Approach Maximizes Marginal Field Value by Going Back to Basics

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This article, written by JPT Technology Editor Chris Carpenter, contains highlights of paper OTC 32379, “Marginal Field Value Maximization by Going Back to Basics With Design-to-Value Enhancement,” by Yen P. Chan, Muhammad Y.S.M. Yasin, and Ahgheelan S. Thurai, Petronas, et al. The paper has not been peer reviewed. Copyright 2023 Offshore Technology Conference. Reproduced by permission.

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Value is defined by a quantum of functions or returns received from resources invested. In extremely marginal oil and gas fields, returns hardly meet invested resources profitably. Stranded, widely scattered resources add to the complication. The complete paper shares an approach to notional well- and facility-development concept generation for such fields by shifting emphasis to designing for value to improve project viability rigorously.

Problem Statement Based on Case Study

Case study Field X, located offshore Asia, is one of many oil resources in the region with virgin reservoir pockets and layers that are marginal in volume yet can provide a considerable recoverable volume if developed collectively. However, being horizontally scattered and shallow, with a reservoir true vertical depth (TVD) of less than 2000 m, the field was designed initially with up to 12 wells to maximize reach, thus requiring a large wellhead platform (WHP) at the surface. Gas lift was required from the first day of production, leading to two pipelines at a minimum.

Given the number of wells and surface facilities required, this led to a highly negative economic outcome. To quantify the extent of cost reductions and increase the recoverable targeted resources required to meet targeted economic indicators for a business case, the project team performed a series of sensitivity analyses.

Despite efforts to phase out field development, minimize surface facilities, and simplify well design where possible, the project remained negative in net present value because reducing the number of wells and facilities will lead to a dramatically lower estimated ultimate recovery (EUR), which is the key driver in any oil and gas development. The project team thus was presented with an almost unworkable situation where scope and cost reduction to satisfy economic returns simply meant that installation of neither wells nor facilities was viable.

The authors refer to the approach they describe in the complete paper as “going back to basics.” This approach, coupled with a design-to-value (D2V) approach, was effective in countering seemingly irreversible economic results. This approach is a systematic way to develop an optimal concept for maximum value realization because the agile approach questions every aspect of concept development to achieve minimum technical requirements while providing better clarity in cost/risk tradeoff through concept evaluation in a staircase manner. The process of executing D2V for marginal field development while managing technical risks is detailed in the following subsections for both well design and in facility-concept design.