Integrating Production Operations and Economics Under Uncertain Conditions

Abstract

The high oil prices of the last five years have motivated operators to unveil less historically attractive hydrocarbon resources and to optimize production operations from existing fields. In fact, many operators of brown and mature fields around the globe plan increases in production of more than 100% during the next five years. Optimizing production operations may — with the minimum effort— involve identifying opportunities for production increases from reservoirs, from individual wells, and from surface equipment. In addition, to sustain lean operations, production operations will require constant review of processes, management systems, adaptation of people, and applications of smart technology. Often, decisions must be made despite uncertainties of well performance, subsurface response, equipment failure rates, and downstream demands. The heterogeneity of information and the complexity of current assets imply an iterative approach to identify viable opportunities. Opportunities require management of risk and uncertainty. To accomplish such a challenging goal, it is necessary to estimate new capital investments for wells and facilities while considering both reservoir uncertainties and multiple scenarios for development. New capital investments are intended to increase the economic value of daily production operations. We present a structured methodology for integrating reservoir forecasts with wells and with surface facilities and operational issues. We also present several case-studies. Operational issues include well performance, subsurface response, equipment failure rate, and downstream demands. The methodology considers the integration of reservoir production uncertainty, well performance, drilling schedule compliance, workover success, and varying surface facility variables, such as availability, uptime, and capacities. Introduction In the past, multiple oilfield disciplines have been treated and considered as silos. We present a rationale for considering an integrated effort and for considering production operations as the common interface for all disciplines. Current Integration Challenges. The effort to successfully integrate data and processes in the value chain for oilfield production operations has many challenges. By viewing these challenges as sources of uncertainty, we can begin to understand their impact on decisions to effectively optimize production and forecast production and reserves. The widespread risk involved here is that people and systems are not following or supporting optimal processes that will deliver critical data for integration. People/Organizational Challenges. There are a variety of people and organizational challenges. Engineering and operations personnel are increasingly absorbed with day to day activities. The pressure to collect data and deliver daily reports tends to intensify compartmentalized behavior and to discourage information flow between key processes that should be better integrated. As an example, data on the availability of injection gas from compression facilities may not be integrated with the anticipated needs and performance of injection and producing wells and with the characterization of a reservoir. Work force demographics and dynamics also present challenges to integration. As an example, entire asset teams with their own processes and tools frequently merge with a new, parent operating company. The operating company must then assimilate these teams into their organizational structure via a cumbersome balance of centralized and distributed authority — an assimilation process that is further aggravated by asset-level, profit-loss accountability and authority. One of the key pieces of data from recent studies indicates that the average experience level for operations, production and reservoir engineering resources is about 15–20 years. These statistics are consistent with the "Big Crew Change" phenomenon that the oil & gas industry has anticipated. Unfortunately, a large percentage of expert professionals will soon retire, and their companies have not yet been fully able to institutionalize or transfer their knowledge. This perceived shortcoming also exemplifies the challenge of people/organization difficulties.

The Promise and Challenges of Digital Oilfield Solutions—Lessons Learned From Global Implementations and Future Directions

“…Advancements in the visualization of geological and geophysical properties of the reservoir provided a revolution in reservoir management. Similar advancements are necessary to bring transparency to the production value chain and to enable better decision-making in production operations (Saputelli, Mijares, Rodriguez, Deaton and Sankaran 2007). Data rich environments should focus on creating intuitive user interfaces (dashboards, trends, and reports) to provide the right information to the right people (Fig.…”

Optimizing Field Development Concepts for Complex Offshore Production Systems

“…The approach has been applied to a number of recent integrated asset projects. [8][9][10][11][12] Probabilistic forecasts are computed as described previously. 1,2 Model parameters are represented by probability density functions (pdf), such as normal, triangular, log normal, or beta distributions.…”

Intelligent Energy Concepts in Executive Education for Oil & Gas Professionals

“…For example, Saputelli et al (2003Saputelli et al ( , 2007aSaputelli et al ( , 2007b, Hocking & Shahly (2008), Moisés et al (2008), Vinturini et al (2008) and Sankaran et al (2009) report on the experience of implementing this vision for Digital Integrated Field Management, Rangow & Govia (2008) discuss the implementation for LNG Operations and Ursem et al (2003) for Drilling Operations.…”