Development of the Petroleum Resource Specifications and Guidelines PRSG – A Petroleum Classification System for the Energy Transition

The Petroleum Working Group (PWG) of the United Nations Economic Commission for Europe (UNECE) has developed the Petroleum Resource Specifications and Guidelines (PRSG) to facilitate the application of the United Nations Framework Classification for Resources (UNFC) for evaluating and classifying petroleum projects. The UNFC was developed by the Expert Group on Resource Management (EGRM) and covers all resource sectors such as minerals, petroleum, renewable energy, nuclear resources, injection projects, anthropogenic resources and groundwater. It has a unique three- dimensional structure to describe environmental, social and economic viability (E-axis), technical feasibility and maturity (F-axis) and degree of confidence in the resource estimates (G-axis). The UNFC is fully aligned to holistic and sustainable resource management called for by the 2030 Agenda for Sustainable Development (2030 Agenda). UNFC can be used by governments for integrated energy planning, companies for developing business models and the investors in decision making. Internationally, all classification systems and their application continue to evolve to incorporate the latest technical understanding and usage and societal, government and regulatory expectations. The PRSG incorporates key elements from current global petroleum classification systems. Furthermore, it provides a forward-thinking approach to including aspects of integrity and ethics. It expands on the unique differentiator of the UNFC to integrate social and environmental issues in the project evaluation. Several case studies have been carried out (in China, Kuwait, Mexico, Russia, and Uganda) using UNFC. Specifically, PRSG assists in identifying critical social and environmental issues to support their resolution and development sustainably. These issues may be unique to the country, location and projects and mapped using a risk matrix. This may support the development of a road map to resolve potential impediments to project sanction. The release of the PRSG comes at a time of global economic volatility on a national and international level due to the ongoing impact and management of COVID-19, petroleum supply and demand uncertainty and competing national and international interests. Sustainable energy is not only required for industries but for all other social development. It is essential for private sector development, productive capacity building and expansion of trade. It has strong linkages to climate action, health, education, water, food security and woman empowerment. Moreover, enduring complex system considerations in balancing the energy trilemma of reliable supply, affordability, equity, and social and environmental responsibility remain. These overarching conditions make it even more essential to ensure projects are evaluated in a competent, ethical and transparent manner. While considering all the risks, it is also critical to reinforce the positive contribution a natural resource utilization project provides to society. Such an inquiry can focus on how the project contributes to the quality of life, environment, and the economy – the people, planet, and prosperity triad. Such an approach allows consistent, robust and sustainable investment decision making and energy policy development.