Using Integrated Project Models to Evaluate Field Development Options

Abstract

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 single-phase, 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 decision-making processes - must account for these uncertainties. Many types of uncertainties must be considered when evaluating oil field developments. Reservoir performance is primarily affected by the properties of the reservoir. The expected reservoir performance is uncertain because the properties of the reservoir can never fully be defined at the point in time at which an investment decision is made. The cost of constructing and operating wells and production facilities is also uncertain, primarily because the design and use of these elements is directly a function of the performance of the reservoir. While the future performance of an oil field is uncertain, the reactions of managers to its performance are, by definition, deterministic. Managers comprehend the reality of a reservoir as it is revealed through its performance. For this reason, development plans must have sufficient flexibility to enable managers to react to, and accommodate, the performance of a reservoir as it unfolds. Furthermore, any methodology used to evaluate the benefits of competing development options must acknowledge and account for the practical nature of field developments. Integrated Evaluation Process The subsurface and surface elements of an oil field are inextricably linked. These interdependencies must be recognized and incorporated in any evaluation process used to support investment decisions. This is accomplished by assembling an appropriately staffed evaluation team, and using appropriate evaluation tools. Integrated Team. A team encompassing at least the following three broad technical disciplines should work together to perform an evaluation:Geoscientists, who are responsible for the geological evaluation of the reservoirs and calculation of the volumetrics.Reservoir engineers, who are responsible for preparation of reservoir potential models and development planning.Production / facilities engineers, who work closely with the reservoir engineers, to design wells and facilities necessary to achieve the objectives of the development plan.