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)