Parameters that might affect the duration of a project activity are determined and based on these parameters, project activity durations. They provided for the use of both probabilistic and deterministic methods in the. A comparison of deterministic and probabilistic methods to. In this study, a reserve estimation attempt in a silver ore deposit was carried out by the help of geographic information systems gis. A guide to the understanding of ore reserve estimation. Mont tremblantvortrag userpage freie universitat berlin. Pdf computer aided ore body modelling and mine valuation. A project management approach to using simulation for cost. The assumption that spatial observations can be treated as a stochastic process is judged to be an inappropriate model for natural data. If the proved reserves calculated from the deterministic method fit within the defined probability range, the estimate would be. While the geoscientist may well have primary responsibility, the engineer must carry the resource and reserve models forward for planning and economics. Blalst synopsis matheron, geoslalislical method or the estimation of ore reserves has been developed to the point al which. Ore reserve estimation method by using geographic information.
Vm20 brings long awaited principlebased approaches to the world of statutory life reserves, allowing companies to use of their own assumptions and cashflow models when calculating the two modeled reserve components of vm20, the deterministic reserve and stochastic reserve. Estimating resource and reserves crosses the disciplines between geoscientists and petroleum engineers. Computer software for ore body modelling and mine valuation. There has been recognition in the oil and gas and mineral extractive industries for. The f1 factor may be used to check and calibrate the selectivity of mineral resource models andor planned dilution assumed in transfer from mineral resources to ore reserves. Ms word technical paper template corpus ul universite laval. The probabilistic method, on the other hand, is more rigorous and less commonly used. For the ceo its important to understand that a re estimation of the ore reserve with a different price can take some time. Deterministic methods use singlepoint parameters to obtain reserves. The term deterministic implies that the cost contingency is determined as a single point estimate, typically as a percentage of the base cost estimate. Mineral resource and ore reserve estimates thus carry certain. Pdf errors and uncertainty in mineral resource and ore reserve. Stochastic models possess some inherent randomness.
Reserves evaluation, certification, unitization beicipfranlab. The results demonstrate that the technique offers all that the conventional approach offersa wireframe that honors drill hole dataand has the advantage of offering multiple renditions of the ore lens geometry that can be used to study the impact of geologic uncertainty on resource and reserve estimates. Many people rely on empirical, interpretive approaches and. Zahedi, moradzadeh ali, alirezaei farshid, and zamanzadeh seyedmohammad. Parametric estimation technique calculates projected times for an activity based on historical records, from previous projects or other info. Geostatistical estimation methods, such as ordinary kriging and simple. The objective of this work was to determine how to estimate reserves using reservoir simulation with both deterministic and probabilistic approaches such that the resulting reserves estimates from the two approaches are consistent with one another in some way. In ore reserve estimation, the orebody is the region and grade, thickness, etc. Deterministic approaches rely on the use of average values and do not take.
The main advantage to adopting mc techniques for exposure assessment is that they can lead to a more accurate estimate of the range of exposures, especially with respect to demonstrating the conservatism of the maximum point estimate. By the central limit theorem, the result oilfield reserves of sum of independent distribution approaches normal. Sep 20, 2016 a comparison of deterministic and probabilistic methods to improve reserves estimates published on september 20, 2016 september 20, 2016 91 likes 10 comments. It is the principal result to date of an ore reserve study commissioned by cra in late 1977. This approach relied on commercially available ore reserve and mineplanning software to establish the optimised pit.
Guidelines for the evaluation of petroleum reserves and resources. The mining software packages continued to develop in power and. In this paper, the most common project cost estimation methods and approaches were collected and categorized into two main groups of 1 probabilistic and 2 deterministic methods. They may be made by examining engineers as a basis for placing a value on a mining property in connection with reports on behalf of owners or vendors, on the one hand, or for prospective purchasers or lessees, on the other. One way uses singlepoint estimates, or is deterministic in nature. The f1 factor measures the accuracy of orebody knowledge in the ore reserves to the demarcation of ore and waste by ore control short term model. Ore reserve estimation methods, models and reality proceedings of the symposium sponsored by the geology division of clm, and held in montreal, quebec, may 1o11, 1986 edited by m. Petroleum resources classification reserves estimation. In this study, we use two approaches to calculate rf from eq.
