Uncertainty and Risk (Oil and Gas Resource Assessment)

Program Objectives


This 5-day introductory course is designed to provide the attendee with the fundamental information and tools to evaluate “resource assessments” from the basin to the prospect level and to understand the basics of risk analysis and economic assessment. The fundamentals of resource assessment methodology are covered at all scales, telescoped down from global perspective to speculative resource potential of an individual prospect. The participant will learn how different assessment methods have evolved through time and how they are applied as well as which methods are best suited for evaluating basins, plays, or prospects. The accepted approach today is to first evaluate critical elements required for a "Total Petroleum System" in the basin. Each "system" contains "plays", defined as a set of known or possible oil and gas accumulations in a similar geologic setting, such as source rock, migration pathway, timing, trapping mechanism, etc. The participants will learn how to estimate the geologic risk for the various components, such as trap, charge, source, and timing for each play or prospect. The next step is to assign probability distributions for the reservoir parameters, such as area of closure, reservoir thickness, porosity, etc for each prospect being evaluated or for the estimated number of accumulations in each play. Monte Carlo simulations and appropriate risk analysis yield the risked reserve potential for the individual prospect or risked distributions for the accumulation sizes and numbers for each play within a basin. By applying various economic parameters to these distributions, "economically recoverable" resources can be estimated for the prospect, play, or basin.
Course Outline
Day 1
  • Introduction 
  • Description of terminology used in assessments 
  • Estimation of world’s resources and the future of oil and gas resources 
  • Historical assessment methods 
  • PRMS (SPE sponsored guidelines) 
  • Standards pertaining to estimating and auditing reserves information 
Day 2
  • Risk, uncertainty, and estimating
  • Geotechnical estimates of uncertainty 
  • Risk analysis and petroleum exploration 
  • Basics of risk analysis as applied to prospects, plays, and basins
  • Estimating reserves
  • Chance of prospect success


Day 3
  • Data-based resources assessments: “mature” and “immature basins”
  • Assessing prospect and play portfolios 
  • Managing portfolios as business ventures 
Day 4
  • Evaluation of the components of the “Total Petroleum System”
  • Economic analysis of undiscovered resources 
  • Industry practices of exploration risk analysis 
  • Integrated exercise 
Day 5
  • Uses and “abuses” of resource assessments 
  • Interpretation of results 
  • Final exam