LECTURE-16

E Mailed on 11.04.2020

13 . 04. 2020
APE-2

OIL & GAS Field Development

Part-3

ELEMENTS OF PLANNING
AND IMPLEMENTATION
Dr. S.K.NANDA
 Classical Concept on Development of Oil and Gas
Fields
ESSENTIALITY
 A process for optimal exploitation of the
hydrocarbon resources after the expiry of
Exploration phase.
 It provide an opportunity for growth and value in
the upstream (E&P) through a focus on operating
efficiency and capital Gain.
 It is strongly Knowledge base activity.
It is an effort :
To understand the subsurface and surface
behavior of the fluids existing in the reservoir.
To optimize the production of available hydrocarbon. I
It is a process which is function of Exploration and
Exploitation activities..
It encompasses the Discovery to abandonment in
terms of Hydrocarbon economic yield.
It is a dynamic process.
ACTUALITY
It is an essential requirement of post
commercialization stage
It comprises of vivid analysis of following :
Interpretation of fluid contacts (GOC) and oil water
contacts (OWC)
Testing the hydrocarbon bearing reservoirs.
Interpretation of reservoir pressure data including
build up pressure, SBHP and FBHP,
temperature and pressure gradients, field
permeability, and productivity index etc.
 TECHNICALLY.
The Stages of Oil & Gas Field Developments are:

TECHNILOGICAL SCHEME
Within 3 to 4 Years of discovery

INITIAL DEVELOPMENT PLAN

During/at 5 to 7 Years of discovery

FINAL DEVELOPMENT PLAN

After 10 to 15 Years of Production
 1 TECHNILOGICAL SCHEME
Within 3 to 4 Years of discovery
Essential Steps:
1 Scheme prepared for release of funds to the economic
viability of the reservoir.
2 Various economic indices are worked out and so as to
evaluate existing / anticipated situations .

3 Detailed techno economics is carried out.

4 Most feasible variant is implemented in the field

Elements of technological scheme
At this stage:

* Field is Delineated
Meager data available from few wells and nor
*
reliable
* Locations are drilled at various well spacing to
characterize the reservoir
* Geological Model is prepared
* Reserves are re - estimated
* Drive Mechanisms are indicated
ACHIEVEMENTS
Performance prediction :
Calculations are carried out for a period of 15-20 years
period on the basis of envisaged drive mechanism. These
prediction must specify the vital parameters like-
* Oil/Gas Flow Rates *GOR *Pressure.

Economic viability:
This requires estimation of various economic parameters
like-
*Capital Investment *Operating Cost
*Pay out time *Profit *Net Pay value
*Internal Rate of return
 2 INITIAL DEVELOPMENT PLAN
During/at 5 to 7 Years of discovery
At this stage:
* Availability of wells
Good number of wells have been drilled and it is
programmed to drill new wells exist on the basis of
development board.
* Availability of Technical Data:
> Surface Data like – Capillary pressure, Relative
permeability, Saturations, Logging etc.
> Sub surface Data - PVT, Production Pressure , etc
Reliability of data available at this stage is greater than exploratory stage.
 FINAL DEVELOPMENT PLAN 2
After 10 to 15 Years of Production
The decision on the preparation of FDP is taken when about
60% or recoverable reserve have been produced.

Prepared generally after 15 or more years of production.

By this time, all relevant data is obtained and data is

available from reservoir parameter calculations.

It provide an opportunity to introduce new technologies for

improving recovery factor.
 Activities related to Final Development Plan

* Critically look/ analyze the generalized data and re-evaluate

the reservoir as fresh.

* Review well wise performance.

* Revalidate the Geological model

Estimate the reserve , decline curve analysis may be of great
* help.

* Match the actual performance with prediction.

Components of Final Development Plan

 Include Work over Jobs and Infill Wells

(Should be indicated with technical expectations )
 Indicate material requirements.
 Incorporate various advance studies of reservoir -
saturation profile
 Provide techno – economics of the project.
 OGFD APPROACH 3

It is a function of environment existing at any specified time and expected to

be in future.
It is different from any other industry in terms of
* Knowledge Base Integration
Geophysics , Geological, Reservoir Engineering
Production Engineering Applied Engineering
* Increase quantum of Uncertainty
Discovery Uncertainty, Uncertain Crude and Natural gas prices ,
Production Hold ups or Technical Restrictions .
* Market Driven Economic Challenges
Increasing Cost-Finding, Production & WOJ Continuing Inflation ,
Government Control
4
Strategy of the Development
Location of the field:
The field can be an onshore or offshore,
the types of the rig and drilling equipment
will depend on the location.
Size of the field:
The field may be a giant, medium, small
field*. The cost of development and the
mode of development will depend on the
size of the field.
S2 of the Field
 Size of the field:
 Supergiant original 2P reserves > 5,000 MMBOE;
Giant > 1,500 MMBOE;
 Large > 250 MMBOE; medium > 80 MMBOE.

