Definition - What does Unproven Area mean?
Unproven Area, also known as unproven hydrocarbon reservoir is a region with low amount of hydrocarbon presence on which oil and gas research and exploration activities can be carried out. These activities include geological interpretation, analysis of engineering data and seismic studies. However, hydrocarbon estimates, certain uncertainties and technical difficulties preclude such reserves classified as proven oil and gas reserves. Unproven area is also called unlike proven area.
Petropedia explains Unproven Area
A reservoir is a porous, permeable and sedimentary rock in which hydrocarbon fluids or water are accumulated over a long period of time. A reservoir can be broadly classified as:
- Oil Reservoir – In this type of reservoir, majority of the hydrocarbons are crude oil and water with little or no amount of natural gas.
- Gas Reservoir – This type of reservoir contains only natural gas and water.
- Condensate Reservoir – This type of reservoir contains natural gas liquids or gas condensates along with natural gas. As the pressure drops below the dew point, the condensate separates from natural gas.
These hydrocarbon reservoirs can be further divided into either:
- Proven area or proven hydrocarbon reservoir
- Unproven area or unproven hydrocarbon reservoir
The only difference between the two is that E&P organizations prefer to invest in a proven hydrocarbon reservoir because such reservoirs prove to be economically viable for capital investment as it is possible to completely exploit the reservoir over a long period of time with one time investment.
Whereas, in an unproven hydrocarbon reservoir, organizations preclude to invest because:
- Low amount of hydrocarbon presence that would not yield them benefits once the investment is made.
- Technical difficulty because of terrain issues, economical and social issues.
- Unavailability of resources to operate in an area.
- Regulatory issues, etc.