ORGANIZATION and DEFINITIONS

for the ESTIMATION of RESERVES

and PRODUCTIVE CAPACITY of CRUDE OIL

PREFACE

This is the second of a series of Technical Reports published by the American Petroleum Institute which provide information concerning definitions, organization, procedures, and methodology used in compiling petroleum industry statistics.

Technical Report No. 2 is specifically concerned with (1) the definitions used by the API Committee on Reserves and Productive Capacity, and (2) the organization responsible for the compilation of estimates of proved reserves of crude oil, productive capacity, and related information.

The petroleum industry and the general public have long been alert to the need for information pertaining to reserves of crude oil and natural gas. In 1915, Ralph Arnold prepared an estimate of crude oil reserves. Similar estimates were prepared by the U. S. Geological Survey in 1916 and 1919. For the year 1922, estimates of crude oil reserves were prepared jointly by the U. S. Geological Survey and the American Association of Petroleum Geologists. Estimates of crude reserves were prepared by the American Petroleum Institute in 1925, and estimates for 1927 and 1933 were made by the Federal Oil Conservation Board.

The petroleum reserves of the United States have been systematically reviewed and reported on an annual basis by industry technical groups since 1936. Initially, the estimations were made by the Committee on Petroleum Reserves of the American Petroleum Institute, and were limited to reserves of crude oil, including lease condensate.

The Committee on Natural Gas Reserves was formed by the American Gas Association in 1946 for the purpose of preparing annual estimates of reserves of natural gas and natural gas liquids. Since that date, the API and A.G.A. committees have worked cooperatively to insure that all liquid hydrocarbon reserves are properly classified and reported.

In 1966, the API Committee's name was changed to the "Committee on Reserves and Productive Capacity." In addition to continuing its work with respect to proved reserves, the Committee's responsibilities were expanded to include the development of supplementary

data including the following:

1. Original oil-in-place and ultimate recovery categorized by:

2. Indicated additional reserves resulting from the future application of known

improved recovery techniques in known fields.

3. Allocations back to year of discovery of:

4.

Reserves and production data by subdivisions for the states of California,
Louisiana, New Mexico, and Texas.

5.

Crude oil productive capacity by states and by subdivisions for the states of
California, Louisiana, New Mexico, and Texas.

This report is intended primarily as a handbook for the engineers and geologists who actually prepare the detailed estimates that are aggregated and published by the American Petroleum Institute. It is anticipated that this report will also be helpful and informative to those interested in using data pertaining to U. S. crude oil reserves and productive capacity.

Washington, D. C.

June 30, 1970