By OGJ editors
HOUSTON, May 23 -- The American Association of Petroleum Geologists (AAPG) and the Society of Petroleum Evaluation Engineers (SPEE) will decide this year whether to sponsor a "reserves evaluation" certification program to standardize the way the oil and gas industry estimates and reports petroleum reserves.
The initiative is in response to concerns over recent petroleum reserves writedowns that prompted investors, the US Congress, and other regulators to call for reserves reporting reform (OGJ Online, Dec. 1, 2004).
"In the US and globally, reserves are not audited by independent accountants and are not estimated by evaluators that have to meet any formal standards," said Dan Tearpock, who is leading the initiative for AAPG. "The problem is international in scope."
Last year, public companies filing with the US Securities and Exchange Commission reported reserves quantities valued at $2.5 trillion, about 3% of worldwide reserves.
The AAPG Division of Professional Affairs found a lack of uniform standards in definitions and recommended practices and training for reserves estimating and reporting.
Peter R. Rose, AAPG president-elect, said, "The professional associations sponsoring this initiative must show the investment community and governments that we have the expertise, ethics, and responsibility necessary to provide reliable reserves estimates. This initiative may be a pivotal program to ensure consistent, reliable reserves estimates in the future."
AAPG and SPEE have approved continuation of the joint committee's investigation. The committee will focus on qualifications, recommended practices, reserves definitions, certification, and ethics.
"The program to train and test petroleum engineers and geologists will be modeled to some degree after the one for certified public accountants," said Tearpock.
If the organizations find the proposal feasible, they plan to develop a business plan and budget for the program this year.