• Force and Petroleum Economics of IOR/EOR General integrated work process for economic evaluation of IOR/EOR projects - Reserve reporting and IOR/EOR projects - Economic models of drilling versus IOR/EOR projects - Effect of new tax system and possible other changes in the future Arvid Elvsborg, Managing Director IPRES Norway Tor Andersen, Senior Consultant Xodus Group Lars Rustad, Senior Consultant Xodus Group Web Page: www.ipres.com Product Information: info@ipres.com Software Support: support@ipres.com
Setting the Scene for IOR/EOR “Most of the world’s future oil and gas reserves won’t come from new discoveries, but by finding ways to get more oil from regions the industry already has developed. We’ve probably reached the time, amazingly, when there’s as much to be got extra out of the oil fields we have discovered as there is to be found in new fields,” David Eyton, BP’s Group head of research and technology, said in an interview at the Offshore Technology Conference in Houston 2014.
Setting the Scene for IOR/EOR “ Based on existing technology the industry expects to leave more than half the oil it discovers in conventional reservoirs. BP, however, has embarked on a number of projects it believes will significantly boost the amount of oil it can extract from its existing wells or oil fields, helped in part by its new super computer in Houston that can make 2,200 trillion calculations in one second The behemoth calculator is designed to create much better images of reservoirs in places like the Gulf of Mexico, where salt canopies had forced oil companies to drill almost blind for decades It’s the lab for seismic we do it in the virtual world. And then when we find out that something works, we can build models and fields and geology. We can go out and try it for real.” . David Eyton, BP’s Group head of research and technology, said in an interview at the Offshore Technology Conference in Houston 2014.
Setting the Scene for IOR/EOR “BP’s also planning on expanding a new water -flooding technique across its offshore portfolio. One of BP’s big “ah - hah” moments came two decades ago when it discovered that injecting fresh water into offshore oil fields inexplicably harvested more oil. High-salinity sea water – the kind of water close at hand at offshore drilling sites – doesn’t get the job done as well. When we realized that fresh water in some occasions helps you to get more oil out, we set out almost for 20 years to figure out why is that. That insight and advancements in nano- scale measurement techniques paved the way for BP to deploy its first low-salinity water- injection technology to an oil field 200 miles north of the UK mainland. The industry is still in the early stages of understanding the full potential of advanced chemistry applied to water-flooding in oil and gas reservoirs. Our focus is on low-cost techniques with water flooding to get more oil out. Low-salination is well known. But actually, all the money we’re now spending on research and development in this area is on things that nobody yet knows about. There’s a lot more going on behind the scenes.” David Eyton, BP’s Group head of research and technology, said in an interview at the Offshore Technology Conference in Houston 2014.
Status IOR/EOR globally (World Oil Official publ. 2010, page 64) Figure 2. Worldwide EOR Production Rates Number of Projects Worldwide Production (KB/d) Thermal Chemical HC Gas CO 2 Others
Status IOR/EOR globally ( World Oil Official publ. 2010, page 68) IOR/EOR Maturity and deployment globally Steam Technology Deployment Gas injection Smart water flooding SAGD Commercial Pilots Polymer Hybrids Surfactant Foam In situ combustion R&D Risks Microbial Maturity
General integrated work process for economic evaluation applied to IOR/EOR projects Web Page: www.ipres.com Product Information: info@ipres.com Software Support: support@ipres.com
Integrated Development Assessment Primary Secondary Tertiary PROBABILITY Recovery Recovery Recovery Reserves / Resources – Drilling and Completion plans RESERVES PRODUCTION Natural flow Water Chemical flooding Solvent TIME Artificial lift Prod.start Pressure Thermal maintenance Nitrogen Gas – Water CO 2 Other injection Air SAGD Bacteria Investment/ Cash flow/Value Etc. Cash flow Results CAPEX/OPEX/DRILLEX
Resource Group Classification on NCS A – Additional Resources from IOR/EOR Resource SPE/WPC/ classes Definition SEC AAPG NPD 0 Historical production Developed 1 A Reserves in production Reserves Discovered Commercial 2 Reserves with an approved plan for development and production Undeveloped (Reserves) Reserves A 3 Reserves which the licensees have decided to recover 4 Resources in the planning phase (approval within 4 years) A Discovered Uncertain 5 Resources whose recovery is likely, but not clarified Technical A Commerciality Resources A 6 Resources whose recovery is not likely (Contingent Resources) A 7 Resources that not have been evaluated, i.e. new discovery 8 Prospect. Not drilled Undiscovered A 9 Lead Definitions based on Norwegian Petroleum Directorate (NPD). SPE-PRMS texts can be substituted.
