The real asset of the oil sector: reserves

Oil reserves are certified as proven, probable and possible. Each level grants a percentage of its existence in an exploratory block.

The most important asset of oil-producing countries is their equivalent reserves. But what do equivalent reserves mean? Well, they are the result of the sum of oil reserves (heavy or light) and natural gas reserves. These are made equivalent in barrels of crude oil. The result of gas to crude oil equivalent, derives from the amount of cubic feet needed that have the calorific value equal to that of a barrel of conventional crude oil. The literature on this subject describes reserves in equivalent barrels.

Petroleum classification - Reserves

Crude oil is classified as heavy and light. Heavy crude oil is located in deep reservoirs or rock traps; therefore, it requires more infrastructure to extract, transport and produce it. Right after processing, the result obtained is approximately 30% of a barrel of lighter crude.

Light crude oil, on the other hand, requires fewer industrial processes and yields more for the extraction of some derivatives. However, this type of crude is already scarce. So the costs to explore, drill, extract, transport and produce are not very viable. Unless they have a price per barrel of crude that allows the fields granted to the oil companies to be commercially exploitable.

When exploration blocks are awarded by a state to companies in the sector and they find oil reserves, they add them to their assets with a classification that determines the amount of barrels that are underground and that can be sold on the market.