Discovered Petroleum Initially in Place

Unlocking the Potential: Discovering Petroleum Initially in Place (PIIP)

In the oil and gas industry, understanding the vastness of the resource is paramount. The term "Discovered Petroleum Initially in Place" (PIIP) is a cornerstone in this understanding. Simply put, PIIP represents the total estimated volume of oil or natural gas trapped within a known accumulation at a specific point in time. It encompasses both the oil and gas already extracted and the remaining reserves yet to be tapped.

Imagine a giant underground reservoir filled with oil or gas. PIIP is the total amount of hydrocarbons held within that reservoir, like the water in a full bathtub. It's a static snapshot of the resource's potential at a given moment, offering a crucial benchmark for exploration and production strategies.

Delving Deeper: Commercial vs. Sub-commercial PIIP

PIIP is further categorized into two key segments:

Commercial PIIP: This refers to the estimated amount of oil or gas that can be extracted economically, given current technology and market conditions. It's considered recoverable and is classified as Reserves.
Sub-commercial PIIP: This segment includes the estimated amount of oil or gas that is not currently economically viable to extract, due to factors like low concentration, difficult geological conditions, or unfavorable market prices. This portion is considered potentially recoverable and is classified as Contingent Resources.

Why PIIP Matters

Understanding PIIP is critical for:

Resource Assessment: It provides a comprehensive picture of the oil and gas resources available in a specific area, guiding exploration efforts and investment decisions.
Production Planning: It helps in planning production rates, optimizing extraction methods, and predicting future production volumes.
Market Analysis: It provides insights into the potential supply of oil and gas, influencing market dynamics and pricing strategies.
Environmental Impact Assessment: It allows for informed decisions regarding the environmental impact of extraction and helps in planning responsible resource management.

Moving Forward with PIIP

PIIP is a dynamic figure. As extraction progresses, the total amount of oil or gas in place decreases, leading to adjustments in the estimated PIIP. Moreover, technological advancements and changing market conditions can influence the classification of sub-commercial PIIP into commercial PIIP.

The concept of PIIP is essential for responsible and efficient management of the world's oil and gas resources. By understanding and utilizing this vital tool, the industry can navigate the complex landscape of exploration, production, and market dynamics, ensuring a sustainable and future-oriented approach to resource utilization.

Test Your Knowledge

Quiz: Unlocking the Potential: Discovering Petroleum Initially in Place (PIIP)

Instructions: Choose the best answer for each question.

1. What does PIIP stand for?

a) Petroleum Initially in Place b) Potential Initially in Place c) Production Initially in Place d) Projected Initially in Place

Answer

a) Petroleum Initially in Place

2. Which of the following is NOT a key element of PIIP?

a) Total estimated volume of oil or gas in a reservoir b) Current market price of oil or gas c) Oil and gas already extracted d) Remaining reserves yet to be tapped

Answer

b) Current market price of oil or gas

3. What is the key difference between Commercial PIIP and Sub-commercial PIIP?

a) Commercial PIIP is extracted using advanced technology, while Sub-commercial PIIP uses traditional methods. b) Commercial PIIP is located in onshore reservoirs, while Sub-commercial PIIP is found offshore. c) Commercial PIIP is economically viable to extract, while Sub-commercial PIIP is not. d) Commercial PIIP is used for domestic consumption, while Sub-commercial PIIP is exported.

Answer

c) Commercial PIIP is economically viable to extract, while Sub-commercial PIIP is not.

4. Which of the following is NOT a benefit of understanding PIIP?

a) Resource Assessment b) Production Planning c) Determining the best drilling technique d) Market Analysis

Answer

c) Determining the best drilling technique

5. How does PIIP change over time?

a) It remains constant throughout the life of a reservoir. b) It increases as new reserves are discovered. c) It decreases as oil or gas is extracted. d) It fluctuates based on market demand.

Answer

c) It decreases as oil or gas is extracted.

Exercise:

Scenario: An oil company has discovered a new oil field. They have estimated the PIIP to be 100 million barrels. Based on current technology and market conditions, they believe 60% of the oil can be extracted economically.

Task: Calculate the following:

Commercial PIIP: How many barrels of oil are considered commercially viable?
Sub-commercial PIIP: How many barrels of oil are considered sub-commercial?

Exercice Correction

**Commercial PIIP:** 100 million barrels * 60% = 60 million barrels **Sub-commercial PIIP:** 100 million barrels - 60 million barrels = 40 million barrels

Books

Petroleum Geology: This classic textbook by Selley, et al. provides a comprehensive overview of petroleum exploration and production, including sections on resource estimation and PIIP.
Petroleum Reservoir Engineering: This book by Craft and Hawkins dives deep into reservoir engineering concepts, including the estimation of reserves and PIIP.
The Economics of Petroleum Exploration and Production: This book by Attanasi and Smith analyzes the economic aspects of the oil and gas industry, including the importance of PIIP for investment decisions.

Articles

"Estimating Original Oil in Place: A Review of Techniques and Challenges" by T.D. Edwards and J.S. Cartwright (Journal of Petroleum Technology, 2010): This article examines various methods for estimating PIIP and highlights the challenges and uncertainties associated with the process.
"The Impact of Shale Gas on Global Oil and Gas Markets" by E.A. Van der Burgt (Energy Policy, 2013): This article explores the implications of unconventional resource development on global energy markets, including the role of PIIP in evaluating shale gas reserves.
"A Framework for Assessing the Economic Value of Oil and Gas Resources" by J.P. Foucher (Resource Policy, 2017): This article discusses the economic valuation of oil and gas resources, emphasizing the importance of PIIP as a key input for economic analysis.

Online Resources

Society of Petroleum Engineers (SPE): The SPE website offers numerous resources related to petroleum engineering, including technical papers and presentations on PIIP estimation and resource assessment.
American Association of Petroleum Geologists (AAPG): The AAPG website provides a wealth of information on petroleum geology, exploration, and resource evaluation, including relevant articles and publications on PIIP.
International Energy Agency (IEA): The IEA website offers insights into global energy markets and resource availability, including data on oil and gas reserves and PIIP estimates.

Search Tips

"Discovered Petroleum Initially in Place" + "estimation techniques": This search will reveal articles and resources on different methods for estimating PIIP.
"PIIP" + "case studies": This search will lead to examples of how PIIP is applied in real-world oil and gas projects.
"PIIP" + "resource assessment": This search will bring up resources on how PIIP is used to evaluate the potential of oil and gas fields.