Definition - What does Contingent Resources mean?
Contingent resources are resources in known accumulations that are estimated to be potentially recoverable, but not yet commercially recoverable due to some contingencies. This term usually refers to petroleum quantities that have been discovered using established technology. Some contingencies affecting contingent resources are legal, regulatory, political, and economic and market access.
Trenchlesspedia explains Contingent Resources
Contingent resources are very important because these resources can quickly grow to volumes greater than those available in reserves. These resources must be quantified for portfolio management so that investors can know the resources available with a company beyond that in their reserves. Since contingent resources are not same everywhere, they are sub-classified into:
Development pending, in which contingencies are being actively pursued, resolution is expected within reasonable time and there is more than 80 percent chance of development.
Development on hold, in which major non-technical contingencies have been identified which are beyond the developers control such as external approvals, political and economic factors, social license and market access and there is more than 50 percent chance of development.
Development needing clarification, in which the project is under active evaluation, contingencies are not clearly defined and considerable further appraisal is required. The chances of development are anywhere from 20-80 percent.
Development not viable, in which project was evaluated and found not viable, contingencies is identified and significant appraisal is required with very low chances of development.