Early Offshore Petroleum Development Cost Estimates Using GISNarmina Lovely, GEOG 596AAdvisor: Patrick Kennelly
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Outline
• Introduction – the Business Challenge
• Summary of Discovery to Development Process
• Spatial Characterization of Prospects and GIS Methodology
• Engineering Characterization of Prospects
• Integration of GIS with Other Applications
• Presentation of Results
• Conclusion and Future Steps
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The business challenge
• Estimate petroleum development costs to guide exploration program
• Automate, standardize and codify engineering cost estimation
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The business challenge
TD: 25000
WD: - 5365
VOL: 310
AGE: Miocene
Pressure: 28378psi
HC Type: Oil
TD: 20000
WD: - 4964
VOL: 250
AGE: Miocene
Pressure: 24480psi
HC Type: Oil
15$ a barrel50$ a barrel
While X has bigger volume, Y might be a better value
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Discovery to Development Process
Exploration well
Exploration well
Appraisal well
Appraisal well
Exploration• Exploration prospect
inputs− Outline of prospect area
− Well location
− Reserve Size
− Water Depth
− Target Depth
− Fluid Type
− Expected Pressures
• Output is well cost and well timing
Appraisal• Number of appraisal
wells determined by reserve size
• Output is well cost(s), seismic cost, and timing
Field Development• Based on logic from tool
which will be seen in upcoming slides
• Output is all development costs and production forecast for life of field
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Spatial characterization of developments
30o
3000 feet
• Well Spacing Calculation
• Bottom Holes Placement
• Maximum Drill Reach Calculation
• Drill Center Distribution
• Gathering System Alignment for Multi-
drill Center Scenarios
• Generation of Tie-Back Options
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Spatial characteristics of developments Well Spacing Calculation
INPUTS:Hydrocarbon typeProspect Area and ShapeMaximum Volume per Well
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Spatial characteristics of developments Bottom Holes Placement
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Spatial characteristics of developments Maximum Drill Reach Calculation
INPUTS:
Target DepthWater DepthMaximum drill reachSpatial Well Distribution
30o
3000 feet
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Spatial characteristics of developments Drill Center Distribution
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Spatial characteristics of developments Gathering System Alignment for Multi-drill Center Scenarios
INPUTS:
Center of the ProspectDrill centers Spatial Distribution
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Spatial characteristics of developments Generation of Tie-Back Options
INPUTS:
Hydrocarbon TypePlatforms Spatial Distribution
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Engineering characterization of prospects
Engineering characterization of developments
• a. Drilling performance and well types
• b. Completion technologies and configurations
• c. Production facilities and tie-backs
• d. Additional production parameters
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Engineering characterization of prospects Drilling Performance and Completion Technologies
30o
3000 feet
• Drilling performance (days to drill 10,000ft)
• Varies by geologic target
• Well tangibles vary by geologic target
• Drill rig day rates ($/day) – company rates
• Rig type
MODU or Platform Rig
• Type of Well
Exploration, appraisal, or development
• Completion type
Wet tree or dry tree
• Maximum drill reach
• Establishes number drill centers required
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Engineering characterization of prospects Production Facilities and Tie-backs
• Wet Tree Local FPS host cost a function of:
• Peak field production
• Water injection requirements
• Number of wells
• Shut in Tubing Pressure
• Water depth
Typical Dry Tree Development(shown w/ subsea tie-back)
Typical Subsea Tie-Back Development
Typical Wet Tree Development
• Subsea tie-back to existing FPS host
• Oil – 25 mile radius
• Gas – 75 mile radius
• Subsea cost a function of:
• Number of wells
• Number of drill centers
• Distances between drill centers
• Shut in Tubing Pressure
• Dry Tree local FPS host cost a function of:
• Peak field production
• Water injection requirements
• Drill rig requirements (Dry tree development only)
• Number and type of wells
• Shut in Tubing Pressure
• Water depth
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Engineering characterization of prospects Additional Production Parameters
• Field production forecast is the sum of individual wells brought online per drilling and completion schedule. Well forecasts utilize initial rate, reserves per well, and decline by geologic age.
• Water injection wells are the ratio of producing wells with well depth consideration.
• Optimize facility options (dry tree versus Subsea tie-back) based on number of wells at each drill center
• Export pipeline cost included to existing FPS’s within 30 miles or nearest one
• Matches facility cost spending profile with first oil date
• Facility abandonment and salvage cost included
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GIS and Information Technology applied
Flow of Automation
Spatial characterization of developments
ArcGIS &
ET GeoWizards
Engineering characterization of developments
MS Excel
Organization of results
MS Access
Presentation of results
PowerPoint
VBA Automation
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Organization of results
A
Subsurface Data:Gross recoverable mmboe 250Net recoverable mmboe 63Reserves per well mmboe/well 9Number of producers 27Number of injectors 9
Capital ($m): Gross WI:9%E&A Drilling: 607 57Dev drilling: 11,788 1,107Facilities: 3,853 362Cap OH:Total: 16,248 1,525
Indicators(NRI) Success RiskedPs: 25%IRR %NPV7 ($m) %Disc. payback (yrs)IE (NPV/WI capital)
ProspectXSS Development w Semi Host BP CONFIDENTIAL
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Conclusions
• Manual process was automated for a batch of prospects
• Took days for each prospect manually, a matter of minutes automatically with favorable results
• ARCGIS was a key technology to automate the calculation
• Integration of GIS Technology with Access, Excel and PowerPoint
• Generated results for hundreds of prospects for comparison purposes: 800+ prospects, 2,300+ development options
• Future Steps:
− Incorporate an economic model for the output
− Simplify cost estimate updating
− Incorporate portfolio analysis toolkit
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Acknowledgements
• BP Engineering Team - Engineering Characterization of developments
• Charles Fried - Flow of Automation between GIS and Excel Engine
• Patrick Kennelly – Penn State Program Advisor