Circular No. 13/2024/TT-BCT on classification and preparation of reports on oil and gas resources and reserves

CIRCULAR

Regulations on分级和编制石油资源储量报告

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 Pursuant to the Oil Law dated November 14, 2022;

Pursuant to Clause 7, Article 47 of Decree No. 45/2023/NĐ-CP dated July 1, 2023 of the Government detailing certain provisions of the Oil Law;

Based on Decree No. 96/2022/NĐ-CP dated November 29, 2022 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade; Decree No. 105/2024/NĐ-CP dated August 1, 2024 of the Government amending and supplementing some articles of Decree No. 96/2022/NĐ-CP dated November 29, 2022 of the Government on the functions, tasks, powers, and organizational structure of the Ministry of Industry and Trade and Decree No. 26/2018/NĐ-CP dated February 28, 2018 of the Government on the Charter of Organization and Operation of Vietnam Electricity Corporation;

At the proposal of the Director of the Department of Oil and Gas and Coal,

The Minister of Industry and Trade issues this Circular on regulations for grading and compiling reports on petroleum resources and reserves.

PART I

Article 24GENERAL PROVISIONS

Article 1. Scope of Regulation and Applicability

1. This Circular stipulates the grading and compilation of reports on petroleum resources and reserves when conducting oil and gas activities within the mainland, islands, and territorial waters of the Socialist Republic of Vietnam.

2. This Circular applies to agencies, organizations, and individuals, both domestic and foreign, related to the grading and compilation of reports on petroleum resources and reserves.

Article 2. Interpretation of Terms

In this Circular, the following terms shall be understood as follows:

1. Exploited oil and gas (cumulative production) is the total amount of oil and gas extracted from reservoirs, strata, and oil and gas fields updated to the time of report preparation.

2. Economic and technical conditions are economic and technical criteria argued for application at the time of preparing reports on petroleum resources and reserves.

3. Undeveloped resource group (hereinafter referred to as the undeveloped group) is oil and gas resources discovered but not yet economically and technically feasible for development.

4. Developed resource group (hereinafter referred to as the developed group) is oil and gas resources discovered and assessed as economically and technically feasible for development.

5. Petroleum Resources is the total amount of oil and gas in place initially existing in natural accumulations.

6. Undiscovered Petroleum Resources is the amount of oil and gas in place potentially existing in natural accumulations but not yet discovered through drilling.

7. Discovered Petroleum Resources is the amount of oil and gas in place initially existing in natural accumulations that have been discovered through drilling.

8. Product Zone is a collection of reservoirs and strata containing products within a geological formation unit.

9. Play is a group of potential oil and gas-bearing objects within defined geological and geographical limits, sharing similar generation, accumulation, and trapping characteristics.

10. Reservoir, Stratum of Oil and Gas is a geological body containing naturally occurring oil and gas characterized by its permeability, fluid type, reservoir pressure, and separated from other product zones by trapping elements.

11. Formation Testing is a hydrodynamic study conducted to determine comprehensive parameters of reservoir fluids, hydrodynamic parameters, and assess the exploitation potential of part or all of the reservoir, stratum of oil and gas.

12. Potentially Recoverable is the estimated quantity of oil and gas that can be recovered from undiscovered or undeveloped discoveries.

Chapter II

GRADING OF PETROLEUM RESOURCES AND RESERVES

Article 3. Basis for Classification

1. The classification of oil and gas resources and reserves is determined based on the combination of evaluating the reliability of geological, geophysical, and mining technology information; the exploitation capacity of oil and gas fields; the technical feasibility and economic efficiency of the project at the time of preparing the report on oil and gas resources and reserves.

2. The classification of oil and gas resources and reserves shall be carried out in accordance with Articles 4 and 5 and Appendices IA, IB, and IC issued together with this Circular.

Article 4. Classification of Oil and Gas Resources

Oil and gas resources are divided into discovered oil and gas resources and undiscovered oil and gas resources.

1. Discovered oil and gas resources: Depending on the technical feasibility, technological capability, and economic efficiency according to the economic criteria of the contractor at the time of preparing the report on oil and gas resources and reserves, discovered oil and gas resources are classified into developed groups and undeveloped groups, specifically:

a) Developed group: The oil and gas resources of the developed group are classified into verification level (P1), potential level (P2), and possible level (P3);

Level P1 is the calculated quantity of oil and gas at a certain point in time, corresponding to the highest degree of reliability in the classification of oil and gas resources. Level P1 must satisfy the following conditions: the reservoir boundaries of the oil and gas-bearing formation are defined with high reliability based on geological, geophysical data, drilling, testing, and production; the permeability, storage capacity, and hydrocarbon saturation of the reservoir and oil and gas-bearing formation are confirmed by well logging and (or) core samples; the results of formation testing and fluid samples allow determining the ability to produce commercial oil and gas flows according to the economic criteria of the contractor from at least one well;

