ReservetoProduction

Reservetoproduction, commonly referred to as the reserve-to-production ratio (R/P), is a metric used to estimate how long proven reserves would supply production at current rates. It is calculated by dividing proven reserves by the annual production. Reserves are typically categorized by certainty of recovery (proved, probable, possible) and defined by accounting standards or industry practice; the choice of category significantly affects the resulting R/P value.

Interpreting R/P requires caution. It assumes constant production and no new reserves are discovered or developed, and it does not account for price changes, technological advances, or policy shifts that can alter both reserves and production. While it is most commonly applied to oil and natural gas, the metric can also be used for minerals and other extractive resources. Analysts may compute R/P for a company, a region, or a country, and may apply it to whole resources or to specific products.

Limitations include sensitivity to price and technology, which influence what is classified as economically recoverable reserves; varying reserve definitions across jurisdictions; and the fact that R/P does not reflect investment needs, production ramp-ups, or potential declines in supply. It is a snapshot rather than a forecast.

Related metrics include reserve replacement ratio (RRR), which measures additions to reserves relative to production, and reserve life index (RLI). Together, these metrics aid in assessing resource sustainability and near- to mid-term energy or material security.