The many reasons for the decline
On 31 December 2015, Eni’s proved undeveloped reserves amounted to 2.867 billion barrels, of which 1,411 million barrels of liquids mainly located in Africa and Kazakhstan and 226 billion cubic metres of natural gas, mainly in Africa and America. Consolidated companies possess proved undeveloped reserves of 1,272 million barrels of liquids and 153 billion cubic metres of natural gas. In 2015 such reserves declined by 302 million barrels:
- due to the conversion to proved developed reserves (-550 million barrels)
- sales in Nigeria (-5 million barrels)
- for revisions of previous estimates, in particular in Venezuela, Iraq and Egypt (+204 million boe)
- new discoveries and extensions, in particular in Indonesia, Egypt and Ghana (48 million boe)
- improvements in recovery, especially in Egypt (+1 million barrels).
During the same year, Eni converted from proved undeveloped to proved developed reserves 550 million barrels following development activities, production start-ups and a project review. The main transfers to proved developed reserves concerned the fields of Perla (Venezuela), Goliat and Midgard (Norway), Litchendjili (Congo) and M’Pungi (Angola) and development expenditure incurred during the year amounted to around €2.4 billion. Most proved undeveloped reserves are generally reclassified as proved developed reserves over a period of not more than five years. The proved undeveloped reserves related to certain projects may remain as such for five years or more, and for various reasons, including difficult operating conditions in remote areas, limitations in the availability of infrastructure and plant capacity, the existence of contractual constraints or other factors that may affect start-up and production levels. Eni estimates that approximately 0.8 billion barrels of proved undeveloped reserves booked as such for five years or more, are mainly concentrated in:
- Kazakhstan, at the Kashagan field (0.5 billion barrels) where reserves will be gradually reclassified to proved developed reserves when the connection of production wells is completed along with the consequent expansion of production capacity, as sanctioned for Phase 1 of the overall development programme for the field
- some gas fields in Libya (0.2 billion boe) where development of reserves and production ramp-up are programmed on the basis of the fulfilment of delivery obligations pursuant to long-term gas supply contracts
- other minor projects where development activities are underway.