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UNFC Application Example: Testing of Norwegian Resource Classifications to UNFC.
Pilot Study performed by Norwegian Petroleum Directorate (NPD) and Statoil
Tom Andersen, NPDUNFC Workshop Mexico City 27‐28 September 2012
OutlineIntroduction
Pilot studyNPD classification and reportingThe mapping of Norwegian Resource Account to UNFC”General rules mapping”Detailed classification of individual projects
Comparison of the two approaches
Conclusions
The Norwegian Petroleum Directorate (NPD)
• A governmental specialist directorate and administrative body
• Established in 1972 • Reports to the Ministry of Petroleum and Energy (MPE)
• Headquarter in Stavanger• A staff of a little over 200
Petroleum sector in Norway
70 fields in production
15 fields under development
136 discoveries
1450 exploration wellbores
3600 development wellbores
7.4 billion scm o.e. remaining(46 billion boe)
44 %
24 %
6 %
7 %
19 %
Pilot Study: Testing NPD classification to UNFC
• General rule categorisation of NPD project status categories to UNFC
• Individual project classification to UNFC• Investigate if Government’s needs are met by the UNFC
system• Propose improvements
03/10/2012 5
Oil Companies Annual Reporting to Norwegian authorities
• By regulation to the Petroleum Law:• ”Reporting shall include corporate financial data, projects, resource volumes and forecasts for production, costs and environmental discharges/emissions as specified by the recipient.”
• Reporting is done according to NPD classification, which is project based.
• 23 companies reported 240 files for appr 850 projects• Reported data is basis for establishing the yearlyresource account
10/3/20127
NPD classification (2001)Classes and Project Categories
Reserves
Contingentresources
Undiscoveredresources
12 F/A3 F/A
In productionUnder development
Decided for development
4 F/A5 F/A
6 7 F/A
89
In planning phaseRecovery likely, but undecided
Recovery not very likelyNot evaluated / Improved recov. pot.
ProspectsLeads and plays
Discovered
Un-discovered
Classes Project Categories
Historic prod. 0 Sold and delivered
F = First, A = Additional
Rec
over
able
quan
titie
s
UNFC – 2009,with examples of classes
03/10/2012 8
UNFC; classes and sub‐classes.
9
Classification of project by ”General rulescategorization”
Norwegian Resource Account in UNFC
UNFC ‐ 2009 As of 2010 NPD
12 935 Total
Sales Production 5 521 Sold and delivered 0
Non‐sales production
Class Sub‐class E F G Category Class
Commercial projects
On production 1 1.1 1, 2, 3 2 506 In production 1
ReservesApproved for Development 1 1.2 1, 2, 3 221 Under development 2 F/A
Justified for Development 1 1.3 1, 2, 3 396 Decided to recover 3 F/A
Potentially Commercial Projects
Development pending 2 2.1 1, 2, 3 654 In planning phase 4 F/A
Contingentresources
Development on hold 2 2.2 1, 2, 3 570 Recovery likely but
undecided 5 F/A
Non‐Commercial Projects
Development unclarified 3.2 2.2 1, 2, 3 397
Not yet evaluated/Improved rec.
Projects7 F/A
Development not Viable 3.3 2.3 1, 2, 3 N/A Recovery not very likely 6
Additional quantities in place 3.3 4 1, 2, 3 N/A
Exploration Projects
No sub‐classes defined 3.2 3 4 2 670
Prospects 8 UndiscoveredresourcesLeads and Plays 9
Additional quantities in place 3.3 4 4 N/A
MSm³ o.e.
New general rules
• Closer investigation of UNFC and NPD definitions and project characteristics suggest alternative general transformation rules:
• E‐axis• Most RC 4 projects qualify for E1.1, (not E2)
• They are economic on the basis of current market conditions rather than expected to become economically viable in the near future
• F‐axis• Most RC 5 projects qualify for F2.1 (not F2.2)• Most RC 7F projects qualify for F2.1 (not F2.2)
• Project activities are ongoing to justify development in the foreseeable future, rather than on hold or being significantly delayed.
RC = NPD Project Status Category
Norwegian Resource figures of 31.12.2011 basedon “general rule categorisation” (2012)
As of 2011
13 126 Total
5 743 Sold and delivered 0
Class Sub‐class E F G Category ClassOn production 1 1.1 1, 2, 3 2 344 In production 1Approved for Development
1 1.2 1, 2, 3 433 Under development 2 F/A
Justi fied for Development
1 1.3 1, 2, 3 384 Decided to recover 3 F/A
1.1 2.1 1, 2, 3 594 In planning phase 4 F/ADevelopment
pending2 2.1 1, 2, 2 798
Recovery l i kely but undecided
5 F/A
Development on hold
2 2.2 1, 2, 3 190 Improved rec. Projects 7 A
Development unclari fied
3.2 2.1 1, 2, 3 185 Not yet evaluated 7 F
Non‐Commercial Projects
Development not Viable
3.3 2.3 1, 2, 3 N/A Recovery not very l i kely 6
3.3 4 1, 2, 3 N/A
Prospects 8
Leads and Plays 9
3.3 4 4 N/A
MSm³ o.e.
