Russian Oil Companies to Use New Reserve Classification From 2009 – Trutnev

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Russian Oil Companies to Use New Reserve Classification From 2009 – Trutnev
July 11, 2008

ARKHANGELSK. July 11 (Interfax) – Russian oil companies will move to a new oil reserve classification beginning in 2009, Natural Resources Minister Yury Trutnev said.

“From the beginning of 2009 the companies will switch to a new classification for oil reserves,” Trutnev told Interfax on Friday.

Asked to comment on oil company displeasure over the new classification system, Trutnev said he had not heard anything about it.

Earlier the Natural Resources Ministry said the transition to the new classifications for allocated hydrocarbon reserves might be postponed one or two years. However, the head of the State Reserves Commission (GKZ), Valentin Shelepov, said his organization had not received any word of a postponement and that new agreements would use the new classifications beginning January 1, 2009.

As of January 1, 2009 only 30% of hydrocarbon fields will be listed with the new classifications.

The transition period will continue for three-five years.

The method for re-evaluating reserves and the new classifications themselves will necessitate amendments and supplements. The results of the re-evaluation at a host of oil fields attracted numerous comments from the oil companies. Shelepov specifically mentioned three fields – two at Rosneft (RTS: ROSN) and one at TNK (RTS: TNKO)- BP – that have undergone the re-evaluation.

Preliminary results of the feedback from oil companies will be compiled in July, and those for unallocated fields will become available in July-August.

The Natural Resources Ministry enacted new classifications for solid subsurface resources on January 1, 2008. The classifications for oil and flammable gases will be enacted effective January 1, 2009. Both documents plan to bring the Russian classifications more closely in line with the classification systems used abroad.

The new classifications are based on the principles of economic effectiveness, the extent of geological exploration and the degree of commercial development. It clearly defines the reserve categories and introduces economic parameters that are absent from the current system. It differentiates oil and gas fields by the overall amount of reserves and the complexity of their geological structures.

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