China National Petroleum Corporation

Yang Hua

May 2012

Chinese Petroleum Resource Classification

System and mapping to UNFC

EGRC Third Session

Geneva, 2-4 May 2012

2

� Background

� Chinese Petroleum Resource Classification System (CPRCS)

� Mapping to UNFC 2009

� Discussion

OUTLINE

3

Background

200BC

1950’s

1978

1982

1984

1988

1998

2000

2004

Petroleum (gas) was discovered in China 2000 years ago

China started the development of modern oil and gas industry.

Ministry of Petroleum issued a geologic reserve estimation guideline.

Research Institute of Petroleum E&D set up criteria for oil and gas reserves

estimation.

China National Mineral Reserves Committee was formed and devoted to

the promotion of integrated study and setting of mandatory criteria for oil

and gas reserves estimation.

China National Standard Bureau issued the Committee’s criteria.

Ministry of Land and Resources (MLR) was set up.

MLR has organized the amendment of the standard and criteria considering

UNFC/SPE definitions.

The newly amended system was approved and issued by the General

Administration of Quality Supervision, Inspection and Quarantine of

P.R.China, and effective in 2005.

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Senior Management

Corp. Upstream

Government Registration and Booking

Ministry of Land and Resources

Government Audit

Petroleum Reserves Office (PRO)

Ministry of Land and ResourcesLocal Reserve Management

Regional E&P Company

Reserves Estimation

Reserve Project Teams

Regional E&P Research Institute

Background – Reserves Activity Organization

Oil Companies

Reporting route

Management route

P1

Chinese Petroleum Resource Classification System

�Geological knowledge based three-class system

�Classification is based on the phases or the maturity of

E&D, according to geology knowledge gained.

�Different data requirements are assigned to different

classes of reserves to ensure the E&D phases and

certainties required

�The classes of recoverable reserves are related to the

geologic reserves

�Thresholds of industrial flow are used to be

commercial criteria

Basic Features

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� Consist with international standards, UNFC, PRMS, SEC, etc.

� Keeping continuity on basic major features of the system by taking the history and reality of standards in China into account; such as three-class-framework, categorizing principals, etc.

� aligns the SPE/SEC definitions of Proved reserves and parts of those considerations of Probable and Possible reserves of SPE;

� Adopts international comparable terminology of reserves (3P system) for the use of international cooperation, evaluation and study;

Amendment of CPRCS

Principals and Highlights

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UndiscoveredResources

PossibleReserves

Residual

Inferred

ProbableReserves

Indicated

ProvedEUR or GUR

Residual

Measured

Discovered

OOIP/OGIP

Total Oil & Gas Resources

Geology-knowledge-based three-class system

Modified Classification Framework

Geologic Reserves

Residual

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Sub-economic

ProductionProved Developed

Remaining Reserves

Proved Developed Proved Undeveloped

Economic

Proved EUR or GUR

Modified Classification Framework

P1 aligns with the PRMS/ SEC

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Modified Classification Framework

Source from: Comparison of Selected

Reserves and Resource Classifications and

Associated Definitions, OGRC, Dec.2005

Comparison with PRMS

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Proved Developed Proved Undeveloped

Total Petroleum Resources Initially-in-place

Discovered(Geological Reserves)

Undiscovered Resources(Initially-in-place)

Recoverable Residual

Production Remaining Economically Recoverable Reserves

ProvedEUR

Residual

MeasuredGeological Reserves

IndicatedGeological Reserves

InferredGeological Reserves

PossibleEUR

Residual

Economic Sub-economic

ProbableEUR

Residual

Economic Sub-economic

Mapping to UNFC 2009

111111,121

322122,222

223,323

344

343342341

334

221,321

UNFC 2009 code

111Sale & Non-sale

E1

E2

E3

Production

E1

E2

E3

Sales

Production

Non-sales

Production

UNFC 2009 CPRCS 2005

Mapping to UNFC 2009

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Discussion

�Challenges for National Oil Companies

�Challenges for current standards to manage

unconventional resources

�Application promotion of UNFC 2009

Challenges for National Oil Companies

Obligations

Sustainable energy supply, effective resources management,

business processes and financial reports.

Challenges

to meet multi-goal requirements, face various standards, huge

workload every year, great amount of data……

Solution ?

� clarify ideas in targeting, planning, organizing……

� to find more effective way or tool……

� to establish/construct consistent resources-database system……

Challenges for Unconventional Resource

Characteristics

distribute extensively without apparent WOC, no clear phases of exploration and Development, easy to ‘discovery’ but difficult to recovery, high heterogeneity in qualities, more complex storage processes ……, in a word, less certainty with more risk.

Sketch map of conventional and unconventional resources distribution, Zou Caineng,2010

Challenges for Unconventional Resource

Challenges

Based on current standards, no big changes in categories, but major

ones are just P1 and resource……

How to manage effectively ?

Strategy policies in upgrading?

Development tendency ?

� more and further works may needed in exploration categories ……

� corresponding relations among E,F,G categories increase ……

P1

Resources

Application Promotion of UNFC 2009

Advantages

Universally acceptable and internationally applicable, powerful

(strong code) ……

Challenges

Aims to overlap most requirements and systems, and work more instructively and effectively……

Suggestion ?

� Let more people know, understand, and adopt

training, work shop, free assistance, joint-study, etc.

� Strong technical supports for development

Comments are welcome and should be forwarded to:Att: Yang HuaE-mail: yanghua@petrochina.com.cnTel & Fax: +(86-10)-83598640

Thanks to UNECE and EGRCThanks to UNECE and EGRC

Thanks to EverybodyThanks to Everybody