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Application of the UN Framework Classification for Fossil Energy and Mineral Resources to energy accounts. Sigurd Heiberg StatoilHydro Chairperson, UNECE Ad Hoc Group of Experts on Harmonization of Fossil Energy and Mineral Resources Terminology. What is the UNFC?.

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Application of the UN Framework Classification for Fossil Energy and Mineral Resourcesto energy accounts

Sigurd Heiberg

StatoilHydro

Chairperson, UNECE Ad Hoc Group of Experts on Harmonization of Fossil Energy and Mineral Resources Terminology

what is the unfc
What is the UNFC?

United Nations Framework Classification for Fossil Energy and Mineral Resources

  • Simple, universally applicable scheme for classifying and evaluating energy and mineral reserves and resources
  • Allows a common international understanding within and across commodity classes
  • Flexible system for application at global, national, industrial, institutional or financial level
  • Recommended by ECOSOC in 1997 and 2004 and managed within the UN System by the UN Economic Commission for Europe
  • Adopted, adapted or tested in over 60 countries, at this stage principally for application to mineral resources
need for a common global code for energy and mineral resources
Need for a common global code for energy and mineral resources?
  • Globalization of capital and commodities markets is happening!
    • Investment flows between North and South and East and West are growing rapidly in all directions, especially in extractive industries
  • Common understanding will lead to greater efficiencies in
    • International energy studies
    • Government management of resource endowments
    • Management of corporate assets and associated business processes
    • Financial reporting
  • Recognize that established systems likely to remain in place to meet specified needs, but demand growing for a common framework
unece ad hoc group of experts
UNECE Ad Hoc Group of Experts
  • Created in 2004 in UNECE to deliver on ECOSOC Resolution
    • Develop one global common code for energy and minerals, including definitions, specifications and guidelines for application
    • Establish institutional governing structure to keep UNFC relevant and updated
  • Transparent and voluntary process
  • Wide range of stakeholders
    • Governments, NGOs and business/private sector
    • International organizations, incl. IAEA, IEA, IEF, OPEC, WEC and WPC
    • Professional associations incl. AAPG, CRIRSCO, EFG, IASB, IOSCO, IVSC and SPE
    • Experts involved with development of the current SPE/WPC/ AAPG/SPEE classification were also involved in development of UNFC
    • Coordinate with IASB’s Extractive Industries Research Project
ahge bureau is representative of the group
AHGE Bureau is representative of the Group
  • Government (1), NGO (1) and private sector (3)
  • IEA (1)
  • OPEC (1)
  • Russian Federation (1)
  • CRIRSCO (1) and SPE (1)Close links are maintained with the financial community through IASB, IOSCO and ASC
collaboration with financial community
Collaboration with Financial Community
  • Common code is needed by the financial community
  • IASB researching development of an International Financial Reporting Standard (IFRS) for extractive activities
  • A discussion paper inviting comments on accounting and disclosure approaches by the IASB research project team Expected release in 2008
  • Comments will inform IASB before it decides to develop an IFRS for extractive activity Expected release date for IFRS uncertain
  • US SEC has proposed: Modernization of the Oil and Gas Reporting Requirements Comments due by 8 September 2008.
  • Agreement between IASB and FASB (US SEC) to harmonize their rules.
  • UN (via UNECE AHGE) collaborating closely with IASB and IOSCO (of which SEC a member)
  • More has happened in the last months than in the last 30 years!
next steps for 2008 2009
Next Steps for 2008/2009
  • Develop a proposal for a revised UNFC to be submitted to the Extended Bureau of the Committee of Sustainable Energy as soon as possible
  • Propose changes to UNFC through a due and transparent process
  • Prepare a discussion paper on Specifications
  • Develop Specifications and Guidelines for UNFC application and implementation. SPE and CRIRSCO guidelines to be used extensively
  • Follow up on recommendations to consider UNFC for recipient reservoirs for carbon sequestration and natural gas storage
  • Continue mapping UNFC to other systems
  • Continue cooperation with IASB and other organizations in pursuit of a common global framework
business decisions in exploration and production

G3

G3

G3

G2

G2

G2

G1

G1

G1

Sales

E1

E3

E1

Business planning

Prospect identification

Prospect exploration

Non-sales

Concept

Feasibility

Definition

Execution

Operation

E2

E3

E3

F4

F4

F4

Business Decisions in Exploration and Production
un framework classification unfc for petroleum

Classification

Principles

Total in-place

Field project status and feasibility

Economic and commercial viability

Geological knowledge

  • G1 Reasonably assured
  • G2 Estimated
  • G3 Inferred
  • G4 Potential
  • E1 Economic
  • E2 Potentially economic
  • E3 Intrinsically economic
  • F1 Justified
  • F2 Contingent
  • F3 Undefined
UN Framework Classification (UNFC) (for Petroleum)