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SPE 93554 Using Integrated Project Models To Evaluate Field Development Options
SPE 93554 Using Integrated Project Models To Evaluate Field Development Options
Abstract
This paper presents a practical and effective development
concept evaluation and screening methodology that recognizes
the fundamental relationship between reservoir potential and
field development strategy.
A spreadsheet-based project modelling environment that
integrates reservoir models and a field development planning
model is described. The reservoir models account for
uncertainty in reservoir performance. The field development
planning model handles the scheduling and costing of wells
and processing facilities. The use of uncertainty-based
projections of reservoir performance to drive well and facility
construction plans is illustrated.
The relative merits of adopting a multi-phase approach to
the construction of facilities (to enable the opportunity to learn
about a reservoir as a project matures), as opposed to a singlephase, up-front construction of facilities (to capture economies
of scale), is discussed.
Lastly, the relative impact of uncertainty in the unit cost of
wells and facilities, due to fluctuations in market demand for
oilfield services, is examined.
To illustrate the benefits of this project modelling
methodology, an example of its use is presented. The example
consists of a large Middle East field in which further
development is being considered, to increase production.
Introduction
Decisions to invest in the development of oil fields are always
taken under conditions of uncertainty. The performance that
may be expected of reservoirs is uncertain, as is the economic
climate in which investment decisions are made and the
resulting projects operated. Technical and commercial
analyses used to evaluate the benefits of oilfield developments
and thereby support accompanying investment decisionmaking processes must account for these uncertainties.
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SPE 93554
0.6
No. 1
No. 2
No. 3
0.5
0.4
0.3
0.2
0.1
0.0
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
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SPE 93554
STOIIP
Recovery Factor
Watercut Dev.
Liquid Rate
STOIIP
Watercut Dev.
Liquid Rate
Recovery Factor
Aquifer Influx
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SPE 93554
Wells
150
100
50
0
-50
2010
2015
New
2020
Abandon
Stock
2025
Active
800
90%
700
80%
60%
500
50%
400
40%
300
30%
200
20%
100
10%
0%
2010
2014
2018
2022
2026
Compression, MMscfd
800
Water Cut, %
70%
600
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
700
600
500
400
300
200
100
0
2010
2015
Capacity
2020
Demand
2025
Water Cut
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Water Cut, %
200
SPE 93554
US$ Million
700
600
500
400
300
200
100
0
Wells
Gathering
Process
Facilities
Gas
Compression
Water
Injection
400
Infrastructure
3,000
350
2,500
300
2,000
200
1,500
US$ Million
US$ Million
250
150
1,000
100
500
50
2010
2015
2020
2025
Cumulative Capex
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SPE 93554
Wells
Gathering
Process
Chemicals
Oil Export
Gas Handling
ESPs
Water Injection
Field Overhead
Corporate Overhead
Total $MM
Personnel
53
3
138
Contracts &
Materials
106
170
10
28
2
203
37
200
293
763
35
213
146
875
200
180
160
140
120
6.00
100
80
60
40
20
0
3.00
1,800
4.00
2.00
1.00
MM Bbls
1,700
5.00
Active Wells
1,900
High
1,600
Base
1,500
1,400
Low
1,300
1,200
1,100
0.00
2010
2015
Active Wells
2020
Unit Opex
2025
1,000
0.50
0.60
0.70
0.80
0.90
1.00
1.10
1.20
1.30
1.40
1.50
Relative Value
Water-Oil Ratio
Figure 10: Unit Opex versus Water-oil Ratio and Active Wells
Uncertainty Analysis
The Planning Model uses the metric of Net Present Value
(NPV) to assess the relative performance of different reservoir
characterizations and field development plans. However, the
revenue used in the analysis is based on an appropriate
marginal cost of supply rather than world oil prices. Analysis
of field development decisions in large Middle East fields at
world oil prices would not reveal the impact of decisions at an
informative scale, as value-adding decisions would be
obscured by the magnitude of revenue.
The marginal cost of supply should be in line with the unit
cost of substantially increasing production from other
properties in the owner's portfolio. Of course this varies
somewhat across the Middle East but a marginal cost of
supply of less than US$5 per barrel would not be considered
unusual.
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SPE 93554
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