|Geology||A Level||£20 /hr|
|Maths with Statistics||A-Level||A|
Phoebe (Student) April 5 2016
A natural resource is any natural material that is either useful or valuable, this can include: natural gas, crude oil, metal ores and water (i.e. ground water).
A reserve is the amount of a resource that can be economically extracted using the existing technology. For a reserve to be economic, the company (BP, Shell ect.) must make more money selling the resource than they do spending money extracting it, in other words they must make a profit.
The amount of reserves can change due to many factors...
In the context of hydrocarbon exploration (crude oil and natural gas), reserves can go up due to:
- Further exploration discovering more reserves
- An improvement or advance in exploration technology, leading to more of the current reserves becoming economic (for example, deep water reserves or unconventional sources)
- A rise in the price of oil or gas can make (previously uneconomic) small oil or gas fields economic to extract from
Hydrocarbon reserves can go down due to:
- Calculations of reserves being incorrect (companies may overestimate their reserves deliberately to boost share prices!)
- As reserves are extracted from the Earth, the amount of resource left becomes depleted; the less resource there is, the harder it becomes to extract and therefore more money is needed to extract it, making the reserve less economic to recover.see more