Bridging HSE Risk with Cost Analysis: A Model for Optimising Completion Fluid Choice

Abstract

The hazard profile of a well construction fluid (WCF) impacts on environmental consent conditions, waste management choices and health, safety and environment (HSE) risk levels. All of these impacts can have a significant influence on the cost of the well construction operation. HSE hazards and hazard related costs should therefore be considered as an integral part of the process of choosing the most cost-effective WCF. The quantification and absolute costing of the HSE risk posed by a WCF is laborious and there is no standard or universally acceptable method for absolute calculations. In order to overcome these constraints, a transparent, systematic and operation-specific model for assessing the overall cost consequences related to the HSE hazard profile was developed. The model has first and foremost been developed as a management tool, which allows fluid HSE aspects to be taken into account on par with other variables that impinge of project economics. The model is based on relating inherent fluid HSE properties, such as ecotoxicology and occupational health hazards, to legal and corporate requirements for HSE and waste management. These requirements directly influence operational variables and consequent costs. The primary objective of the development work was to create a user friendly tool for comparing the overall effect on operational costs that different fluids may have. It includes costs related to normal operations as well as predicted cost of risk. The model also allows the costing of HSE risks associated with using a particular WCF to be related to corporate HSE policy targets. The developed model was implemented in Excel. It provides the framework for comparing the WCF options based on operation-specific data input. This paper presents the model structure and the organisation of the supporting tool, using two high-density completion fluids (cesium formate and zinc bromide brines) as example fluids. The assessment gives a clear overview of the comparative HSE risk levels and the associated financial implications of choosing one or the other of the assessed fluids. The model allows operators the possibility to reflect their individual corporate HSE values in the costing exercise through application of weighting factors By bridging the gap between cost analysis and HSE assessments, the method provides a powerful yet practical means for incorporating HSE aspects into the process of defining and selecting the most cost-effective WCF. Introduction Well construction operations are both technically complex and costly undertakings. The cost of WCFs is a fraction of the total, but nevertheless represents a significant cost item. The overall world market for oil field chemicals, including well construction chemicals, reached almost $8 billion in 2004 and is expected to total over $9 billion in 2009 (Modler and Inoguchi 2005). These chemicals are developed to meet certain technical, economic and HSE criteria. However, these aspects are seldom evaluated simultaneously. In particular, the overall impact on cost that the hazard profile of a WCF has on well construction and operational economics, has rarely been analysed. Partially this is considered to be due to a lack of a suitable tool to support such calculations. This paper presents a model and accompanying tool that supports informed decision making through enabling overall assessment of total operational costs associated with well construction fluids.