Comparison Between Commercial Assessment and Reserves Value Evaluation of Petroleum Project

Reserves value evaluation is an important way to determine the remaining economic reserves and estimate the value of reserves. At present, the reserves value evaluation method often used in the industry is cash flow method. Commercial assessment is an important evaluation means of the company's benefit management. There are connections and great differences between reserves value evaluation and commercial evaluation. Reserves value evaluation is a part of commercial evaluation. Reserves value evaluation is basically the same as the general method of commercial evaluation, but its essence and purpose are quite different. This paper summarizes the key points of reserves value evaluation and commercial evaluation under PRMS standard and SEC rules, compares the differences of the key parameters (price, reserves categories, discount rate etc.), the applicability and use of reserves value and commercial assessment. Taking a project in middle east as an example, this paper analyzes its reserves value and commercial assessment.