Oil and Gas Development Project Lifecycle (Cairn Energy PLC 2010)

License award- when a governmental body awards exploration acreage for leasing by an exploration and production company typically in return for a free and a performance or work obligation.

Seismic surveys are carried out following the license award to develop a picture of the geological structure below the surface. If results show structures exist that are potential hydrocarbon reservoirs, oil and gas company may then proceed with site surveys.

Site surveys are carried out to gain more information about the area of a potential prospect, including data on the environment around a potential drilling location. If the results support the identification of a prospect and safe and viable drilling location is identified, the company may proceed to exploration drilling.

Exploration drilling- one or more exploration wells are drilled to determine if a prospect exists and to gain further data on the subsurface conditions. If a hydrocarbon reservoir is encountered the well is surveyed to see whether the reservoir is a viable for production, in which case the company proceed to appraisal drilling

Appraisal drilling if promising amounts of oil and gas are confirmed, field appraisal is used to establish the size of the field and the most appropriate production methodology to assess whether the field is commercial.

Development once a prospect has been shown to be technically and commercially viable a development plan is submitted to the authorities for approval. Before the field is developed, materials and services are procured, and equipment is installed. Once development drilling is complete the production starts.

Production once a development is online, production is gradually increased to peak production.

When oil and Gas Company decides that the production facility is no longer economically value, the company will shut the facility down and make it safe.

Patel and Morris have stated that "The life cycle is the only thing that uniquely distinguishes projects from non-projects". According to the same source the sequence of phases through which the project will evolve. It is absolutely fundamental to the management of projects . . . It will significantly affect how the project is structured. The project lifecycle is extremely useful in planning a project since they provide a framework for budgeting, manpower and resource allocation, and for scheduling project milestones and project reviews. Thus our understanding of the life cycle is relevant for our understanding of projects. References Cairn Energy PLC 2010. Corporate Responsibility Report.

Office of ComplianceOffice of Enforcement and Compliance AssuranceU.S. Environmental Protection Agency 2000. Profile of the Oil and Gas Extraction Industry Available online: < www.epa.gov/oeca/sector>. Accesses on 18 October 2011.

Patel, M. B. & Prof. P.G. W. Morris, Guide to the Project Management Body of Knowledge, Centre for Research in the Management of Projects, University of Manchester, UK, 1999, p52.

R. Max Wideman 2004. The Role of the Project Life Cycle (Life Span) in Project Management. AEW Services, Vancouver, BC. Available online < www.maxwideman.com/.../plc-models.pdf>> . Accesses on 18 October 2011.