A Life Cycle Approach for Assessing Production Technologies in Heavy Oil Well Construction Projects

Ortiz-Volcan, J. L.; Iskandar, Ramez Antonio

doi:10.2118/150709-ms

Cited by 3 publications

(1 citation statement)

References 5 publications

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“…The study demonstrates that LCC can play a key role in selecting the best liquefaction process alternative for floating liquefied natural gas (LNG) production facilities. Ortiz-Volcan and Iskandar (2011) proposed an LCC approach to support selection of suitable production technologies for heavy oil well construction projects. Burlini and Araruna (2013) applied the concept of LCC analysis to waste management programs during the exploration phase of offshore oil and gas projects.…”

Section: Research Backgroundmentioning

confidence: 99%

Selection of the most suitable life extension strategy for ageing offshore assets using a life-cycle cost-benefit analysis approach

Animah

Shafiee

Simms

et al. 2018

JQME

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Purpose A substantial number of production assets in the offshore oil and gas industry are facing operation beyond their anticipated design life, thus necessitating a service life extension program in the future. Selection of the most suitable strategy among a wide range of potential options to extend the lifetime of equipment (e.g. re-using, reconditioning, remanufacturing, refurbishing and adding on safety/process control measures) remains a challenging task that involves several technical, economic and organizational complexities. In order to tackle this challenge, it is crucial to develop analytical tools and methods capable of evaluating and prioritizing end-of-life strategies with respect to their associated costs and quantifiable benefits. The paper aims to discuss these issues. Design/methodology/approach This paper presents a life-cycle cost-benefit analysis approach to identify the most suitable life extension strategy for ageing offshore assets by taking into account all the capital, installation, operational, maintenance and risk expenditures during the extended phase of operation. The potential of the proposed methodology is demonstrated through a case study involving a three-phase separator vessel which was constructed in the mid-1970s. Findings The results from the application case indicate that the capital expenditure (CapEx) accounts for the largest portion of life cycle cost for the replacement strategy, while risk expenditure (RiskEx) is the major contributor to costs associated with life extension. A sensitivity analysis is also conducted to identify factors having the greatest impact on the optimum life extension solution, including oil price, production rate and money interest rate. Practical implications In the past, the decisions about life extension or replacement of in-service equipment were often made in a qualitative way based on experience and judgment of engineers and inspectors. This study presents a “quantitative” framework to evaluate and compare the costs, benefits and risks associated with life extension strategies and subsequently to select the best strategy based on benefit/cost ratios. Originality/value To the best of authors’ knowledge, no studies before have applied life cycle assessment and cost-benefit analysis methods to prioritize the potential life extension strategies in the oil and gas industry sector. The proposed approach not only assists decision makers in selecting the most suitable life extension strategy but also helps duty holders reduce the costs corresponding to life extension execution.

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Section: Research Backgroundmentioning

confidence: 99%

Selection of the most suitable life extension strategy for ageing offshore assets using a life-cycle cost-benefit analysis approach

Animah

Shafiee

Simms

et al. 2018

JQME

View full text Add to dashboard Cite

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Supply Chain Modeling of a Steam-Based Thermal EOR Heavy Oil Field Development Project in Kuwait Lessons Learned

Al‐Obaidi

Ortiz-Volcan

Gómez

et al. 2016

Day 3 Thu, December 08, 2016

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World class oil and gas operating companies apply supply chain management to minimize the risks of investment costs overrun, delays and future higher operating costs of field development projects. Supply chain is a cross-functional approach to plan the flow of goods and services required by a project, based on its front end loading (FEL) specifications, in order to meet business objectives with a successful execution and total satisfaction of the final customers. This paper presents lessons learnt from modeling the supply chain of a steam-based thermal enhanced oil recovery (EOR) heavy oil field development project in Kuwait. A critical building block of a supply chain model is the supply-demand matrix, which is prepared using information about the needs of the steam-based thermal EOR assets (natural and physical) and identification of requirements organized in segments, around capital, technology or manpower categories. A preliminary identification was made about local capabilities to meet these requirements. A work breakdown structure from the front-end engineering design was used to generate a supply-demand matrix with materials including special needs such as energy, water and logistics. The model allows the identification of critical requirements and the information to design alternate options to reduce the risk of lack of supply. One practical result is a map with all required suppliers classified according to the type of goods or services, and the specifications or scope of work for selecting a contracting strategy. Supply chain modeling provides a best practice to meet the demand of goods and services of complex heavy oil steam-based thermal enhanced oil recovery projects. It would help to guide the process of building capabilities in Kuwait oil industry for this type of recovery technologies, which will play a critical role in long-term business strategy.

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Strategic Competencies for Integrated Subsurface-Surface Heavy Oil Field Operations and Optimization

Ortiz-Volcan¹,

Al-Khamees²,

Ahmed³

2019

Day 3 Tue, October 15, 2019

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Production operations and optimization strategic competencies are critical for effective business performance in operating companies that are transitioning from primary/secondary recovery to tertiary recovery or when the number of field development projects for non-conventional oil, become a significant percentage of their future oil production targets. This paper presents a practical approach for identification, definition and measurement of ten strategic competencies required to meet requirements of operations and optimization of heavy oil assets. The competency development model uses a fast track on the job learning approach that takes between 6 months to 1 year to reach a minimum level of performance. The identification of competencies is activity-based considering analog heavy oil fields undergoing improved oil recovery operations. Model is organized into 8 phases: 1) Data review to assess uncertainty, 2) integral reservoir review, 3) integral well review and nodal analysis, 4) identification of opportunities in drainage area, completion, production methods and surface, 5) selection of integrated solutions combining technology options, 6) economic analysis within exploitation plan 7) production optimization project definition, 8) production optimization execution and evaluation. Each phase undergoes activities with relative duration followed by decision gates with relative contribution of disciplines grouped in 10 functions (well productivity, production methods, surface processes, reservoir, geology, well construction and maintenance, integrated automation, health, safety & environment, reliability and activity based project and costing). Ranges of weights in percentages and duration are calibrated using analog fields or typical projects, as input for stochastic modeling to account for uncertainty. The application of this approach in heavy oil fields in Kuwait, allowed identification of technical competencies classified under 10 functional competency groups under four major categories: Subsurface-reservoir, subsurface-well, surface facilities & production operations and asset integration & planning. These technical competencies were mapped with three scenarios for intensity of work: minimum (low), medium (likely) and maximum (full) to conduct critical activities on annual basis during the heavy oil field life cycle. Worldwide heavy oil analogs provide foundation to validate and calibrate the model, and then used as planning tool. The model allows stochastic modeling of person-hours and cost of work force, including the competency development and assurance, included in Capital and Operational Expenditures as part of the economic model for evaluation of heavy oil optimization opportunities. The presented approach is a practical tool for mapping required competencies and intensity of work force for more reliable subsurface-surface integrated production operations of heavy oil fields. The phased model allows easier planning and flexibility to conduct exercises with estimates of work force for a range of potential business scenarios.

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A Life Cycle Approach for Assessing Production Technologies in Heavy Oil Well Construction Projects

Cited by 3 publications

References 5 publications

Selection of the most suitable life extension strategy for ageing offshore assets using a life-cycle cost-benefit analysis approach

Selection of the most suitable life extension strategy for ageing offshore assets using a life-cycle cost-benefit analysis approach

Supply Chain Modeling of a Steam-Based Thermal EOR Heavy Oil Field Development Project in Kuwait Lessons Learned

Strategic Competencies for Integrated Subsurface-Surface Heavy Oil Field Operations and Optimization

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