Probabilistic estimation of reserves and difference between probabilistic and determine methods

In 1997, the Society of Petroleum Engineers (SPE) and the U.S. Securities and Exchange Commission (SEC) recognized the probabilistic estimation of reserves. This method has been accepted by many international oil companies and institutions; however, the determine estimation of reserves is still dominant in China. The probabilistic estimation method was briefly introduced in this article. The difference between the two methods under different uncertainty conditions was compared. The applicability of each method was discussed. Meanwhile, the impact of function form on probabilistic estimation was analyzed. It has been concluded that the probabilistic estimation of reserves takes full account of the conservative, the most likely and the optimistic variety of situations, hence provides a more comprehensive understanding of reserves. The probabilistic estimation is applicable to bigger uncertainties while the determine estimation is applicable to smaller uncertainties. Since the function form of probabilistic estimation parameter may obviously influence estimation result and is subjective, the appropriate function form in strict accordance with relevant standards is demanded to eliminate or weaken the influence.