© Ross Petroleum
March 2012
United Nations Framework Classification
(UNFC-2009)
Presented by Jim Ross
International Workshop,
EuroGeoSource
Rotterdam
th
8 March 2012
www.rosspetroleum.com
© Ross Petroleum
March 2012
UNFC-2009
Why is it required?
What is the UNFC?
How the UNFC works
Current status and plans
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© Ross Petroleum
March 2012
Why is it required?
Need for common global language for energy
resource estimates
– What are “proved reserves”?
Increasing overlap between mining and oil & gas
industries
– Major issue with respect to “unconventional” resources
– SPE-PRMS is designed for fluids
– CRIRSCO Template is designed for mined solids
Developing need to be able to compare renewable
energy resources with non-renewable resources
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March 2012
Coal mining: an oil & gas producing activity?
Mining or Oil & Gas?
Or both?
Which disclosure and
accounting rules?
4
THE DISTINCTION BETWEEN INDUSTRIES IS NOT CLEAR
© Ross Petroleum
March 2012
Uranium in-situ leaching: a mining activity?
Commercially producing
uranium project
Looks like an oil & gas
operation to me!
Project would have
reserves under PRMS
Mining Rules:
NO RESERVES due to
uncertainty in
recoverable quantities
Schematic of in situ leach uranium mine (Heathgate Resources, 1999)
5
© Ross Petroleum
March 2012
UNFC-2009
Why is it required?
What is the UNFC?
How the UNFC works
Current status and plans
6
© Ross Petroleum
March 2012
UNFC-2009
United Nations Framework Classification for Fossil
Energy and Mineral Reserves and Resources
Generic, principles-based system
‒ Applicable to both solid minerals and fluids
Based on three criteria
‒ Economic and social viability
‒ Field project status and feasibility
‒ Geological knowledge
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March 2012
Primary Objectives
A key goal of UNFC-2009 is to provide a tool to
facilitate global communications
– Uses a numerical coding system
– Language independent reporting
It has been designed to meet, to the extent
possible, the needs of applications pertaining to:
– Energy and mineral studies
– Government resources management functions
– Corporate business processes
– Financial reporting standards
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© Ross Petroleum
March 2012
UNFC-2009
Why is it required?
What is the UNFC?
How the UNFC works
Current status and plans
9
© Ross Petroleum
March 2012
UNFC-2009
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© Ross Petroleum
March 2012
UNFC-2009 – How it works
The category definitions are the building
blocks of the system
These are combined (E, F, G) in the form of
classes
Class 111 means that the reported
quantities have satisfied the definitions for:
– E1, F1 and G1
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© Ross Petroleum
March 2012
UNFC-2009 – Categories
E axis
categories
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© Ross Petroleum
March 2012
UNFC-2009 – E axis
Degree of favourability of social and
economic conditions in establishing the
commercial viability of the project
Includes consideration of market prices and
relevant legal, regulatory, environmental
and contractual conditions
E1, E2 and E3 categories
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March 2012
E axis category definitions
Category Definition
E1 Extraction and sale has been confirmed to be economically
viable.
E2 Extraction and sale is expected to become economically viable
in the foreseeable future.
E3 Extraction and sale is not expected to become economically
viable in the foreseeable future or evaluation is at too early a
stage to determine economic viability.
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March 2012
UNFC-2009 – How it works
Category Definition
E1 Extraction and sale has
been confirmed to be
economically viable.
Category Definition
F1 Feasibility of extraction
by a defined
development project or
mining operation has
been confirmed.
Category Definition
G1 Quantities associated
UNFC Class: 111 with a known deposit
that can be estimated
with a high level of
15 confidence.
© Ross Petroleum
March 2012
UNFC-2009
Sales Production
Extracted
Non-sales Production
Total commodity initially in place
Categories
Class
E F G
Future recovery by commercial
Commercial
development projects or mining 1 1 1, 2, 3
Projects
operations
Potentially Commercial
Potential future recovery by 2 2 1, 2, 3
Projects
contingent development projects
or mining operations Non-Commercial
3 2 1, 2, 3
Projects
Additional quantities in place associated with known deposits 3 4 1, 2, 3
Potential future recovery by Exploration
3 3 4
successful exploration activities Projects
Additional quantities in place associated with potential deposits 3 4 4
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Each class is uniquely defined by its code
© Ross Petroleum
March 2012
The Relationship
UNFC-2009 PRMS CRIRSCO
Sales Production
Production Extracted
Non-sales Production
Total commodity initially in place
Class Class Class
Commercial
Projects Reserves Mineral Reserves
Potentially Commercial
Projects Mineral Resources
Contingent Resources
Non-Commercial
Not reported
Projects
Additional quantities in place Unrecoverable Not reported
Exploration Exploration
Prospective Resources
Projects Results
Additional quantities in place Unrecoverable Not reported
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© Ross Petroleum
March 2012
UNFC-2009
Why is it required?
What is the UNFC?
How the UNFC works
Current status and plans
18
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March 2012
What are Specifications?
Classification
Definitions Framework
Application
Specifications Rules
Non-
Guidelines Mandatory
Guidance
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March 2012
Summary of Development Process
UNFC-2009 simplification with generic definitions only
Survey of stakeholder requirements for specifications
Development of specifications In progress
– Generic specifications
– Commodity-specific specifications (petroleum, solid minerals)
– Renewable energy resources
Public comment period
When draft
completed
Mapping to other systems
– UNFC-1997
– IAEA classification On-going
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– Russian Federation
© Ross Petroleum
March 2012
Conclusions
Quantities can be estimated using current well-
established commodity-specific systems appropriate for
the extraction methodology
Reporting under these systems can continue unchanged
But the same quantities can also be reported under
UNFC-2009 using the numerical codes
The high-level reporting is then independent of:
– commodity type
– extraction methodology
– ambiguous terminology (e.g. “reserves”)
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© Ross Petroleum
March 2012
To find out more …
Visit the UNECE website at:
http://www.unece.org/energy/se/reserves.html
Workshops
– Bangkok, Thailand, 9-10 February 2012
– India, Mexico, Russia planned for 2012
Next Expert Group session: Geneva, 2-4 May 2012
Contact: Charlotte Griffiths:
[email protected] [email protected]22
© Ross Petroleum
March 2012
United Nations Framework Classification
(UNFC-2009)
Presented by Jim Ross
International Workshop,
EuroGeoSource
Rotterdam
th
8 March 2012
www.rosspetroleum.com
