Reserves and Resources
We need to know about the quantity and quality of oil and gas reserves because the prosperity of the world is dependent upon petroleum-based fuels. The debate about forthcoming oil shortages—as soon as 2004 or perhaps later in the twenty-first century—hinges on our understanding of petroleum reserves and future resources. Global catastrophic changes are predicted by some if a shortage occurs early in the twenty-first century; however, others are less concerned, because of new estimates of reserves and potential petroleum resources.
Our concepts of petroleum reserves and resources and their measurements are changing to reflect the uncertainty associated with these terms. Petroleum reserves have been largely calculated deterministically (i.e. single point estimates with the assumption of certainty). In the past decade, reserve and resource calculations have incorporated uncertainty into their estimates using probabilistic methodologies. One of the questions now being addressed are such as "how certain are you that the reserves you estimate are the actual reserves and what is the range of uncertainty associated with that estimate?" New techniques are required to address the critical question of how much petroleum we have and under what conditions it can be developed.
The goal of most industry and financial groups is to forecast future production rates, cash flow, net present values (NPV) and other measures designed to prudently manage financial and production aspects of the petroleum reserve.
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