About The Petroleum System in Business
Let’s start with the end in mind. Any geoscience work performed in the E&P business should lead to an improved understanding of opportunity Volume and/or Risk and/or Value. Below we’ll see how the Petroleum System does that, but first we need to understand how Volume, Value and its associated Risk are derived.
Opportunity Volume
Volumes in-place in a petroleum reservoir are calculated using the Volumetric Equation. It derives inputs from the first five Petroleum System sub-elements – or ‘risk’ elements – of Charge (Source Potential and Charge Access), Trap (Container Geometry and Column Capacity) and Reservoir Storage:
Liquid volume (when brought to surface conditions) = A . dof . h . phi . (1-Sw) / ofvf
where
A = area
dof = fractional degree of fill
h = net thickness of reservoir
phi = fractional porosity of net reservoir
Sw = fractional water saturation of net reservoir
ofvf = dimensionless oil formation volume factor of reservoir fluid in net reservoir ( = volume of reservoir fluid at reservoir conditions per volume of liquid at surface conditions); and
volume, area and height are in the same units
Gas volume (when brought to surface conditions) = A . dof . h . phi . (1-Sw) . gfvf
where the new parameter
gfvf = dimensionless gas formation volume factor (volume of gas at surface conditions per volume of reservoir fluid at reservoir conditions) 
In-place volumes are converted to a recoverable volume using a recovery factor provided by an engineer working with the in-place volumes and associated information, combined with additional inputs from the geoscientist concerning the final sub-element, Reservoir Deliverability. 
Opportunity Value
The value of a given volume of petroleum depends strongly on the liquid and / or gas production rates achievable, which are calculated by an engineer working with the same geoscience team inputs as for the recovery factor. The second geoscience-based value driver is the product quality of the liquid and gas produced to surface. Rates are calculated using the Deliverability Equation:
Liquid rate (at surface conditions) is proportional to h . k . dP / (u . ofvf)
where
h = net thickness of reservoir
k = permeability of net reservoir
dP = pressure difference between formation and wellbore
u = viscosity of reservoir fluid in net reservoir
ofvf = dimensionless oil formation volume factor of reservoir fluid in net reservoir (volume of reservoir fluid at reservoir conditions per volume of liquid at surface conditions)
Gas rate (at surface conditions) is proportional to h . K . dP . gfvf / visc
where the new parameter
gfvf = dimensionless gas formation volume factor (volume of gas at surface conditions per volume of reservoir fluid at reservoir conditions) 
Product Quality:
Flash liquids – comprising petroleum components that exist in a liquid phase when produced to atmospheric conditions – usually contain more than just hydrocarbons (carbon and hydrogen). Sulfur, nitrogen and metals present in non-hydrocarbon compounds, and other non-hydrocarbon impurities such as organic acids, impart a technical discount to the crude oil value on sale. These compounds are a function of the Organofacies, maturity, phase state and alteration history of the petroleum. For example, large volumes of light oil and condensate that have come onto the US market from the productive parts of ‘Shale Oil’ plays have low non-hydrocarbons due to their high maturity.
Flash gases – comprising petroleum components that exist in a gaseous phase when produced to atmospheric conditions – vary in their content of natural gas liquids (NGLs: ethane and higher hydrocarbons) and non-hydrocarbon impurities (chiefly H2S, CO2 and N2).
Opportunity Risk
Risk reflects the chance that we are wrong in assigning values of one or more geoscience inputs (input ranges) to the volumetric or deliverability calculations:
- If a parameter in either calculation (derived from their respective Charge, Trap and Reservoir Elements) has a ‘zero outcome’, this will lead to the complete absence of an accumulation – a clear failure case
- If one or more parameters in either calculation have an outcome less favorable than the input value (range), the result may be an accumulation smaller than the pre-drill volume range – which is a more subtle but very real failure case
Assigning the appropriate opportunity risk to a volumetric ‘promise’ requires carefully phrased, rigorous ‘risk questions’ that link, via the quantitative input parameters, to the ‘promised’ volume (range). Basically, how sure we are that the following statements are correct:
Opportunity risking schemes that do not link up the volume prediction and risk assessment steps invite ‘loose ends’ or ‘gaps’ in risk-probability space: a significant factor in the Industry’s historic failure to find what it says it will find, on a portfolio basis. However, in the t!Ps™ scheme, all six Petroleum System sub-elements – ‘Risk Elements’ – link directly to, or provide a check on, the finally proposed volume and value calculated in the volumetric and deliverability equations. Thus, the opportunity Risk and its Volume and Value are tied together.
LEARN MORE ABOUT VOLUME AND RISK ASSESSMENT – info@ThisIsPetroleumSystems.com