The technique allows using time reserves to define and protect duration estimates through offsetting unexpected issues that arise. Probabilistic verses deterministic in production forecasting. A project management approach to using simulation for cost estimation on large, complex software development projects abstract. Ore reserve estimates and changes in commodity price a. Mineral resource and ore reserve estimation knovel. Project management software estimation these are specialized software programs or software tools for doing estimation for project resources and various costs. Mar 30, 2017 project management software estimation these are specialized software programs or software tools for doing estimation for project resources and various costs. Deterministic estimate the method of estimation of reserves. Principlebased reserving or pbr is a new shift expected in the reserving approach of us life insurance business.
A number of methods are discussed that allow the estimator to be more. Determining project contingency reserve using a fuzzy. Conventionally, mining industry relies on a deterministic view, where a unique. Depending on the amount and quality of data available, one or more of the following methods may be used to estimate reserves. For a modern stochastic approach, the input parameters are represented by means of probability density functions pdfs, and the resulting reserve estimate is a. Kriging can also be understood as a form of bayesian inference. Some classical reserve estimation techniques such as triangulation and polygon methods. Political, legal, environmental and social factors also need to be properly assessed before development of an apparently economic deposit proceeds.
Reserve analysis is a fundamental analytical technique that determines an estimated time reserve for a task and establishes scheduled duration for this task. E mineral resource estimates and public policy, american. Stretched exponential decline model as a probabilistic and deterministic tool for production forecasting and reserve estimation in oil and gas shales. Emphasis is placed on ore reserve risk management and its effective integration to mine planning, an element that has been shown to have a significant, positive impact on a companys bottom line. Introduction reserves are those quantities of petroleum which are anticipated to be commercially recovered from known accumulations from a given date forward. N \displaystyle n samples from a function will be normally distributed, where the covariance between any two samples is the covariance function or kernel of the gaussian. There are different estimation methods see below used for different.
Estimating hydrocarbon reserves is a complex process that involves integrating geological and engineering data. Deterministic risk analysis best case, worst case, most likely a quantitative risk analysis can be performed a couple of different ways. The forces that led to the consideration of principlebased approaches to reserving for individual. Square root method is used to adapt the risk contingency in order to consider that all risks wont occur at the same time. Deterministic estimate the method of estimation of reserves or resources is called deterministic if a single best estimate is made based on known geological, engineering, and economic data. Yet, with the several papers written on the subject, a general approach is in the offing. The issue estimating reserves and predicting production in reservoirs has always been a challenge. Deterministic and probabilistic estimation of reserves nrg. Stretched exponential decline model as a probabilistic and. Investigation of consistency between deterministic and.
Deterministic and probabilistic estimation of reserves. As reported in spe 28329, mobil corporation utilizes a unique methodology for reserve and resource evaluation. Some classical reserve estimation techniques such as triangulation and. From a resource perspective, it is more efficient to use mc modeling only when deterministic approaches fail. It is very difficult for project managers to develop accurate cost and schedule estimates for large, complex software development projects. The method of estimation is called probabilistic when the known geological, engineering, and economic data are used to generate a range of estimates and their associated probabilities. Assuming the surface is flat and faultsdiscontinuities terminate the continuity of the deposit in which the drill holes define the boundary of the orebody, determine as accurately as possible the tonnage and grade of the deposit using polygon, triangular and sectional methods of ore reserve estimation. None of the approaches or tools available today can estimate the. Generally, size of the database is too bulky to manage studies with hand effort. The method of estimation is called deterministic if a single best estimate of reserves is made based on known geological, engineering, and economic data.
Some parts of the deterministic calculation of proved reserves are. Sinclair and m vall6e the canadian institute of mining and metallurgy. Therefore another approach than kriging has to be applied to estimate the. It also provides a direct quantitative measure of reliability. Estimation of in place hydrocarbon volume in multilayered reservoirs using deterministic and probabilistic approaches pedram masoudi, a. Verrall presented to the institute of actuaries, 28 january 2002 abstract this paper considers a wide range of stochastic reserving models for use in general insurance, beginning with stochastic models which reproduce the traditional chainladder reserve estimates. Not only deterministic and descriptive manner but also probability and statistics take. If appropriate sensitivity testing is done at the study level and in each revision of the ore reserve, then the ceo and the market can be informed of the valid ranges and when a new ore reserve estimate is required. Reservoir simulation software that incorporates optimization as well as probabilistic forecasting can be used to explore the uncertainty space during the history matching process and can speed up that process but still allows a deterministic forecasting approach to be used if preferred, employing alternative historymatched models. Modern modelling techniques for ore bodies and optimisation methodologies for strategic mine planning. In practice, the deterministic methods are the simplest and most common methods for establishing the cost contingency reserve fund. National association of insurance commissioners naic has introduced the standard valuation model law svl that will enable a change from the standard reserve requirement to the new dynamic methodology of aligning risks on an individual company basis. The approach integrates both deterministic and probabilistic methods to evaluate reserves and establish the full hydrocarbon potential of fieldsprospects.
