirely based on recoverable petroleum resources.
The classification system comprises the following two major parts (Fig.1):
undiscovered recoverable resources and discovered recoverable resources.

Petroleum Resources
Undiscovered resources
Speculative Resources
Hypothetical Resources

The undiscovered recoverable resources are further subdivided into
speculative and hypothetical resources. The discovered recoverable resources are further subdivided into potential recoverable resources andreserves. For further subdivision (see Fig. 1) of the reserves, the CCOP
Petroleum Resource Classification System has adopted the Reserve Classification as described and published by the Society of Petroleum Engineers (SPE) and the World Petroleum Congresses (WPC) in March 1997.

Discovered Resources
Potential Resources
Reserves
Unproved reserves
Possible Reserves
Probable Reserves
Proved Reserves
Proved Undevel. Reserves
Proved Devel. Reserves

Some organisations, companies and countries might want to report theirpetroleum resources as in-place quantities on an aggregated level. Even
though this is not in accordance with the proposed CCOP Petroleum Resource Classification System, the basic CCOP classification concept canalso be used for in-place resources.

Discovered Resources

Undiscovered Resources

Discovered Resources comprise the total discovered deliverable petroleum quantities fromthe start of production to the cease of production, based on current understanding of thequantities in place and the recovery factor.

The total estimated quantities of
petroleum to be recoverable fromaccumulations that remain to bediscovered.

Increasing segregation

Reserves
Petroleum which are anticipated to be commercially recovered fromknown accumulations from a given date forward.

Proved Reserves

Unproved Reserves

Petroleum that can be estimatedwith reasonable certainty to becommercially recovered.

Unproved reserves are less certain
to be recovered than proved
reserves.

Developed
Reserves

Undeveloped
Reserves

Probable
Reserves

Possible
Reserves

These areexpected to be
recovered fromexisting wells.

These areexpected to be
recovered fromnew wells.

These aremore likely
than not to be
recovered.

These are lesslikely than likely
to berecovered.

Potential
Resources

Hypothetical
Resources

Speculative
Resources

These are notcommercially
producible atpresent date.

Resources inmapped prospects that are
not yet drilled.

Resources inprospects thathave not yet
been mapped.

(may be further
subdivided)(may be published with uncertainty range)(may be published with uncertainty range)

Increasing certainty
Figure 2.

The major principles and a schematic description of the petroleum resource categories in the
CCOP classification system

CCOP Petroleum Resource Classification System

Page 6

3. Undiscovered petroleum resources
Estimates of undiscovered resources are arrived at by means of geological, geophysical, and geochemical data, which are chiefly derived fromsurface geological and geophysical surveys. Based on compilation of thesedata into geological models and maps, hydrocarfrequency
bon plays are defined.
Discovery of petroleum
accumulations in suchplays is contingent uponthat a set of geologicalfactors is in place simulminimum
modemaximum
taneously.
volumeA prospect is a mappable, possible petroleum accumulation thatis relying on a reservoir entrapped by sealing rocks andcharged with hydrocarbons. The
prospect is called a lead if it is avery low probability of existenceof one of the three factors.
A play is a geographically andstratigraphically delimited area
where a set of specific geologicalfactors is in place simultaneously,
thus making it possible to discover petroleum in producible
quantities. Such geological fa ctors are reservoir rocks, traps,
mature source rocks and migration paths, plus the condition thatthe traps were formed before themigration of petroleum came toan end. All fields, discoveries andprospects within the same play
are characterised by the play’s
specific set of geological factors
and can therefore be disti nguished from fields, discoveries
and prospects of other plays.

The estimated quantities
cumulative frequency (“larger than”)
ofhypotheticalandspeculative resources are100
based on the probabilistic
80
approach. The estimatedquantities are displayed
60
on a frequency distribu40
tion curve and are subdivided into Low, Expected
20(or Mean) and High val0
ues as shown in Fig. 3.
volumeLow
Median (P50)High
For example, the Low
and High values may
Uncertainty in volume estimatesmean that at least the Figure 3.
quantities at the 90illustrated by frequency diagrams.
percentile and the 10percentile, respectively,
remain to be discovered. Note that different organisations and companies
may chose different percentiles for the Low and the High values. The Low
percentile may vary from 75 to 95%, and the High percentile may vary from
5 to 25%. Expected value means the area under the cumulative frequency
curve.
The geological risk or the probability of geological success is the chance ofthe geological model being correct, i.e. the chance of finding at least theminimum quantity of recoverable petroleum as indicated at the distribution
curve. The geological risk is established based on technical assessment of
key geological variables (e.g. trap, reservoir, source and retention). In play
analysis, the geological probability factor is subdivided into a play probability factor and an average prospect probability factor. For confirmed plays
the play probability factor is equal to one.
Undiscovered petroleum resources can be subdivided into two categories:
speculative resources and hypothetical resources.