 Status:
 Declining if production is less than 85% of the
max; plateau if production reached its peak but
hasn’t declined more than 85% of the max.
 Fluid properties:
The field may be a oil/gas field, oil field may contain
light crude or heavy crude. The gas field may be dry
gas or gas condensate field, the presence of the
corrosive gas may change the development strategy, it
is necessary to know the composition of the produced
gas.
Drive Mechanism:
The recovery of oil depends on the
drive mechanism, Dissolved gas drive, Gas cap
drive and Water drive.
 Pay zone:
The well completion policy will depend on the
overlapping of the oil/gas bearing area. The lithology
of the producing area is also important.
Logistics:
The oil/gas fields sometimes occur at a place where
either drilling a well may not be possible or it may not
be advisable to drill a well conventionally, the
structure may exist at remote location so the planning
of transport.
5  Operational: OGFD ACHIEVEMENTS
Maximization of total profit(minimizing of losses)
Expansion in production capacity
Increase in market Share or value of asset.
Diversification of activities
Survival of industry.
It provides an opportunity or means to select best
alternative.
 Technical:
Provide flexibility from discovery to abandonment, Estimate
finite quantity of resource and heterogeneous nature of
reservoir/deposit.
 Economic:
Return on investments, Risk and Uncertainty.
6 Features of the proposal

1. Well defined The geological model

2. Estimated Reserves on the basis of material balance
methods.
3. Pressure-production data
4. Reservoir Simulation is usually used to match the
history and predict the future performance.
5. Pressure behavior, GOR, water-cut, oil production,.
6 Identification of pockets of by passed oil and yet to be
producible oil-from-saturated areas or remaining/new
un drained areas.
7 Inputs, in terms of additional wells or other
approaches like drilling of special well should be
indicated.
8 Work over details if executed and operations done in
the field/specific well be indicated.
9 Artificial lift strategies are analyzed.
10. Reservoir simulation studies are included so as to
project:
a. History-match the performance and propose
remedial measures.
b. Project the future behavior of the reservoir for
reserve allocations including production of oil, gas and
water.
11. The economic evaluation justifying the proposal.
6

Developing Custom-Designed
Field Development Plans

Field Development Planning is a process

of evaluating multiple development
options for a field and selecting the best
options.
Philosophy :
 Management is under increasing pressure to
translate discoveries into cash flow as
quickly as possible.
 On the other hand, growing field complexity
in many has made field development plans
(FDPs) increasingly difficult to formulate
and execute.
 Studies have shown that FDPs fail in
principal objective due to over-estimate field
production rates and decreased ultimate
recovery due to causes ranging from poor
characterization of the reservoir .
Opportunity & Applicability
 There are ample opportunity for integrating
available development technologies.
o Advanced geophysical and logging
technologies to help characterize reservoirs
o Drilling, completion and stimulation
technologies to enhance reservoir contact, well
productivity and ultimate recovery
o Lift and flow assurance technologies to ensure
high well deliverability
o Optimize surface and subsurface assets and
enhance production.
Multiple factors:
* Net present value, typically the key driver of
decisions for publicly-traded operators.
* Oil and gas recovery, which is heavily valued by
National Oil Companies and regulators.
* Operational flexibility and scalability, particularly
important factors for deep water and developments
of unconventional reservoir
* Capital versus operating cost profiles, with cash-
constrained operators often favoring solutions that
minimize up-front capital spending.
* Technical, operating and financial risks.
Characteristics custom designed
 Rapid prototype formulation of fdp as per the existing
field condition within the possible techno-economic
gain, to the maximum efficiency.
 Implementation of Risk Management to help in
modeling with multiple uncertainties at a field or
portfolio level
 Precise Well-Planning and Design-Modeling including
well wise simulation targeting at the field level.
 Rapid assessment of field development options and
costs.
 Efficient application of reservoir characterization,
drilling, completion and stimulation technologies.
 CASE STUDY
 INTRODUCTION:
An old field of about 50 years is still producing
under the strong water drive from a multilayer
complex sand stone reservoir the various faults
provide the direction of fluid movement. Production
history has indicated water free production for
about first 5 years subsequently water cut has
indicated an increase for remaining period. A
decreasing trend in hydrocarbon production rate is
also observed after a prolonged spell of 20 years. As
on date liquid productivity is maintained at 30m 3 /d
with 83% of water cut.
Over the years a total of
214 wells have
contributed from S-2
reservoir at one time or
the other. 58.82 MMt
(PD) out of which
22.319 MMm3 (20.355
MMt, 34.6% of OIIP)
has been produced.
Average oil production
during 2013-14 has been
@378m3/d (345 tpd)
through 117 wells at
83.6% water cut.
 Production Behavior
 This is attributed to:
• Increased water cut.
• Reduction of producer wells.(ceased wells)
•Gradual decrease in oil saturation
 Initially there was a uniform movement of owc but
after a span of time-5 years , a preferential
movement of water has also been observed form
the crestal part to the areas away from crest. Many
attempts have been made to control the water
production thus giving a temporary increase in
production of oil. As on date liquid productivity is
maintained at 30m3 /d with 83% of water cut.
 RESERVES
PRODUCTION

