Oil and Gas Reserves and Resources Evaluation is a discipline that mostly involves an economical look at assets or potential assets respectively, in order to provide much-needed information to a company about financial risk associated with excavation.
Oil and gas reserves and resources are similar in the respect that they present challenges, but the challenges are unique from the other.
An oil reserve is viewed in far higher regard than a resource, due to the fact that “resource” denotes crude oil and natural gas accumulations which are known to an oil and gas company, but cannot be produced in a commercial manner due to factors involving safety, difficulty, and financial investment.
Put simply, if a deposit of oil or gas in an existing resource contains oil or gas which is valued at less than it costs to excavate (not a cheap task by any stretch of the imagination) then it is commercially unviable.
What should be known is that the term “resource” is often used when there is no geological information about the reservoir available – or an amount insufficient to begin excavation. Oil and Gas Companies main business is converting resources into reserves via exploration and the utilisation of new developments in technology.
Take Fracking, for instance. The act of Fracking is a very controversial one – but Fracking is an example of a resource being taken advantage of with new technology in order to yield an amount of oil which is higher in value than the cost associated with the extraction in itself.
It should be mentioned that Fracking is not the be all and end all of turning oil and gas resources into reserves. Instead it should merely be regarded as an example of new technology making commercially unviable resources viable.
The subject itself is rather controversial, but generally, there are other technologies that are available to gain more of a yield from an excavation point, and make excavation viable.