CCOP Petroleum Resource Classification System

Page 7

Confirmed plays contain aminimum of one discovery of
producible quantities of petroleum. It is thus confirmed that thecritical factors are in place simultaneously for these plays.
Unconfirmed plays contain no
discovered petroleum for the time
being. This may be a result of
having drilled only dry wells in theplay, or of not having started
exploration activities.

3.1.

Speculative resources

Speculative Resources is referred to the unmapped prospects that have
not yet been mapped in the basin. The unmapped resources are estimatedby play assessment methods. The total resources of such plays compriseboth discovered and undiscovered resources. The unmapped resources
are the difference between the plays’ total resources and the discovered
and mapped resources. In general, most organisations carry out play assessments only on the undiscovered resources. A statistical aggregation of
all play assessments will give the estimate of the total undiscovered resources.

3.2. Hypothetical resources
Hypothetical resources comprise resources which are mapped in the formof prospects, but which have not yet been discovered by drilling. It is uncertain if the estimated resources are actually in place. Prospects may be
identified in undrilled frontier provinces as well as in reservoirs underlying
or adjacent to producing fields. The resource estimates are given a probability of discovery. The estimates of the total hypothetical resources are
given by statistic aggregation of the risk-weighted resource estimate ofeach prospect in a play or a basin.

SPECULATIVESPECULATIVERESOURCESRESOURCESHYPOTHETICALHYPOTHETICALRESOURCESRESOURCESPOTENTIAL
POTENTIAL
RECOVERABLERECOVERABLERESOURCESRESOURCESPOSSIBLE
POSSIBLE
RESERVESRESERVESPROBABLE
PROBABLE
RESERVESRESERVESUNDEVEL.
UNDEVEL.
PROVEDPROVEDRESERVESRESERVESDEVELOPEDDEVELOPEDPROVEDPROVEDRESERVESRESERVES
Figure 4.

The dynamic movement between resource categories

CCOP Petroleum Resource Classification System

Page 8

4. Discovered petroleum resources
The Discovered Petroleum Resources can be sub-divided into potential
resources and reserves.

A petroleum deposit is defined
as an accumulation of petroleum
in a geological unit limited by therock characteristics by structuralor stratigraphic boundaries, contact surface between petroleum
and water in the formation, or a
combination of these. All the
petroleum comprised is in pressure communication throughliquids or gas.
A discovery is a petroleum deposit or several petroleum deposits combined (i.e. they havebeen discovered in the same
exploration well) in which theexistence of mobile petroleum
has been made probable throughtesting, sampling or logging.

4.1.

Potential Resources

Potential Resources is defined as the discovered resources that are recoverable but not economically producible at a specific date due to economic,
political, environmental or technological reasons. Potential Resources include all volumes of known hydrocarbons that lack the technology to be
produced or are economically unacceptable in today’s environment. Whilethese volumes do not meet the requirements to be classified as reserves,
they are a potential resource to the country where they exist.
Generally, potential recoverable resources refer to the amount of petroleum, of which the recovery project would be feasible based on reasonableassumptions about the success of additional data acquisition, an improved
technology from current research, relaxation in the market constraints
and/or the term and conditions for implementation. Potential Resources
may include:•

Accumulations being held in inventory such as marginal fields, relinquished fields, fields under dispute, or reservoirs with inconclusive
data.

•

Accumulations that will probably be commercially recoverable in thenear future/short term, under currently forecasted conditions but further
evaluation work will be required before they can qualify as reserves.
Examples are new discoveries undergoing appraisal or fields undernegotiation.

•

Accumulations that have no plans for developments in the near future/short term because they are judged to be non-commercial undercurrently forecasted conditions based on their size, location, technology requirements or economics.

