What does the term reserves mean in relationship to fossil fuel?

Answer 1

You have asked a very good, simple question. My answer might seem a bit long.

An oil company never knows all of the oil that might be in an oil field with complete certainty. They are constantly re-evaluating the quantity of oil that might be produced from their fields. The biggest evaluation problems are with recent discoveries, which have only one well.

So, reserves are the hydrocarbons that are considered to be commercially producible with a high degree of certainty. There must be good evidence to support a claim that the field can be commercial. In simple terms, this means there's enough oil to make a profit. In some fields, there is a lot of oil but it flows too slowly to be profitable. Other times, the cost of development is much higher than the expect profit from the oil.

Generally, there must be approved plans to develop the well and a committment from all involved (Government, other partners) to develop. There must be good justification for the estimated recoverable oil and production rates.

Suppose, there is a field which does not meet these criteria? Then, these may be considered "resources" instead of "reserves." Many oil companies and countries have extensive fields, which can be developed in the near future, because they need further delineation drilling, economics do not support development or access is a problem. These fields can not be called reserves.

Answer 2

Reserves refer to the estimated amount of a fossil fuel resource that can be technically and economically recovered under current conditions. This represents the portion of the resource that is known to exist and can be extracted with existing technology.