3P Oil Reserves

3P Oil Reserves

What are 3P oil reserves

3P oil reserves are the total amount of reserves a company believes it has access to, calculated as the sum of all proven and unproven reserves. The petroleum industry divides unproven reserves into two segments: those based on geological and technical estimates from established sources (likely) and those that are less likely to be extracted due to financial or technical difficulties (possible). Therefore, 3P refers to proven, probable and possible reservations.


The 3P estimate is an optimistic estimate of what could be pumped from a well by an oil company. The three different categories of reserves also have different production probabilities assigned. For example, the petroleum industry gives proven reserves 90% certainty of being produced (P90). They give probable reserves a certainty of 50% (P50) and possible reserves a certainty of 10% (P10) of being effectively produced.

Another way of thinking about the concept of the different categories of reserves is to use a fishing analogy where proven reserves (1P) are equivalent to having caught and landed a fish. It is certain and in hand. Probable reserves (2P) are equivalent to having a fish online. The fish is technically caught, but is not yet on the ground and can still get out of the line and escape. The possible reserves (3P) are a bit like saying “there is fish somewhere in this river”. These reserves exist, but it is far from certain that an oil company discovers them, develops them and produces them.

Energy companies update their investors on the amount of oil and natural gas reserves to which they have access through an annual reserve update. This update usually includes proven, probable and possible reserves, and is similar to an inventory report that a retailer can provide to investors.

Resource assessment by an independent consultant

Several consulting companies provide oil companies with independent assessments of their oil reserves. These audits are also advantageous for investors who wish to have the assurance that a company has the reserves they claim. One of these companies is DeGolyer and MacNaughton, the other is Miller Lents, which claims to have served the oil and gas industry with reliable upstream information and a tank assessment since 1948.

Investors in oil and gas companies, as well as in independent oil projects, rely on consulting companies like these to provide accurate and independent assessments of a company’s entire reserve base, including 3P reserves. Critical information includes items such as estimates of reserves and resources to be recovered from discoveries and verification of hydrocarbon and mineral reserves and resources.

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