•

Improved Oil Recovery (IOR) that changes characteristics of the fluidin the reservoir through steam, gas, or chemical.

•

Non-producible reservoir due to:a) adverse parameters such as very low or erratic porosity development, low permeability, high pressure and geopressure dissolvedgas.
b) unfavourable petroleum parameters such as gravity and viscosity.
c) extreme non hydrocarbon content, e.g. CO2 and H2S.

In order to separate between Potential Resources and Reserves (seechapter 4.2), there should be less than 10% probability of the Potential recoverable resources to be commercially recovered if the probabilistic approach is used for definition of reserve categories.
Depending on national needs, potential recoverable resources can be subdivided into two subcategories, long-term potential recoverable resources

CCOP Petroleum Resource Classification System

Page 9and short-term potential recoverable resources. The size of the hydrocarbon volume is in most cases the main criteria to differentiate between
these categories.

4.2.
CCOP has adopted the SPE/WPC
reserve classification and definitions as of March 1997, since thisis the only internationally recognised system. The SPE/WPC
committee based their system on
the old and well-established terminology “proved, probable and possible reserves” that has been in use
among the western petroleum ni
dustry for more than half of the
century and in its very early origin
was derived from the coal industry.
The following text is based on thecore definitions of the text about
reservesaspublishedby
SPE/WPC, March 1997.

Reserves

Reserves are those quantities of petroleum, which are anticipated to becommercially recovered from known accumulations from a given date forward. All reserve estimates involve some degree of uncertainty. The uncertainty depends chiefly on the amount of reliable geologic and engineering data available at the time of the estimate and the interpretation of these
data. The relative degree of uncertainty may be conveyed by placing reserves into one of two principal classifications, either proved or unproved.
Unproved reserves are less certain to be recovered than proved reserves
and may be further sub-classified as probable and possible reserves todenote progressively increasing uncertainty in their recoverability.
Estimation of reserves is done under conditions of uncertainty. The methodof estimation is called deterministic if a single best estimate of reserves ismade based on known geological, engineering, and economic data. The
method of estimation is called probabilistic when the known geological,
engineering, and economic data are used to generate a range of estimates
and their associated probabilities. Identifying reserves as proved, probable,and possible has been the most frequent classification method and gives
an indication of the probability of recovery. Because of potential differencesin uncertainty, caution should be exercised when aggregating reserves ofdifferent classifications.
Reserve estimates will generally be revised as additional geologic or engineering data becomes available or as economic conditions change. Reserves do not include quantities of petroleum being held in inventory, andmay be reduced for usage or processing losses if required for financial reporting.

AGGREGATINGRESERVE ESTIMATES
Most countries and oil companies
aggregate or summarise proved
plus probable plus possible reserves to become the total reserves. This is statistically not correct when probabilistic methods areused for determining the reservecategories.
The
probabilistic
method for defining what is proved,
probable and possible should
therefore not be adopted. The
CCOP working group therefore
strongly recommends the CCOP
member countries to define thethree reserve categories on basisof the qualitative measures described by SPE/WPC in the follow ing chapters 4.2.1 and 4.2.2.

Reserves may be attributed to either natural energy or improved recovery
methods. Improved recovery methods include all methods for supplementing natural energy or altering natural forces in the reservoir to increase ultimate recovery. Examples of such methods are pressure maintenance,
cycling, water-flooding, thermal methods, chemical flooding, and the use of
miscible and immiscible displacement fluids. Other improved recovery
methods may be developed in the future as petroleum technology continues to evolve.

4.2.1.

Unproved reserves

Unproved reserves are based on geologic and/or engineering data similar
to that used in estimates of proved reserves; but technical, contractual,
economic, or regulatory uncertainties preclude such reserves being classified as proved. Unproved reserves may be further classified as probablereserves and possible reserves.
Unproved reserves may be estimated assuming future economic conditions different from those prevailing at the time of the estimate. The effectof possible future improvements in economic conditions and technologicaldevelopments can be expressed by allocating appropriate quantities ofreserves to the probable and possible classifications.

CCOP Petroleum Resource Classification System

Page 10

4.2.1.1.

