TNK-BP today released the results of the independent audit of its reserves as at the end of 2007. This represents the fifth annual external audit of the company's reserves since its creation in August 2003
TNK-BP today released the results of the independent audit of its reserves as at the end of 2007. This represents the fifth annual external audit of the company’s reserves since its creation in August 2003.
The latest audit confirms that as of December 31st 2007, TNK-BP's Total Proved Reserves were 8.225 billion barrels of oil equivalent, applying SEC methodology on a life of field (LOF) basis. The addition of more than 1 billion barrels of new Proved Reserves constitutes a Total Proved SEC (LOF) reserve replacement ratio of 179%, exceeding for the fifth year in succession the company's enduring objective of at least 100% reserve replacement under these criteria.
Under PRMS (formerly SPE) criteria, Total Proved Reserves were 9.982 billion barrels of oil equivalent. This represents a Total Proved PMRS reserves replacement ratio of 297% in 2007.
In 2007, TNK-BP maintained liquids production almost flat, with growth of 0.04% versus 2006, against increasing natural decline rates in its mature field production base. This compares with the Russian industry average figure of 0.4% growth in onshore liquids production versus 2006. Total TNK-BP energy equivalent production (boe basis) was down 1.6% as a result of curtailments to Rospan gas production, while total Russian energy equivalent production was down 0.6%.
The main drivers behind TNK-BP's strong reserve replacement figures were targeted drilling, wellwork activity and improved waterflood response; sidetracking of old wells and new drilling in Samotlor Field were particularly successful in accessing new reserves. Whilst the high year end oil price helped to deliver a strong result, the reserve replacement figures primarily reflect the addition of real barrels resulting from the application of enhanced technologies, increased activity levels and successful investment.
For the first time, reserves from some of the company's new greenfield projects have been included in these Proved Reserves figures. The first bookings were made in 2007 for the Verchknechonskoe Field in East Siberia and 2 fields in the Uvat Region of West Siberia, both of which are under development. These projects, and other new projects in TNK-BP's portfolio, will continue to add significant Proved Reserves in future years.
In addition, more than 400 million barrels of non-proved oil reserves were added through Exploration and Appraisal activity, representing another successful year of resource renewal through exploration drilling.
It remains one of TNK-BP's important long-term objectives to play a role in unlocking Russia's resource potential through the consistent transfer of knowledge and technology to Russia's oil and gas sector.
TNK-BP's Chief Executive Officer, Robert Dudley said: "We have delivered another year's positive contribution to Russia's national reserves inventory. Replacement of annual production with new reserves lies at the heart of our business strategy. We have exceeded this objective every year since we commenced operations. Our average reserves replacement ratio over the past five years has been 141% on an SEC basis - an achievement very few companies of our size in the global industry can match."
He added: "This is an outstanding result - among the very best in the global industry for 2007. It reflects the impact of superior application of technology in our existing fields and the fact that we are steadily moving our major greenfield projects towards production and under-pinning a sustainable business model for growth."
The independent firm of DeGolyer and MacNaughton conducted the audit to criteria stipulated by both the United States' Securities and Exchange Commission (SEC) and the Society of Petroleum Engineers (SPE).