1. INSTRUCTOR © 2017, John R. Fanchi
All rights reserved. No part of this manual may be reproduced in any form without the express written permission of the author.
© 2004 John R. Fanchi All rights reserved. Do not copy or distribute.

2. To the Instructor
The set of files here are designed to help you prepare lectures for your own course using the text Introduction to Petroleum Engineering, J.R. Fanchi and R.L. Christiansen (Wiley, 2017)
File format is kept simple so that you can customize the files with relative ease using your own style. You will need to supplement the files to complete the presentation topics.

3. THE FUTURE OF ENERGY © 2017, John R. Fanchi
All rights reserved. No part of this manual may be reproduced in any form without the express written permission of the author.
© 2004 John R. Fanchi All rights reserved. Do not copy or distribute.

4. Outline Oil and Gas Production and Consumption Resources and Reserves
Conventional Oil and Gas
Unconventional Oil and Gas
Homework: IPE Ch. 2

5. OIL AND GAS PRODUCTION AND CONSUMPTION
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6. Top 5 Oil Producing Nations as of 2014 [US EIA Petroleum, 2015; BP, 2015]
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7. Top 5 Oil Consuming Nations as of 2014 [US EIA Petroleum, 2015; BP, 2015]
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8. Top 5 Dry Natural Gas Producing Nations as of 2014 [US EIA Petroleum, 2015; BP 2015]
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9. Top 5 Top 5 Dry Natural GAs Consuming Nations as of 2014 [US EIA Petroleum, 2015; BP, 2015]
© 2004 John R. Fanchi All rights reserved. Do not copy or distribute.

10. RESOURCES AND RESERVES
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11. Resource Pyramid

12. Hydrocarbon Resource Triangle
Conventional:
Smaller volume
Easy to develop
High Quality
Medium Quality
Low-perm oil
Tight gas sands
Unconventional:
Larger volume
Difficult to develop
Gas shales
Heavy oil
Coal gas
Unconventional reservoirs are formations that cannot be produced at economic flow rates or that do not produce economic volumes of oil and gas without stimulation treatments or special recovery processes and technologies
Gas hydrates
Oil shales
After Fig. 1, SPE (2011)
© 2004 John R. Fanchi All rights reserved. Do not copy or distribute.

13. Volumetric Reserves Volume of oil = (V ×  × So × R) / Bo
Volume of gas = (V ×  × Sg × R) / Bg
where
V = reservoir volume
 = porosity
So = oil saturation
Sg = gas saturation
R = recovery factor
Bo = oil FVF
Bg = gas FVF

14. Ultimate Recovery = Past Production + Reserves
Amount of Oil and/or Gas Produced over entire life
Production
Amount of Oil/Gas Produced to date
Reserves
Amount of Oil/Gas Forecast to be produced from date going forward

15. Deterministic and Probabilistic Reserves
“When a single best estimation of reserves is made based upon known geological, engineering, and economic data”
Probabilistic
“When the known geological, engineering, and economic data are used to generate a range of estimates and their associated probabilities”

16. SPE/WPC Reserves Proved Probable Possible
● Those quantities of petroleum, which by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations.
● There should be at least a 90% probability (P90) that the quantities actually recovered will equal or exceed the estimate.
Probable
● Those additional reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves.
● There should be at least a 50% probability (P50) that the quantities actually recovered will equal or exceed the estimate.
Possible
● Those additional reserves which analysis of geoscience and engineering data suggests are less likely to be recoverable than Probable Reserves.
● There should be at least a 10% probability (P10) that the quantities actually recovered will equal or exceed the estimate.
© 2004 John R. Fanchi All rights reserved. Do not copy or distribute.

17. Reserves and Probability for a Normal Distribution
Proved Reserves = P90 = mean – 1.28×(std dev)
Probable Reserves = P50 = mean
Possible Reserves = P10 = mean ×(std dev)
© 2004 John R. Fanchi All rights reserved. Do not copy or distribute.