Possible reserves

Possible reserves are those unproved reserves which analysis of geologic
and engineering data suggests are less likely to be recoverable than probable reserves. In this context, when probabilistic methods are used, there
should be at least a 10% probability that the quantities actually recovered
will equal or exceed the sum of estimated proved plus probable plus possible reserves.
These general guidelines are recommended rather than the probabilistic approach for definition of
the possible reserves

In general, possible reserves may include:(1) Reserves which, based on geological interpretations, could possibly
exist beyond areas classified as probable.
(2) Reserves in formations that appear to be petroleum bearing based onlog and core analysis but may not be productive at commercial rates.
(3) Incremental reserves attributed to infill drilling that are subject to technical uncertainty.
(4) Reserves attributed to improved recovery methods when (a) A projector pilot is planned but not in operation and (b) Rock, fluid, and reservoir
characteristics are such that a reasonable doubt exists the project will
be commercial, and(5) Reserves in an area of the formation that appears to be separated
from the proved area by faulting and geologic interpretation indicatesthe subject area is structurally lower than the proved area.

4.2.1.2.
For certain reservoirs, geophysicaltechnology combined with regional
geological knowledge has shownthat reserves are identified withvery high confidence, even though
they do not stick entirely to thegiven definitions of SPE/WPC. One
example is the Faulted Sand Playof Thailand. In such special cases,
the specific reservoir geologicalunderstanding should overrun thegeneral criteria.

These general guidelines are recommended rather than the probabilistic approach for definition of
the possible reserves

Probable reserves

Probable reserves are those unproved reserves which analysis of geologic
and engineering data suggests are more likely than not to be recoverable.
In this context, when probabilistic methods are used, there should be atleast a 50% probability that the quantities actually recovered will equal or
exceed the sum of estimated proved plus probable reserves.
In general, probable reserves may include:(1) Reserves anticipated to be proved by normal step-out drilling where
sub-surface control is inadequate to classify these reserves as proved.
(2) Reserves in formations that appear to be productive based on well log
characteristics but lack core data or definitive tests and which are notanalogous to producing or proved reservoirs in the area.
(3) Incremental reserves attributable to infill drilling that could have beenclassified as proved if closer statutory spacing had been approved at
the time of estimate.
(4) Reserves attributable to improved recovery methods that have been
established by repeated commercially successful applications when (a)A project is planned but not in operation and (b) Rock, fluid, and reservoir characteristics appear favourable for commercial application.
(5) Reserves in an area of the formation that appear to be separated fromthe proved area by faulting and the geologic interpretation indicates the
subject area is structurally higher than the proved area.
(6) Reserves attributable to a future work-over, treatment, re-treatment,change of equipment, or other mechanical procedures, where suchprocedure has not been proved successful in wells which exhibit similar behaviour in analogous reservoirs, and(7) Incremental reserves in proved reservoirs where an alternative interpretation of performance or volumetric data indicates more reserves
than can be classified as proved.

CCOP Petroleum Resource Classification System

Page 11

4.2.2.

Proved reserves

Proved reserves are those quantities of petroleum which, by analysis ofgeological and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, fromknown reservoirs and under current economic conditions, operating methods, and government regulations.
If deterministic methods are used, the term reasonable certainty is intended to express a high degree of confidence that the quantities will berecovered. If probabilistic methods are used, there should be at least 90%
probability that the quantities actually recovered will equal or exceed theestimate.
Establishment of current economic conditions should include relevant historical petroleum prices and associated costs and may involve an averaging period that is consistent with the purpose of the reserve estimate, appropriate contract obligations, corporate procedures, and government
regulations involved in reporting these reserves.
In general, reserves are considered proved if the commercial producibilityof the reservoir is supported by actual production or formation tests. In thiscontext, the term proved refers to the actual quantities of petroleum reserves and not just the productivity of the well or the reservoir. In certain
cases, proved reserves may be assigned on the basis of well logs and/or
core analysis that indicate the subject reservoir is hydrocarbon bearing andis analogous to reservoirs in the same area that are producing or havedemonstrated the ability to produce on formation tests.
The area of the reservoir considered as proved includes:(1) The area delineated by drilling and defined by fluid contacts, if any.
(2) The undrilled portions of the reservoir that can reasonably be judged
as commercially productive on the basis of available geological andengineering data.

