An Approach to Estimating Reserve Volumes by Discounting Unauthorized Production Via Crude Oil Theft

Reserves are typically estimated and re-validated throughout the life of a producing field. The accuracy of this estimation is based on the availability of relevant and current data from that reservoir or field and other factors. There are several methods for estimating reserves, but the choice of which method is to be applied is often based on the data available per time. However, these methods are known to be associated with varying degrees of uncertainties arising from quality of data, the assumptions adopted and the experience of the evaluator. The biggest uncertainty in reserve estimation lies in the inability of the commonly available methods to estimate and discount the huge volumes lost due to unauthorized production by third parties, through crude oil theft, illegal bunkering activities, and spills. This leads to the gross overestimation of reserves and the economic viability of an asset, especially in onshore and shallow offshore assets where such illegal activities are typical and rampant. This paper showcases an approach of estimating reserves, through the integration of multidisciplinary data, which enables the estimation and discounting of crude oil volumes lost due to illegal production from a reservoir.