What do 3P Oil Reserves mean?

3P Oil Reserves
3P Oil ReservesWhat is the 3P Oil Reserves?

In the intricate realm of oil exploration and extraction, grasping the notion of 3P oil reserves is paramount for both investors and industry insiders. But what precisely do 3P oil reserves entail, and what significance do they carry?

Let's embark on a journey to unravel the essence of 3P reserves, comprehending their importance and unravelling their intricacies.

Defining 3P Oil Reserves

At its essence, 3P oil reserves encapsulate the entirety of estimated reserves within an oil company's holdings. The term "3P" delineates three distinct categories: proven, probable, and possible reserves.

While proven reserves are akin to a guaranteed catch, probable reserves are like the fish almost caught on the hook, and possible reserves are like the mysterious creatures hiding somewhere deep down.

The calculation of 3P reserves combines all proven and unproven reserves, presenting a comprehensive overview of a company's potential oil assets. Unlike 2P reserves, which solely consider proven and probable reserves, 3P reserves encompass the full spectrum, leaving no potential oil uncounted.

3P Oil Reserves
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Navigating the Probabilities

Each reserve category is accompanied by its own distinct set of probabilities. For example,  Proven reserves boast a staggering 90% certainty of extraction, probable reserves boast a 50% certainty, and possible reserves boast a mere 10% certainty.

This meticulous categorisation acts as a guiding light for investors, furnishing insights into the viability and dependability of forthcoming oil extraction endeavours.

Nonetheless, it's essential to acknowledge that while proven reserves provide a solid foundation, incorporating probable and possible reserves offers a more detailed, hopeful view of how much oil a company might have.

The Contribution of Independent Consultants

In the intricate process of assessing a company's oil reserves, independent consultants emerge as trustworthy and precise navigators.

Firms such as DeGolyer, MacNaughton, Miller, and Lents undertake the challenging task of checking oil companies' reserves. Their role is pivotal in providing investors with essential assurance and transparent data.

These specialists meticulously examine a company's oil reserves, verifying the accuracy of their claims and the feasibility of oil extraction. For investors, these assessments serve to distinguish between mere rhetoric and concrete realities.

3P Oil Reserves
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Navigating the Fluctuations

One of the inherent complexities of 3P reserves lies in their dynamic nature. Unlike fixed figures, 3P reserves undergo rapid shifts in classification, often influenced by technological advancements and exploration efforts.

A surge in probable reserves, driven by breakthroughs in technology, can swiftly boost a company's proven reserves, thereby instantly reshaping the investment landscape.

Understanding these fluctuations is crucial for investors as they traverse the unpredictable terrain of the oil market. While proven reserves offer a sense of stability, it's the combination of probable and possible reserves that truly indicate a company's long-term trajectory.


In conclusion, 3P oil reserves offer a comprehensive view of a company's potential oil assets, blending certainty with possibility. As investors navigate the complex landscape of the oil industry, understanding the intricacies of proven, probable, and possible reserves becomes crucial.

While proven reserves provide a solid foundation, the combination of probable and possible reserves significantly shapes a company's future trajectory.

With the guidance of independent consultants and careful observation of technological advancements, investors can confidently navigate the fluctuations of the oil market, knowing they possess a comprehensive understanding of a company's oil potential.

3P Oil Reserves
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