Talking Energy Talk

How are oil and gas reserves calculated?

Alberta is blessed with an abundance of oil and gas reserves—in fact, by most expert accounts our oil reserves rank among the largest in the world.

That certainly sounds impressive, but what does it really mean? First, let’s look at what ”reserves” actually are.

Essentially, reserves are a term of measurement that refers to the estimated volume of oil and gas in the ground.

Different parts of the world have slightly different definitions of reserves, but in Canada reserves are defined as the “estimated remaining quantities of oil and natural gas and related substances anticipated to be recoverable from known accumulations, as of a given date.”

As the word estimate implies, the determination of reserve volumes is an interpretive science, keeping in mind that most sciences fall into this category. Remaining quantities means that none of the production up to the date of the estimate is included.

A known accumulation means that the reservoir has been drilled into and tested by one or more wells, so we know it’s there, and the given date is usually the end of the year, although the estimate could be performed at any time.

A team of engineers, geologists and geophysicists work together to analyze multiple sources of data to determine a reserve volume that they think is realistic.

This analysis can take place on something as small as a single well, or as large as an entire reservoir (a group of wells all producing from the same accumulation). The more wells, tests and other data that is available, the more accurate the estimate becomes.

Government agencies estimate and maintain records of reserves within their jurisdictions. While these estimates can vary in accuracy, it is the comparison of these estimates that leads to the conclusion that Alberta is near the top of the class when it comes to reserves.

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