SPE, Reserves Commission agree to work on reserve classification for Russia
MOSCOW. Feb 1 (Interfax) - Russia's State Commission for Reserves (GKZ) and the Society of Petroleum Engineers (SPE) have signed a memorandum of understanding, GKZ said in a press release.
GKZ and SPE will work together on creating an agreed method for calculating oil and gas reserves and resources in Russia that is comparable to SPE's PRMS (Petroleum Resources Management System). GKZ and SPE plans to form a working group to harmonize the Russian classification system and PRMS.
GKZ said working with SPE would give Russian specialists access to international methods.
Russia's Natural Resources Ministry plans to complete the transition to a new classification of liquid hydrocarbon reserves this year. The new classification differentiates hydrocarbons by exploration maturity and economic effectiveness. In the current classification, there is virtually no economic component. Reserves and resources are identified on the basis of exploration maturity, while commercial and noncommercial reserves are differentiated by the economic component. Resources are not assessed by economic effectiveness.
Based on the results of the economic assessment, recoverable reserves are split into three groups: economically effective (under current tax regime), potentially effective (with certain changes in tax conditions, construction of transport infrastructure) and ineffective.
The subject of the economic assessment is the field. Standard costs are taken according to data from the resource developer. The standard costs used in calculations cannot deviate from industry averages by more than 20%.
Changes in categories of reserves and resources depending on exploration maturity
| Current classification | New classification |
| A (explored) | |
| B (explored) | B (proven) |
| C1 (explored) | C1 (demonstrated) |
| C2 (preliminary estimated) | C2 (inferred) |
| C3 (prospective) | D0 (prepared) |
| D1l (localized) | D1l (localized) |
| D1 (forecast) | D1 (prospective) |
| D2 (forecast) | D2 (anticipated) |
The Natural Resources Ministry earlier abandoned the version of the oil and gas reserves classification approved in 2005. It was supposed to be introduced in 2009 and then pushed back to January 1, 2012, but never went into effect.
The current classification does not make it possible to effectively structure taxation of resources developers because it gives little consideration to economics and the timetable for the start of development. State balance data on reserves inflate anticipated amounts of accumulated production by about two-fold.