Reserves and resources – Introduction and Background

Resources are hydrocarbons which may or may not be produced in the future. A resource number may be assigned to an undrilled prospect or an unappraised discovery. Appraisal by drilling additional delineation wells or acquiring extra seismic data will confirm the size of the field and lead to project sanction. At this point the relevant government body gives the oil company a production licence which enables the field to be developed. This is also the point at which oil reserves can be formally booked.

Oil reserves are primarily a measure of geological risk - of the probability of oil existing and being producible under current economic conditions using current technology. The three categories of reserves generally used are proven, probable, and possible reserves.

• Proven reserves - defined as oil and gas "reasonably certain" to be producible using current technology at current prices, with current commercial terms and government consent- also known in the industry as 1P. Some Industry specialists refer to this as P90 - i.e. having a 90% certainty of being produced.
• Probable reserves - defined as oil and gas "Reasonably Probable" of being produced using current or likely technology at current prices, with current commercial terms and government consent - Some Industry specialists refer to this as P50 - i.e. having a 50% certainty of being produced. - This is also known in the industry as 2P or Proven plus probable.
• Possible reserves - i.e. "having a chance of being developed under favourable circumstances" - Some industry specialists refer to this as P10 - i.e. having a 10% certainty of being produced. - This is also known in the industry as 3P or Proven plus probable plus possible.

Reserves and resources – Key Statistics and Commentary

The UK still has substantial oil and gas reserves remaining despite having produced 36 billion boe over the last 40 years. Based on BERR figures, Oil & Gas UK estimates that there are somewhere between 16 and 25 billion boe still to be recovered, with current trends delivering about 20 billion boe.

It should be noted that the “25 billion boe” figure is based on BERR’s mid-case view which still adopts a conservative approach to ultimate recovery rates; BERR’s high case implies that there could be up to 39 billion boe still to be recovered which provides an indication of the overall potential of the UKCS.

UKCS Projected Reserves and Resources

Tale of Two Futures (2006 data)

Reserves and resources – Supplementary Statistics and Commentary

For more information, see the Supplementary Statistics Section.