Reserves, Non Producing

Understanding "Reserves, Non-Producing" in Oil & Gas

In the world of oil and gas, "reserves" refer to the estimated amount of hydrocarbons that can be economically extracted from a particular field. While the term "reserves" usually implies a certain level of production, not all reserves are actively producing. "Reserves, Non-Producing" refers to a specific category of reserves that are not currently being extracted due to various reasons.

The subcategories of "Reserves, Non-Producing" include:

1. Shut-in Reserves: This category encompasses reserves that are technically capable of production but are temporarily not producing due to various factors.

Completion Intervals: These are sections of a wellbore that are drilled and open, ready to produce, but haven't been brought online yet. This could be due to factors like waiting for optimal market conditions or prioritizing other producing wells.
Shut-in for Market Conditions: Wells may be shut in temporarily due to low market prices or lack of pipeline infrastructure. These wells are expected to resume production once conditions improve.
Mechanical Reasons: Some wells may be shut in due to mechanical issues, such as equipment failure, requiring repair or maintenance before they can resume production.

2. Behind-Pipe Reserves: These reserves are situated behind existing production wells. They represent untapped potential that can be accessed by drilling additional lateral wells or utilizing advanced technology like multilateral wells. The extraction of behind-pipe reserves requires additional capital investment and might necessitate modifications to existing production infrastructure.

Understanding the Importance of Non-Producing Reserves:

Despite not being actively producing, "Reserves, Non-Producing" play a crucial role in the overall resource picture of an oil and gas field. They represent a potential resource that can be brought into production in the future:

Increased Production: By bringing shut-in reserves online or developing behind-pipe reserves, companies can increase production and improve overall field economics.
Flexibility and Resilience: Having non-producing reserves provides flexibility to adjust production levels in response to changing market conditions, ensuring stability and resilience during economic downturns.
Future Potential: Behind-pipe reserves represent untapped potential that can be developed in the future using advanced technologies, enhancing the longevity of a field.

Considerations for Non-Producing Reserves:

Economic Viability: The economic feasibility of bringing non-producing reserves online depends on factors like oil price, production costs, and market demand.
Technical Challenges: Developing behind-pipe reserves often requires complex drilling techniques and advanced technology, potentially increasing costs and risks.
Environmental Impact: The development of non-producing reserves must be undertaken responsibly, minimizing environmental impact and ensuring compliance with regulations.

Conclusion:

"Reserves, Non-Producing" represent a vital aspect of oil and gas field management. They offer flexibility, increased production potential, and a longer-term resource base. Understanding the complexities and factors involved in non-producing reserves is crucial for making informed decisions about field development, maximizing resource utilization, and ensuring sustainable operations.

Test Your Knowledge

Quiz: Reserves, Non-Producing

Instructions: Choose the best answer for each question.

1. Which of the following is NOT a subcategory of "Reserves, Non-Producing"?

a) Shut-in Reserves b) Proven Reserves c) Behind-Pipe Reserves d) Completion Intervals

Answer

b) Proven Reserves

2. What is the primary reason for shutting in a well due to "Market Conditions"?

a) Equipment failure b) Low oil prices c) Lack of pipeline infrastructure d) All of the above

Answer

d) All of the above

3. What is the significance of "Behind-Pipe Reserves"?

a) They are already producing and contribute to current production. b) They represent untapped potential that can be accessed with additional investment. c) They are difficult to access and have no commercial value. d) They are used for environmental monitoring purposes.

Answer

b) They represent untapped potential that can be accessed with additional investment.

4. What is a key benefit of having "Reserves, Non-Producing" in an oil and gas field?

a) They ensure consistent production regardless of market fluctuations. b) They eliminate the need for additional investment in field development. c) They provide flexibility to adjust production levels based on market conditions. d) They reduce environmental impact by limiting production.

Answer

c) They provide flexibility to adjust production levels based on market conditions.

5. Which of the following is NOT a factor to consider when developing "Reserves, Non-Producing"?

a) Environmental impact b) Oil prices and production costs c) Market demand for oil and gas d) Technological advancements in drilling techniques

Answer

None of the above. All of these factors are crucial to consider.

Exercise: Analyzing Non-Producing Reserves

Scenario: An oil and gas company has a field with 100 million barrels of proven reserves. Currently, 50 million barrels are being produced, leaving 50 million barrels as "Reserves, Non-Producing." 30 million barrels are shut-in due to market conditions, and 20 million barrels are behind-pipe reserves.

Task:

Calculate the percentage of "Reserves, Non-Producing" in relation to the total proven reserves.
Identify the potential benefits of bringing the shut-in reserves online in the future.
Discuss the potential challenges associated with developing the behind-pipe reserves.

Exercise Correction:

Exercice Correction

Percentage of "Reserves, Non-Producing": 50 million barrels (Non-Producing) / 100 million barrels (Total) = 50%
Benefits of Bringing Shut-in Reserves Online:
- Increased Production: This would increase production output and revenue for the company.
- Improved Economics: Utilization of existing infrastructure could lead to lower production costs per barrel.
- Flexibility in Market Response: The company would have more flexibility to adjust production levels based on market conditions.
Challenges of Developing Behind-Pipe Reserves:
- High Capital Investment: Drilling additional lateral wells or utilizing advanced technologies is costly.
- Technical Complexity: Developing these reserves often requires advanced drilling techniques and potentially presents higher risks.
- Environmental Considerations: Developing behind-pipe reserves may require careful environmental planning and mitigation strategies.

Books

Petroleum Engineering Handbook: This comprehensive handbook provides an in-depth understanding of various aspects of oil and gas engineering, including reserve estimation and development.
The Economics of Petroleum Exploration, Development, and Production: This book explores the economic factors influencing oil and gas exploration, development, and production, including reserve valuation and production planning.
Petroleum Geology: This book offers a detailed overview of petroleum geology, covering topics like reservoir characterization, reserve estimation, and production optimization.

Articles

"Unconventional Reserves: A Growing Portion of the U.S. Oil & Gas Industry" by The U.S. Energy Information Administration: This article discusses the increasing role of unconventional reserves, which often include non-producing reserves, in the American energy landscape.
"The Impact of Shale Gas on Oil and Gas Reserves" by IHS Markit: This article analyzes the influence of shale gas development on conventional oil and gas reserves, including non-producing reserves.
"Optimizing Production from Existing Fields: The Role of Non-Producing Reserves" by Oil & Gas Journal: This article explores strategies for maximizing production from existing fields by incorporating non-producing reserves.

Online Resources

Society of Petroleum Engineers (SPE): The SPE website offers a wealth of technical resources, including research papers, conference proceedings, and training materials related to oil and gas engineering, including reserve estimation and development.
The U.S. Energy Information Administration (EIA): The EIA website provides detailed statistics and analysis on oil and gas production, reserves, and market trends.
Canadian Association of Petroleum Producers (CAPP): The CAPP website offers insights into the Canadian oil and gas industry, including information on reserve estimation and regulatory frameworks.

Search Tips

"Reserves, Non-Producing" + "oil and gas": This search will return relevant articles and resources focused on non-producing reserves within the oil and gas sector.
"Shut-in Reserves" + "oil and gas": This search will provide information specifically on reserves that are temporarily not producing due to various reasons.
"Behind-Pipe Reserves" + "oil and gas": This search will help you find resources related to untapped reserves located behind existing production wells.
"Reserves Estimation" + "oil and gas": This search will provide articles and resources on the methods and methodologies used for estimating oil and gas reserves.