For the traditional deterministic approach the input parameters e. Csugspe 149471 recovery factor and reserves estimation. Elsevier scientific publishing company, amsterdam, 364 p. Deswik software does not do grade estimations for the. Components of geostatistical estimation, developed as a method for ore deposit assessment, are discussed in detail. A comparison of deterministic and probabilistic methods to improve reserves estimates published on september 20, 2016 september 20, 2016 91 likes 10 comments. All reserve estimates involve some degree of uncertainty. Nov, 2015 the method of estimation is called deterministic if a single best estimate of reserves is made based on known geological, engineering, and economic data. In this case, however, the software determines the combination of. Computer aided ore body modelling and mine valuation intechopen. Software crystal ball example probabilistic reserves. Resource estimation is used to determine and define the ore tonnage and grade of a geological deposit, from the developed block model.
The main advantage to adopting mc techniques for exposure assessment is that they can lead to a more accurate estimate of the range of exposures, especially with respect to demonstrating the conservatism of the maximum point estimate deterministic approach. Modelling approaches utilise topographical information and drill hole database. Estimates of the tonnage and average grade of ore deposits ore reserve estimates are made for various purposes. Use of discounted cash flow analysisas a first tool in the economics of the mining industry in the last 30 years, it has become common to define an ore reserve as that part of a mineral resource whose exploitation can generate maximum net present. A new generic open pit mine planning process with risk assessment. Kriging starts with a prior distribution over functions. Performancebased reserves calculation deterministic. The deterministic method is by far the most common.
Duane mcvay analysts increasingly have used probabilistic approaches to evaluate the uncertainty in reserves estimates based on a decline. Deterministic and probabilistic engineering cost estimating. Improve oilfield production forecasting with predictive. This published data can include articles, books, journals and periodicals from various industries. The main advantage to adopting mc techniques for exposure assessment is that they can lead to a more accurate estimate of the range of exposures, especially with respect to demonstrating the conservatism of the maximum. Ausgemco pty ltd australian groundwater, environmental and. This technique offers the best linear unbiased estimate blue of the reserves in the context of both local and global bases. A deterministic reserve approach may be appropriate for certain products, depending on the nature and level of risk, and stochastic approaches may be necessary for other products principlesbased valuation of life insurance products 7 lrwg guiding principles continued principle 4. There are different estimation methods see below used for different scenarios dependent upon the ore boundaries, geological deposit geometry, grade variability and the amount of time and money available. C for critical remarks on this probabilistic model and get 90% confidence limits for zd. Oxide ore has some fluctuations and it can go to stockpiles for heap leach processing.
Integrated structural stability analysis for preliminary. Reserve estimation an overview sciencedirect topics. This estimation technique is actually a mathematical approach to find the estimation of a project activity. This problem plays an increasing role not only in reserve estimation but also. The process of estimating a mineral resource can only take. Ore reserve estimation method by using geographic information systems.
There are various specialised and expert software to support. However, as in these methods the weighing is based on models performance over a training period, applying them may require a substantial amount of model runs. The procedure is to select a single value for each parameter to input into an appropriate equation, to obtain a single answer. The accuracy of ore reserves estimation case study. An integrated deterministicprobabilistic approach to reserve. In the first, deterministic, approach, we use a single average value and calculate the rf. An extension of this approach, applicable to deterministic models has been proposed raftery et al. Ausgemco pty ltd australian groundwater, environmental. Stochastic claims reserving in general insurance by p. Once the resource block model is available, strategic mine planning is the next.
In the second, probabilistic method, we take the entire range reported for the input parameters and calculate a range for rf. Stochastic modeling in general is discussed, and purposes of the approach emphasized. This technique is used only for estimating activity resources. As production and pressure data from a field become available, decline analysis and material balance calculations, become the predominant methods of calculating. The schedule of optims is shown in figure 2 and it illustrates the schedule type with multistage stabilization of mining rate, which meets the mill production rate of 5. Improve oilfield production forecasting with predictive analytics for the oil and gas industry. Thus, numerical algorithms and mathematical approaches necessitate computer applications to overcome huge computational time and processes. Performancebased volumetric reserves estimation parameters measured from real performance 1. Determination of uncertainty in reserves estimate from analysis of production decline data. Developed reserves developed reserves are expected to be recovered from existing wells including reserves behind pipe. Finally, risk profiles of that production schedule, namely ore and waste.