Level P2 is the calculated quantity of oil and gas at a certain point in time, corresponding to a lower degree of reliability than level P1 in the classification of oil and gas resources. Level P2 is determined as potentially existing in reservoirs based on geological and geophysical data but not verified by formation testing and fluid samples;

Level P3 is the calculated quantity of oil and gas at a certain point in time, corresponding to a lower degree of reliability than level P2 in the classification of oil and gas resources. Level P3 is determined when the quantity of oil and gas may exist in reservoirs based on geological and geophysical data but lacks sufficient reliability to be classified as level P2;

b) Undeveloped group: The oil and gas resources of the undeveloped group are classified into verification level (C1), potential level (C2), and possible level (C3). The technical criteria for classifying C1, C2, and C3 are similar to P1, P2, and P3.

2. Undiscovered oil and gas resources are classified into estimated undiscovered oil and gas resource level (R1) and theoretical undiscovered oil and gas resource level (R2).

a) Level R1 is the estimated quantity of oil and gas at a certain point in time for prospects, reservoirs, and formations that have been mapped but the existence of oil and gas has not yet been confirmed by drilling results;

b) Level R2 is the estimated quantity of oil and gas at a certain point in time for accumulations of oil and gas theoretically expected to exist in a set of prospects with favorable geological conditions for oil and gas accumulation but not yet mapped.

Article 5. Classification of oil and gas reserves and recovery potential

1. Classification of oil and gas reserves

Oil and gas reserves are classified into verification level (P1), probable level (P2), and possible level (P3).

a) Level P1 is the quantity of oil and gas that can be recovered economically, calculated at a specific point in time with high reliability and expected to be put into operation under economic and technical conditions at the calculation point.

b) Level P2 is the quantity of oil and gas that can be recovered where the 2P (P1 + P2) reserve level provides economic viability, calculated at a specific point in time with moderate reliability, and expected to be put into operation under economic and technical conditions at the calculation point.

c) Level P3 is the quantity of oil and gas that can be recovered where the 3P (P1 + P2 + P3) reserve level provides economic viability, calculated at a specific point in time with low reliability, and expected to be put into operation under economic and technical conditions at the calculation point.

2. Classification of recovery potential

The potential recoverable quantity of oil and gas is classified into levels C1, C2, C3 for undeveloped groups and levels R1, R2 for undiscovered groups. Recovery potential levels C1, C2, C3 are calculated and evaluated with high, medium, and low degrees of reliability similar to reserve levels P1, P2, P3. Levels R1, R2 are calculated, forecasted, and evaluated based on corresponding resource levels R1, R2, with the recovery factor taken according to a similar principle based on the value of reservoirs, fields, areas, and adjacent basins.

Article 6. Boundaries of classification of oil and gas resources and reserves

1. The boundaries of classification of oil and gas resources and reserves are determined for each reservoir and oil-bearing formation according to the principle of extrapolation suitable for specific geological conditions as stipulated in Appendix II issued together with this Circular.

2. The determination of classification boundaries and distribution of reservoirs and oil-bearing formations is based on specific documentation and grounds. In cases where similar methods are applied, the contractor must have data with origins and explanations for the applicability of such data to the reservoir or oil-bearing formation being calculated to affirm the appropriateness of the method selection and calculation parameters.

Article 7. Methods for evaluating oil and gas resources and reserves

1. The objects of evaluation of oil and gas resources and reserves are reservoirs and oil-bearing formations.

2. Oil and gas resources and reserves are determined using volume methods (typically, geological 3D modeling), analogous density, material balance, geological synthesis, and hydrodynamic behavior of the field (production simulation and production performance analysis), and other methods depending on available documentation. Among these:

a) Methods applied include: Standard volume method for all cases; geological 3D modeling for developed and developing fields; material balance and production performance analysis for operating fields;

b) Other methods depending on specific conditions but must be accompanied by reasoning when applied.

3. Calculation results from various methods must be analyzed and compared.

4. For cases updating oil and gas resources and reserves, calculation results must be compared with previous results and reasons for changes analyzed.

5. Oil and gas resources and their components must be calculated separately for each product type for each reservoir, formation, rock type, and assessed for the feasibility of bringing the calculated objects into production.

6. Calculation parameters for oil and gas resources and reserves must follow a unified system of units. Resource and reserve quantities must be presented in International Units of Measurement (volume) as prescribed by the Law on Metrology and referencing international petroleum industry practices.

