Two industry organizations, in response to concerns over petroleum reserves writedowns last year, are jointly working toward a plan to sponsor a program to certify reserves evaluators.
AAPG and the Society of Petroleum Evaluation Engineers are working together to consider a business plan and budgeting for the program after evaluating and decide on its feasibility this year.
Regulators, Congress and investors recently have called for reforms in how the oil and gas industry estimates and reports petroleum reserves, the lifeblood and main asset of companies with drilling and production operations.
"The program to train and test petroleum engineers and geologists will be modeled to some degree after the one for certified public accountants," said Dan Tearpock, who is leading the initiative for AAPG.
Last year, public companies filing with the U.S. Securities and Exchange Commission reported reserves quantities valued at $2.5 trillion, a mere 3 percent of worldwide reserves.
"In the U.S. and globally, reserves are not audited by independent accountants and are not estimated by evaluators that have to meet any formal standards," Tearpock said, "The problem is international in scope."
AAPG's Division of Professional Affairs has found a lack of uniform standards in definitions and recommended practices and training for reserves estimating and reporting.
"A joint committee of the AAPG and SPEE received an enthusiastic endorsement from both associations to continue its investigation and focus on five specific areas," Tearpock said.
Those areas are qualifications, recommended practices, reserves definitions, certification and ethics.
Managing members of the joint committee are Tearpock, as AAPG's representative, and Richard Miller and Ron Harrell, both with SPEE. Over the past year, committee managers formed subcommittees to evaluate current industry standards and the need for a formalized certification program. More than 40 volunteers from seven professional societies were involved in the first phase of the study.
"The current intersociety Exploratory Committee on the Certification of Petroleum Reserves Evaluators may be one of the most important initiatives of its kind under way by the AAPG at this time," said AAPG President Patrick J.F. Gratton.
And Peter R. Rose, AAPG president-elect, stated "It is vital that the investment community and government agencies have reliable reserves estimates. The professional associations sponsoring this initiative must show the investment community and the government 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," Rose said.