These general guidelines are recommended rather than the probabilistic approach for definition of
the possible reserves

In the absence of data on fluid contacts, the lowest known occurrence ofhydrocarbons controls the proved limit unless otherwise indicted by definitive geological, engineering or performance data.
Reserves may be classified as proved if facilities to process and transport
those reserves to market are operational at the time of the estimate or
there is a reasonable expectation that such facilities will be installed.
Reserves which are to be produced through the application of establishedimproved recovery methods are included in the proved classification when:(1) Successful testing by a pilot project or favourable response of an installed program in the same or an analogous reservoir with similar rockand fluid properties provides support for the analysis on which the
project was based, and(2) It is reasonable certain that the project will proceed.
Reserves to be recovered by improved recovery methods that have yet tobe established through commercially successful applications are includedin the proved classification only:(1) After a favourable production response from the subject reservoir fromeither(a) A representative pilot or(b) An installed program where the response provides support for the
analysis on which the project is based and(2) It is reasonably certain the project will proceed.

CCOP Petroleum Resource Classification System

Page 12

4.2.3.
The reserve status categories havebeen included in the CCOP classification system to separate theproved reserves into developed
and undeveloped proved reserves.
The definition of proved undeveloped reserves applies to thosereserves that are defined asproved, but not yet developed. The
definition of proved developed
reserves applies to all developed
reserves, since developed reservesconceptually should be regarded asproved reserves.

Reserve status categories

Reserve status categories define the development and producing status ofwells and reservoirs.

4.2.3.1.

Undeveloped reserves:

Undeveloped reserves are expected to be recovered:(1) From new wells on undrilled acreage.
(2) From deepening existing wells to a different reservoir, or(3) Where a relatively large expenditure is required to(a)
Recomplete an existing well, or(b)Install production or transportation facilities for primary or improved recovery projects.

4.2.3.2.

Developed reserves:

Developed reserves are expected to be recovered from existing wells including reserves behind pipe. Improved recovery reserves are considereddeveloped only after the necessary equipment has been installed, or when
the costs to do so are relatively minor. Developed reserves may be subcategorised as producing or non-producing.
Producing: Reserves subcategorised as producing are expected to be recovered from completion intervals which are open and producing at thetime of the estimate. Improved recovery reserves are considered producing
only after the improved recovery project is in operation.
Non-producing: Reserves subcategorised as non-producing include shut-in
and behind-pipe reserves. Shut-in reserves are expected to be recoveredfrom (1) completion intervals which are open at the time of the estimate but
which have not started producing, (2) wells which were shut-in for market
conditions or pipeline connections, or (3) wells not capable of production
for mechanicalreasons. BeUNDISCOVERED RESOURCES
Oil/NGL
Gas
Total
hind-pipe
reSpeculative Resources
serves are exHypothetical Resources
pected to be
Total Undiscovered Resources
recovered fromzones in exPOTENTIAL RESOURCES
Oil/NGL
Gas
Total
istingwells,
Total Potential Resources
which will require
addiRESERVES
Oil/NGL
Gas
Total
tional complePossible Reservestion work or
Probable Reserves
future recomProven Undeveloped Reserves
pletion prior to
Proven Developed Reserves
the start of
Total Reserves
production.
RECOVERABLE RESOURCES

Oil/NGL

Gas

Total

Total Produced Reserves
Remaining Recoverable Resources
Total Recoverable Resources

Figure 5.

CCOP Petroleum Resource Classification System

An example of a petroleum resource classification scheme
Page 13

5. Current systems in CCOP member countries
5.1. China
In China, petroleum resources are classified into two categories: discovered and undiscovered. Discovered resources are also defined as reserves, which include proved, probable and possible reserves. Within theproved reserves, there are proved developed reserves and proved undeveloped reserves. Under the undiscovered resources, potential andspeculative resources are distinguished.

5.2. Indonesia
In Indonesia, a two-fold classification system is applied. Under the total
resources, there are proved, probable and possible resources (known as
PPP). Total resources may also be classified into identified and undiscovered resources upon customer’s needs. The identified resources include
the resources demonstrated, which may be further divided into measured(proved producing) and indicated (potentially producing), and the resources
inferred (potential but not producing yet). Undiscovered resources include
hypothetical (prospect/lead) and speculative (location unknown) resources.