Article 8. Calculation of Oil and Gas Resources and Reserves

Based on the classification specified in Articles 4 and 5 of this Circular, oil and gas resources and reserves shall be calculated as follows:

1. For discovered oil and gas resources

a) Development Group

Oil and gas resources and reserves shall be calculated for levels 1P (P1), 2P (P1 + P2), and 3P (P1 + P2 + P3);

The 1P, 2P, and 3P levels of oil and gas resources serve as the basis for calculating the 1P, 2P, and 3P levels of oil and gas reserves;

Oil and gas reserves may be calculated using either the deterministic method or the probabilistic method according to the following criteria:

- With the deterministic method: Level 1P has boundaries, fluid properties, and reservoir characteristics that are specifically proven by geological, geophysical, and mining technology data, leading to a real extractable quantity of oil and gas greater than or equal to the calculated value of P1. Under this method, oil and gas reserves are analyzed, evaluated, and calculated based on the initial oil and gas volumes at the corresponding level with appropriate recovery factors for the reservoirs, layers, and oil fields, meeting technical, technological, and economic requirements of the project at the time of resource and reserve report preparation;

- With the probabilistic method: Level 1P has a probability of not less than 90% regarding the real extractable quantity of oil and gas being greater than or equal to the calculated value of 1P. Level 2P has an average reliability, with a probabilistic method probability of not less than 50% regarding the real extractable quantity of oil and gas being greater than or equal to the calculated value of 2P. Level 3P has low reliability, with a probabilistic method probability of not less than 10% regarding the real extractable quantity of oil and gas being greater than or equal to the calculated value of 3P;

b) Undeveloped Group

Oil and gas resources and potential recovery shall be calculated for levels 1C (C1), 2C (C1 + C2), and 3C (C1 + C2 + C3);

The methods and calculations for levels 1C, 2C, and 3C are similar to those for levels 1P, 2P, and 3P;

c) Oil and gas reserves of the field must be updated in the general development plan for the oil and gas field (ODP) and adjusted ODP; early production plan for the oil and gas field (EDP) and adjusted EDP; development plan for the oil and gas field (FDP) and adjusted FDP; updated resource and reserve report (RAR);

d) Oil and gas reserves of the field must be updated with secondary and tertiary exploitation plans such as infill drilling, exploiting additional reservoirs and layers, and applying enhanced oil recovery (EOR) measures to increase and improve recovery factors;

2. For undiscovered oil and gas resources

They shall be calculated or forecasted for initial oil and gas volumes and potential recovery (R1, R2) at low, medium, and high levels corresponding to statistical probability confidence levels of 90%, 50%, and 10%, respectively, where the recovery factor is taken based on the principle of geological and mining technology characteristics of the reservoirs, layers, and oil fields, areas, and adjacent basins;

3. The calculation methods for oil and gas resources and reserves are detailed in Appendix II issued together with this Circular;

Article 9. Content of the Oil and Gas Resource and Reserve Report

1. The detailed content of the oil and gas resource and reserve report is established according to the model prescribed in Appendix III issued together with this Circular, including two parts:

a) Explanatory part;

b) Appendix part including tables, drawings, and necessary accompanying documents;

2. Approval content includes: approval of initial oil and gas volume at level 2P (including P1 and P2) with a 50% probability and recognition of the 2P level of oil and gas reserves as the basis for developing and updating the field development and exploitation plan, including improvement and enhancement measures for recovery factors;

3. For the undeveloped group and undiscovered oil and gas resources, the Vietnam Oil and Gas Group records, compiles, evaluates, and reports annually to the Ministry of Industry and Trade for resource management and future exploration and appraisal strategy planning;

4. Details of the approval and recognition of oil and gas resources and reserves are stipulated in Appendix IB issued together with this Circular;

5. Recognition of the updated oil and gas resource and reserve report

In the updated oil and gas resource and reserve report as prescribed in Clause 5 of Article 45 of the Petroleum Law, if the total initial oil and gas volume at level 2P changes by less than 15% compared to the most recent approval, the contractor shall report to the Vietnam Oil and Gas Group for compilation;

Chapter III

IMPLEMENTING PROVISIONS

Article 10. Transitional Provisions

1. For the oil and gas resource and reserve report approved before the effective date of this Circular, the contractor and state management agency continue to implement according to the approved resource and reserve report;

2. The oil and gas resource and reserve report submitted to the competent authority before the effective date of this Circular and complying with the provisions of the Petroleum Law and Decree No. 45/2023/NĐ-CP dated July 1, 2023 of the Government detailing certain provisions of the Petroleum Law need not be resubmitted and will be approved according to the regulations in effect prior to the effective date of this Circular.

Article 11. Effectiveness and Implementation

1. This Circular shall take effect from October 1, 2024, and replace Circular No. 24/2020/TT-BCT dated September 18, 2020, issued by the Minister of Industry and Trade on the delegation of authority and the preparation of reports on oil and gas resources and reserves.

2. In cases where legal normative documents cited in this Circular are amended, supplemented, or replaced, they shall be implemented according to the new documents.

3. In the course of implementing this Circular, if there are difficulties or obstacles, the contractor and the Vietnam Oil and Gas Group shall report to the Ministry of Industry and Trade for consideration and resolution within their jurisdiction./.