UN Categories and Classes E axis categories G axis F axis categories categories
Project maturation pipeline Volumetric based Performance based Prospective Contingent Resources Resources Reserves 1. exploration 2. discovery 3. appraisal development development development 4. early 5. mature High 6. late uncertainty volumetric 3C 3P Possible Best 2C 2P Probable 1P 1C Proved Low time
6,00 Typical Model Elements 4,00 MAX 5,00 BASE 3,50 4,00 Oil (MSm3) MIN Project P100 3,00 New well 3,00 P0 Existing 2,00 P90 and Schedule Challenges 2,50 Mean 1,00 Oil (MSm3) P10 2,00 0,00 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Year 1,50 1,00 Midw ayProb.Disc.[Reserves] 0,72 C-structure[Reserves] 0,44 0,50 MProb.Disc.|Midw ayDisc.[Reserves] 0,40 LitProb.Disc.|Midw ayDisc.[Reserves] 0,13 0,00 K-2 Drill K-8 D&C P9 D&C 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Midw ay[Reserves] 0,13 Year LitProb.Disc.|Midw ayDry[Reserves] -0,13 K-5 Interv. P-17AH D&C RIG B Production Profiles C-structurePlateau production K-9 D&C 0,11 rate[Production] Lit OP1Drilling start date[Drilling] 0,10 Lit[Reserves] 0,10 M OP1Duration of drilling[Drilling] 0,10 2007 -0,2 -0,1 0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 RIG SCHEDULE Sensitivity Coefficients P-7 P&A P-12 WO P-7A D&C P-6 Interv. P-11AH Drill RIG A P-8 D&C 2007 RIG SCHEDULE IOR/EOR PROJECTS NEW WELLS PROCESS MOD. PIPELINE CAPACITIES K-2 FIELD AREA B -CAPACITIES -REGULARITY NEW WELLS EXISTING WELLS -SERVICE AVAILABILITY -ETC FIELD AREA A -CAPACITIES -REGULARITY EXISTING WELLS -SERVICE AVAILABILITY -ETC DISCOVERY PROSPECT ? PROSPECT ? IOR/EOR PROJECTS PUMP INSTALL.
Development Project Uncertainties (offshore example) Field Discovery Dev. plan CAPEX OPEX Economics Prospect Risks Uncertainties Scenarios Main Project Additional Projects Development/ redevelopment CAPEX? Drilling rig(s)? solution? OPEX? Processing Pipeline capacity/phasing ? capacity? # templates? New Pipeline Seismic ? Pre-drilled cost? wells? Cost per template? Seismic Drill # production reinterpretation? exploration wells? Cost per well? well? Depth Production conversion? rate per well? Appraisal well(s)? Injection wells? Revise reservoir Oil price? model? Regularity? Petrophysical Fault Challenges ? Schedule location? GOC? Communication WOC? Reserves between layers? Production Profiles?
Key elements in mature field development PROS A EOR A DISC A IOR A FIELD B FIELD A 2007 2030 2007 2030 2007 2030 EXISTING WELLS NEW WELLS NEW PROJECTS UPTIME DEFERMENTS SCHEDULE ITEM G WELL TRIGGER C SCHEDULE ITEM F PROJECT TRIGGER B SCHEDULE ITEM E PROCESSING CONSTRAINTS SCHEDULE ITEM D WELL TRIGGER B SCHEDULE ITEM C WELL TRIGGER A SCHEDULE ITEM B PIPELINE CONSTRAINTS PROJECT TRIGGER A SCHEDULE ITEM A PROS A OPERATIONAL RISKS ENVIRONMENTAL RISKS FIELD A SCHEDULE POLITICAL RISKS
Integrated Petroleum Risk Management work approach Fiscal Product terms prices Commercial terms Sub-Surface RISKS Schedule Production - Fast-tracking OPEX - Studies with clear purpose Drilling - Focus on relevant risks - Integrated teams CAPEX
Integrated Project Development Work Process to screen and rank IOR/EOR alternatives – a consistent approach Rock Volume Rock & Fluid Recovery PROBABILITY Parameters Characteristics Factor Oil and Gas Reserves / Resources RESERVES PRODUCTION Capacity Constraints Production Profiles Facilities & Wells, Schedule TIME Prod.start CAPEX OPEX Revenue Tariff Cash flow Cash Flow Cut P&A Fiscal off Abandonment Regime Probability Time Decision Tornado Summary Plots Plots Trees Plots Tables NPV
Compare and rank Decision tree analyses IOR/EOR alternatives for structuring Analyses Optimize and Compare update and rank A H E’ C Projects B E E E D HIGHEST F EMV G
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