5.3. Malaysia
In Malaysia, the integrated resources classification system consists of two
categories of resources: discovered and undiscovered. Recoverable resources under discovered resources include ultimate recovery and potential recovery based on commerciality, producibility and uncertainty. Reserves are defined as remaining commercial quantity of petroleum after
deduction of cumulative production from the ultimate recovery and consistof proved, probable and possible. Potential recovery includes the proved,
probable and possible as well. The undiscovered resources, i.e. speculative recovery, could be classified into low, expected and high values.

5.4. Thailand
Petroleum Resources comprise all in place volumes both discovered andundiscovered. Some of the discovered volumes cannot be recovered. The
recoverable discovered volumes consist of the volumes that have alreadybeen produced, (cumulative production), and the remaining recoverable
volumes (reserves). The reserves can be subdivided into proved, probableand possible according to their corresponding level of confidence. Some of
the undiscovered resources are estimated to be recoverable and the remains are left as unrecoverable resources. The recoverable undiscoveredresources are classified as speculative and hypothetical recovery.

CCOP Petroleum Resource Classification System

Page 14

5.5. Vietnam
In Vietnam, the current classification chart consists of two categories of
petroleum resources, discovered and undiscovered. Discovered resources
include reserves and potential resources. Reserves include proved andunproved reserves. Within the proved reserves, there are developed reserves and undeveloped reserves. Within unproved reserves, there areprobable and possible reserves. Potential resources could be classified
into two: able being reserves and extra reserves. Under the undiscoveredresources, hypothetical and speculative resources are distinguished, which
could be classified into low, expected and high values.

5.6 Other CCOP member countries
In the Republic of Korea, the petroleum industry is in its early stage and adraft of resource classification system has been proposed in accordancewith the CCOP guidelines.
In the Philippines, the work to establish a resource classification system isstill on the way, via the Philippine Petroleum Resource Assessment Project, to be implemented early 1999.
Papua New Guinea and Cambodia have not yet established their official
petroleum resource classification systems.

6. References
Bradley, H.B., 1987. SPE Petroleum Engineering Handbook.
Martinez, A.R. and McMichael, C.L., 1997. Classification of Petroleum Rethserves. Proceedings of the 15 World Petroleum Congress, Beijing(preprint). John Wiley & Sons Ltd, England
Norwegian Petroleum Directorate, 1997. Petroleum Resource Classification. Stavanger, Norway
Zainul, A.J. et al, 1997. An Integrated Approach to Petroleum Resources
Definitions, Classification and Reporting. Preprint from 1997 SPE
Asia Pacific Oil and Gas Conference, Kuala Lumpur. Society of Petroleum Engineers, Inc. SPE 38044

CCOP Petroleum Resource Classification System

Page 15

Units and conversion factors
In the petroleum industry quite a lot of different units have been used, and are in use, for measuring oil
and gas quantities, distance, area and weight. This is sometimes very confusing even for technical people
dealing with this kind of activities. We have therefore tried to summarise the most usual units and how toconvert from one to another unit. Some caution should be paid when you are using the volume conversion
factors, since they may have been measured at different physical conditions (pressure and temperature).
The factors are picked from internationally published literature.

Distance

Energy conversions

1 foot = 0.3048 meters
1 statute mile = 1,609 meters
1 nautical mile = 1,852 meters

One British Thermal Unit (Btu) is equal to the heatrequired to raise the temperature of one pound ofwater one degree Fahrenheit at or near its point of
maximum density. This unit is commonly used tocompare different energy sources.

Area
1 square mile = 640 acres = 2.59 square km
1 square km = 100 hectars
1 acre = 43,560 square feet
1 hectare = 2.471 acres

1 barrel of crude oil =5,800,000 Btu
1 cubic foot of dry natural gas =1,032 Btu
1 short ton of bituminous coal =26,200,000 Btu
1 kilowatt hour (kWh) of electricity =3,412 Btu
9
1 gigajoule (10 J) =947,820 Btu