18. PRMS Petroleum Resources Management System
Initially-in-Place
(PIP)
Discovered PIP
Commercial
Production
Reserves 1P 2P 3P
Sub-Commercial
Contingent
Resources 1C 2C 3C
Unrecoverable
Undiscovered
PIP
Prospective
Source: A.W. Stokes, paper SPE , summarized in pp , JPT [Dec 2014]

19. PRMS Resource Class (RC)
Discovered
PIP
Production
Project Maturity Subclasses RC
Reserves
On production 1
Approved for Development 2
Justified for Development 3
Contingent
Resources
Development Pending 4
Development Unclarified or on Hold 5
Development Not Viable 6
Unrecoverable 7
Undiscovered
Prospective
Prospect 8
Lead 9
Play 10
Increasing Chance to be Commercial
Source: A.W. Stokes, paper SPE , summarized in pp , JPT [Dec 2014]

20. CONVENTIONAL OIL AND GAS
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21. Nations with Largest Crude Oil and Natural Gas Proved Reserves in [US EIA Petroleum website, 2015]
Crude Oil Reserves
(billion barrels)
Natural Gas Reserves
(trillion cubic feet)
World
1656
6972
Venezuela
298
Russia
1688
Saudi Arabia
268
Iran
1193
Canada
173
Qatar
885
157
United States
338
Iraq
140
291
Kuwait
104
Turkmenistan
265
United Arab Emirates 98
215 80
196
Libya 48
Nigeria
181 37
Algeria
159 36
China
155
Kazakhstan 30
112
© 2004 John R. Fanchi All rights reserved. Do not copy or distribute.

22. Regional Distribution of Crude Oil and Natural Gas Proved Reserves in 2014 [US EIA Petroleum website, 2015]
Crude Oil Reserves
(billion barrels)
Natural Gas Reserves
(trillion cubic feet)
World
1656
6972
Middle East
804
2813
Central & South America
328
Eurasia
2178
North America
220
Africa
606
127
Asia & Oceania
540
119
422 46
277
Europe 12
136
© 2004 John R. Fanchi All rights reserved. Do not copy or distribute.

23. World Proved Reserves from 2000 - 2014 [US EIA Petroleum, 2015]
© 2004 John R. Fanchi All rights reserved. Do not copy or distribute.

24. UNCONVENTIONAL OIL AND GAS
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25. Nations with Largest Shale Oil Resources at the end of 2011 [WEC WER, 2013]
(billion barrels)
2011
United States
3706
China
354
Russia
248
Congo
100
Brazil 82
© 2004 John R. Fanchi All rights reserved. Do not copy or distribute.

26. Shale Plays in the contiguous United States [Source: US EIA, 2015]
© 2004 John R. Fanchi All rights reserved. Do not copy or distribute.

27. Natural Bitumen (Tar Sands) Total Original Oil in Place
Nations with Largest Volumes of Natural Bitumen and Extra Heavy Oil at end 2008 [WEC, 2010, Tables 4-1 and 4-2]
Natural Bitumen (Tar Sands)
Total Original Oil in Place
(billion barrels)
Extra Heavy Oil
Canada
2434
Venezuela
2446
Kazakhstan
421
United Kingdom
11.8
Russia
347
Azerbaijan
8.9
United States 53
China
8.8
Nigeria 38
Italy
2.7
© 2004 John R. Fanchi All rights reserved. Do not copy or distribute.

28. Size of Unconventional Gas Resources in the United States circa January 2009 [NGSA Unconventional Gas, 2009]
Resource
Trillion Cubic Feet
Source
Permeability
Tight gas
309
US EIA
microdarcy
Shale gas
742
US FERC
nanodarcy
Coal gas
163
US PGC
Cleats
© 2004 John R. Fanchi All rights reserved. Do not copy or distribute.

29. A burning methane hydrate chunk - inlay is a lattice of the clathrate
Methane Hydrate Structure USGS Burning_hydrate_inlay_US_Office_Naval_Research.jpg‎
Water
Methane
Burning ice
From:
A burning methane hydrate chunk - inlay is a lattice of the clathrate

30. The Gas Hydrates Resource Pyramid
Source: Roy Boswell and Timothy S. Collett, “The Gas Hydrate Resource Pyramid,” Fire in the Ice, Methane Hydrate R&D Program Newsletter, Fall 2006.

31. Working with Communities
ANSI – API Bulletin 100-3: Community Engagement
Consequence of unconventional resource development
Prepare communities for exploration activities
Minimize disruption to communities
Manage resources
Source: J. Donnelly, “Community Engagement,” JPT, Sep. 14, pg. 18

32. QUESTIONS?
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33. SUPPLEMENT
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