RESRVOIR PRESSURE
A decrease(of the
order of 20-30
Kg/Cm2 (10-12%)
form 244 Kg/ Cm2 to
224 Kg/ Cm2
Presently a pressure
of 244 Kg/ Cm2 is
being observed.
Reservoir and Fluid Properties:
Initial reservoir pressure has been 246 kg/cm2
at the mid of the oil reservoir
The permeability: 400md
Saturation Pressure: 85 Kg/cm2.
Oil API (23.50), GOR (49v/v),
Reservoir temperature (740C)
Sw=25%, Sorw= 30%,
Basic PVT properties-
FVF at Pb : 1.17 Oil density, gm/cc : 0.912 ,Oil
Viscosity, cp : 2.54
 VITAL CONSIDERATIONS
 In this case main producing area is with high well
density, where the water has moved faster thus
leading to high water cut in the structurally higher
wells, whereas, in the flank, un-drained area is still
available at several places.
 The stage by stage shifting of perforations has resulted
in limited scope of WSO /layer transfers in the existing
wells.
 The in-place volume obtained after history match was
found to be of the order of 54.267 MMt.
 This was found to be similar to that determined by
map investigations.
 FIELD PROJECTIONS :
 On the basis of technical analysis(simulation
studies) like oil movement, saturation variation
of various fluids, pressure profile ect. , the
expected cumulative oil production is of the
order of 24.931MMm3 (22.39 MMt) i.e. a
gain of 0.534 MMm3 (0.468 MMt,).
 The Oil recovery would be 41.9% of model
OIIP by Mar’2035.
 It also projects :
 The terminal rate oil as 252m3/d &
 Terminal water cut of 90.9%
 THE PROPOSAL
IMPLEMENTATION OF THE PROPOSAL
WOULD INVOLVE DRILLING OF (X)
ADDITIONAL DEVELOPMENT LOCATIONS
AT AN AVERAGE DISTANCE OF 500M AND
THESE WELLS WILL BE DRILLED WITH
STRICT RESERVOIR MONITORING IN A
SPECIFIED TIME SCHEDULE.
LIMITING CONDITIONS:
FBHP : 100 Kg/cm2 , Water Cut : 99 %

Limiting GOR value factor 2000 v/v

  ECONOMIC OUTCOME
As the future exploitation strategy of the said
field is concerned, completions may not be
sufficient, high liquid withdrawal from
additional locations may be considered a
viable factor for the exploitation strategy of
this reservoir in view of following economic
scenario
 EXPECTED YIELD
ON THE BASIS OF ADDITIONAL LOCATION

No. of locations: X
Peak Oil rate, m3/d : 448 (393 tpd during 2018-19)
Cumulative Oil Production, : 24.93 (22.74 MMt) By Mar’35
Recovery, % : 41.9
Terminal Oil Rate, m3/d : 252 (230 tpd)
Terminal Water Cut : 90.9 %
Incremental Oil, MMm3 : 0.53 (0.467 MMt, 0.9%)
 FINANCIAL IMPLICATIONS/INDICATORS
 For carrying out techno-economic feasibility of
the present proposal, various economic
parameters like Oil price, currency conversion
rate, deductions and costs escalation rates etc.
have been taken as per the established procedures
/principles..
 The cost estimates for recommended variant for
the economic analysis are based on cost
incurred during drilling of new wells in recent
years and its completion.
 Financial Implications :Indicators

Cost of well : Rs. 25 Crore.

Net crude oil price : US$53/bbl
(Escalated 1.25% p.a. for Nominated fields)
Discount Factor : 14%
Input for techno-economic analysis :
CAPEX of Rs. 238.2 Cr ,
PDV of profit is Rs. 30.94 Cr
IRR 23.5% and
PAYBACK DURATION : 3.0 YEARS.