VolumeOil equivalents
1 cubic meter = 35.3 cubic feet
1 cubic meter = 6.29 barrel
1 cubic meter = 1,000 litres
1 barrel = 159 litres
1 U.S gallon = 3.7854 litres
1 acre foot = 43,560 cubic feet
Weight1 short ton = 0.907185 metric tons = 2000 pounds
1 long ton = 1.01605 metric tons = 2240 pounds
1 metric ton = 1,000 kilograms
Petroleum volumes and weights
This conversion depends on the density of the oil.
In general, the density is in the range of 0.8-0.9
kilograms per cubic meter. By using an averagedensity of 0.85, following conversions may beused:
1 (metric) ton of oil:
1 (metric) ton of oil:

1.1765 cubic metres of oil
7.4 barrels of oil

Oil equivalents (abbreviated o.e.) are used forsummation of oil-, gas- and NGL/condensate
quantities. This term/unit is used to express theamount of energy that will be released upon combustion of the different types of petroleum. However, it is important to note that this measure isvery inaccurate because of large variations in thecomposition of the various oils and gases. This3
term is used both for cubic meters (Sm o.e.), tons
(t.o.e.) and for barrels (BOE).
31000 Sm of gas:
3
1 Sm of oil:1 ton of NGL/cond.:
1 ton of oil:1 ton of oil:1 barrel of oil:3
1 Sm o.e.:
1 t.o.e.:

Some commonly used abbreviations:
1 MBBL
1 MMBBL
1 BCF
1 TCF

CCOP Petroleum Resource Classification System

3

1 Sm o.e.
3
1 Sm o.e.
3
approx. 1.3 Sm o.e.
1 t.o.e.
3
1.1765 Sm o.e.
1 BOE
6.29 BOE
approx. 7.4 BOE= 1000 barrels
6= 1 million barrels (10 barrels)
9= 1 billion cubic feet (10 cu. feet)12= 1 trillion cubic feet (10 cu. feet)

Page 16

The Resource Evaluation and Planning Project(REP)

The resource Evaluation and Planning project (REP) is funded by the Norwegian Agency for Development Cooperation (NORAD) and started in January 1996. The project is the third major
project within the petroleum sector that is funded by NORAD, namely Working Group on Resource Assessment (WGRA) in the period 1989 to 1991, Oil and Gas Resource Management(OGRM) in the period 1992 to 1994 and presently the REP-project that will be finalised in 1999.
The goal of the REP-project is to contribute to sustainable development of the petroleum sector
in the CCOP member countries by providing governments with reliable information about theirpetroleum resources and value estimation. This should allow appropriate planning and management of petroleum exploration and exploitation, and thus in the long term be instrumental inproviding higher revenue from the petroleum industry. The purpose of the project is:-

to transfer the know-how and technologies for quality ensured petroleum resource estimation in an economic context and hydrocarbon resource management options,-to assist CCOP member countries in effective data management and establish resource
management systems in individual CCOP member countries,-

to create the government awareness of the necessity of attracting external enterprises
and establish realistic commercial expectations and priorities,-

to develop human resources in order to fill the gap between personnel and decisionmakers in CCOP member countries.

The REP-project was divided in two phases. Phase 1 concerned basic training courses in petroleum geology and geophysics for the least developed countries in the CCOP-region, namely
Cambodia, The Philippines and Vietnam. Thailand was also admitted to participate since they
provided geological excursions. Phase 1 lasted for one year.
Phase 2, the main phase, comprise workshops and seminars with focus on resource evaluation,transfer of software tools, some bilateral seminars and training courses for Cambodia and Vietnam and two working groups on petroleum resource classification and on exploration risk assessment. The current publication is a result of the first working group.
CCOP and NORAD are also discussing a future follow-up of the REP-project. Petroleum Policy
and Management is the most probable theme for this follow-up activity.
Participating CCOP-member countries in the REP-project are Cambodia, China, Indonesia, Malaysia, Papua New Guinea, The Philippines, Republic of Korea, Thailand and Vietnam.

March 1999

This publication is funded by
the Norwegian Agency for Development Cooperation(NORAD)through the REP-project

CCOP Technical Secretariat
2nd Floor, OMO Building
110/2 Sathorn Nua Road, Bangrak
Bangkok 10500
THAILAND
Telephone: (66-2) 234 3578-9, 637 7001-2
Fax: (66-2) 237 1221-2
E-mail: ccopts@ccop.or.th
Website: http://www.ccop.or.th

March 1999