David H. Root

Computer Monte Carlo simulation in quantitative resource estimation

The method of making quantitative assessments of mineral resources sufficiently detailed for economic analysis is outlined in three steps. The steps are (1) determination of types of deposits that may be present in an area, (2) estimation of the numbers of deposits of the permissible deposit types, and (3) combination by Monte Carlo simulation of the estimated numbers of deposits with the historical grades and tonnages of these deposits to produce a probability distribution of the quantities of contained metal.Two examples of the estimation of the number of deposits (step 2) are given. The first example is for mercury deposits in southwestern Alaska and the second is for lode tin deposits in the Seward Peninsula.The flow of the Monte Carlo simulation program is presented with particular attention to the dependencies between grades and tonnages of deposits and between grades of different metals in the same deposit.

The Enigma of Oil and Gas Field Growth

Growth in estimates of recovery in discovered fields is an important source of annual additions to United States proved reserves. This paper examines historical field growth and presents estimates of future additions to proved reserves from fields discovered before 1992. Field-level data permitted the sample to be partitioned on the basis of recent field growth patterns into outlier and common field sets, and analyzed separately. The outlier field set accounted for less than 15% of resources, yet grew proportionately six times as much as the common fields. Because the outlier field set contained large old heavy-oil fields and old low-permeability gas fields, its future growth is expected to be particularly sensitive to prices. A lower bound of a range of estimates of futu e growth was calculated by applying monotone growth functions computed from the common field set to all fields. Higher growth estimates were obtained by extrapolating growth of the common field set and assuming the outlier fields would maintain the same share of total growth that occurred from 1978 through 1991. By 2020, the two estimates for additions to reserves from pre-1992 fields are 23 and 32 billion bbl of oil in oil fields and 142 and 195 tcf of gas in gas fields.

Resource Constraints in Petroleum Production Potential

Geologic reasons indicate that the dominant position of the Middle East as a source of conventional petroleum will not be changed by new discoveries elsewhere. The share of world crude oil production coming from the Middle East could increase, within 10 to 20 years, to exceed 50 percent, under even modest increases in world consumption. Nonconventional resources of oil exist in large quantities, but because of their low production rates they can at best only mitigate extant trends. Increased production of natural gas outside the United States, however, offers an opportunity for geographically diversified energy supplies in the near future.

U.S. Geological Survey Estimation Procedure for Accumulation Size Distributions by Play

How much oil and gas remains to be discovered in the United States is an important question for petroleum geologists. This paper presents an overview of the methods used by the U.S. Geological Survey in its assessment by play of undiscovered resources of the onshore and state offshore areas of the United States. For the 1989 assessment, new estimation procedures were designed to aid the geologist in the assessment of the size distribution for the remaining population of undiscovered accumulations. This paper presents the details of that procedure and examples of its application for two oil plays in Wyoming and Montana: the Minnelusa play in the Powder River basin and the Basin- Margin Anticline play in the Bighorn basin. In the new procedure, a truncated shifted Pareto (TSP) distribution was fitted to the size data for the discovered accumulations, which were generally split into three sequential parts: the first, second, and last one-third of the accumulations discovered in each play. Parameters from the fitted curves describing size and shape of the discovered accumulations provided a reference model for use in estimating the size distribution of the undiscovered accumulations in a play. In a given play, these accumulation size distributions multiplied by the estimated distribution for the numbers of undiscovered accumulations produced the resource estimates. This method provides a simple, straightforward, and flexible means for the geologist to use statistics as an aid in estimating undiscovered re ources.

Distribution and quantitative assessment of world crude-oil reserves and resources

The enumeration of world crude-oil reserves and resources is a difficult undertaking. One must rely on data gathered by others and, through various spot-check and cross-check mechanisms, distinguish the reasonable from the unreasonable. Estimating techniques vary; standards of measurement vary; classification of the reported elements differ; and, in some cases, even the recognition of what is being reported is obfuscated by language and nomenclatural ambiguities. Therefore, to improve understanding of world petroleum resources, it is prudent to describe the methodologies and measurement standards explicitly, to disaggregate the data as much as possible to gain insight into the source of the differences, and to standardize the classification and nomenclature scheme to establish unambiguous communication.

Future Growth of Known Oil and Gas Fields

Estimating the amounts of oil and gas that will be produced from known fields beyond proved reserves was an important part of the 1987 assessment of U.S. oil and gas potential. These resources, inferred reserves, are comparable in magnitude to proved reserves. Their estimation was based upon the only nationwide series of successive estimates of proved reserves of fields grouped by year of discovery. Although that data series ended in 1979, it documented a pattern of field growth that could be extrapolated for known fields. The estimated inferred reserves for the lower 48 states were 16 billion bbl of crude oil and 96 tcf of natural gas.

Small Fields in the National Oil and Gas Assessment

In the 1989 National Oil and Gas Assessment prepared by the U.S. Geological Survey (USGS) and the Minerals Management Service, undiscovered oil and gas resources in small fields were assessed separately from resources in fields containing more than 1 million bbl of oil equivalent. This paper concerns the USGS Part of the study: onshore and state waters in the conterminous United States. After the resources in small fields were assessed by geologists, statistical techniques were used to allocate these resources to field-size distributions at the province level. The total numbers of small fields remaining to be discovered is estimated at about 77,800. They account for about 10.6 billion bbl of oil equivalent or 20% of the undiscovered resources in the conterminous United st tes. When an economic analysis was applied to the small fields, none of the offshore small fields were estimated to be commercially developable. For the onshore study area, about 52% of the small oil fields and 46% of the small gas fields are commercially developable. Overall, because more hydrocarbons are contained in the larger size classes of the small fields, about 70% of the undiscovered resources in small fields is expected to be commercially developable.

Probabilistic Assessment of World Petroleum Resources and Reserves at Fourteenth World Petroleum Congress: Abstracts from World Petroleum Congress, Stavanger, 1994 World Petroleum Assessment and Analysis

The occurrence and quantity of world petroleum resources appears to be well understood. The numbers are so great, however, that even minor variants in the total picture can be responsible for enormous localized industrial activity. Specific knowledge of the widespread local occurrences of oil and gas, therefore, is important to economic development and to the free market distribution of energy. It is also clear, however, that a large proportion of the recoverable petroleum resources are found in only a few selected localities. We believe that, worldwide, recoverable conventional oil and gas exist in ultimate quantities approximating 2300 billion barrels (370 Gm3) of oil and 12 000 trillion cubic feet (340 TM3) of gas. These values are limited by our concepts of world petroleum geology and our understanding of specific basins; nonetheless, continued expansion of exploration activity, around the world, has resulted in only minimal adjustments to our quantitative understanding of ultimate resources. Reserves reporting has been one of the greatest hindrances to a thorough understanding of world resources because we are just now gaining an understanding of field growth and what is actually being calculated and reported from various localities. Unconventional resources are present in large quantities, in particular in the Western Hemisphere, and are of a dimension to substantially contribute to world reserves should economic conditions permit.