4 2 455Undiscovered resources
Additional quanti ties in place
UNFC ‐ 2009 NPD
Sales Production
Potentially Commercial Projects
Contingent resources
Additional quanti ties in place
Exploration Projects
No sub‐classes defined
3.2 3
Non‐sa les production
Commercial projects Reserves
Classification of individual projects to UNFC
Mapping of individual projects to UNFC
General rule categorisation applied as start
Projects classified as reserves is straight forward. There are no alternatives.
For the “contingent resources” projects, more classes have to be considered when classifying the projects.
The white boxes are optional classes ready to cater for more granularity than the example classes in Fig 2 in the UNFC-publication can offer.
Attribute: ”Project stoppers”Uncertainty in resource volume
Reservoir properties
Technology is lacking
Lack of infrastructure in the area
No gas solution
Lack of capacity in existing systems
No commercial agreement
Rig availability
Environmental requirements
HSE requirements
Other
Consequences of “project stoppers”• Technology is lacking
• RC4A (from E1.1F2.1 to E2F2.1)
• RC5A (from E2F2.1 to E2F2.2)
• Lack of infrastructure in the area• RC4F (from E1.1F2.1 to E1.1F2.2)
• RC4A (from E1.1F2.1 to E1.1F2.2)
• RC5F (from E2F2.1 to E2F2.2)
• RC5A (from E2F2.1 to E2F2.2)
• No gas solution• RC4F (from E1.1F2.1 to E1.1F2.2)
• RC5F (from E2F2.1 to E2F2.2)
• RC5A (from E2F2.1 to E2F2.2)
• Lack of capacity in existing systems • RC4F (from E1.1F2.1 to E1.1F2.2)
• RC5F (from E2F2.1 to E2F2.2)
• RC5A (from E2F2.1 to E2F2.2)
• No commercial agreement• RC4F (from E1.1F2.1 to E2F2.1)
• RC4A (from E1.1F2.1 to E2F2.1)
Decision Gates (DG)
DG versus UNFC categories
• DG 1 ‐ Decision on concretization.• One economic solution for developing the project has been demonstrated, and the project proceeds into a concept identification and selection phase
• If the project have passed DG1, the Norwegian Resource category should be RC4 and not RC5• 10 projects were reclassified from RC5 to RC4 and moved from E2 to E1.1 if no other reason keep them in E2
DG checks of UNFC categories
• DG 2 ‐ Decision to continue. • Equivalent to concept selection and start‐up of pre‐engineering. A cost estimate with reduced uncertainty will be prepared.
• If DG2 is reported close (i.e.2012) then E1.1 was used even if the project stoppers indicate E2• They are economic on the basis of current market conditions rather than expected to become economically viable in the near future
• 17 projects were moved including those 10 already moved due to DG1
Norwegian Resource Account of based on individual project categorisation to UNFC classes (2012)
The amounts represents the G1 + G2 except for E3.2F3
Norwegian Resource Account of 31.12.2011 Unit: Million Standard Cubic Meter Oil Equivalents (Mill S m3 O.E.)
Comparison
•General rules categorisation 2012• Project individual categorisation 2012
Mapping results
Norwegian Resource Accounts per 31.12.2011 according to UNFC (2012)
Mapping to UNFC- classes defined by UNFC Sub-categories
Aggregated mapping to UNFC-classes defined by UNFC categories
Mapping results
Norwegian Resource Accounts per 31.12.2011 according to UNFC (2012)
Mapping to UNFC- classes defined by UNFC Sub-categories
Aggregated mapping to UNFC- classes defined by UNFC categories
Mapping results
Norwegian Resource Accounts per 31.12.2011 according to UNFC (2012)
Mapping to UNFC- classes defined by UNFC Sub-categories
Aggregated mapping to UNFC- classes defined by UNFC categories
Lessons learned
• The granularity of UNFC may make this a stronger tool for resource management than our current NPD classification (especially if the F and A can be included as sub‐categories)
• The usability of the UNFC is considerably reduced if application is restricted to map the example classes given in UNFC fig 1
• The QC and guidelines of the Norwegian Reporting Regulations must be improved for the “Project stopper” attributes
Summary• UNFC was successfully used to classify the projects that constitutes the total Norwegian Resource Accounts
• This year’s ”General rules categorisation” to smaller UNFC‐classes and sub‐classes was successful. Considered more correct than mapping of “primary” classes because important granularity was not accounted for
• We have to utilize the sub‐classes and sub‐categories to capture the variability of the projects.
• The differences between direct project classification and class mapping results are minor. For high level aggregation “General Rules categorisation” might be sufficient.
• This pilot demonstrate that the mapping between NPD system and the UNFC is acceptable
• UNFC is well suited for National level use by Governments
Thank you!
Acknowledgement to Pilot Study Group:Kjell Reidar Knudsen (NPD)Astrid Nåvik (NPD, now Statoil)Karin Ask (Statoil)Magnar Haugvaldstad (NPD)Omar Ali (NPD)Per Blystad (NPD)Tom Andersen (NPD)Øystein Lie (Statoil)