Marginal Field Development – Challenges in Fiscal Oil Allocation

Abstract

Economic development of marginal oil fields usually requires utilization of nearby existing processing facilities to minimize Capital and Operational Expenses. However, tie-back of multi-phase well fluid to other existing processing facilities has challenges in fiscal oil allocation among various Shareholders. This paper presents the fiscal oil allocation experience in development of marginal fields, wherein well fluid is tied-back to existing facilities for further processing and export. Bu Haseer field is one of the marginal field in the offshore concession area of Al Yasat Petroleum Operations Company. Due to low oil production, standalone development of Bu Haseer field was not economical. Therefore, well-fluid from Bu Haseer fields is tied-back to existing facilities at Das Island. During the initial phase of production, well fluid from Bu Haseer field was measured using Multi-Phase Flow Meter (MPFM) prior to tie-back to the existing facility. Fiscal allocation of Bu Haseer oil production was based on MPFM measurement and converting the measured oil flow at operating conditions to stock tank conditions using PVT correlations. However, oil measurement using MPFM does not meet the accuracy acceptable for custody transfer, thereby not realizing the full commercial value of the production. Measurement accuracy is improved by installing a dedicated separator to partially stabilize the oil, and measure the separated oil flow as single phase using Custody Transfer Meter, complying with API MPMS (Manual of Petroleum Measurement Standards). The separated oil is pumped through Custody Transfer Meter, to avoid flashing across Custody Meter, which would have otherwise impacted its measurement accuracy. To convert the fiscally measured partially stabilized oil to fully stabilized oil at stock tank conditions, a Shrinkage Factor is applied to account for dissolved gases at separator operating condition. Shrinkage Factor is a function of separator operating pressure, temperature and well fluid composition; which could vary during operations as well as with producing life. Estimation of Shrinkage Factor becomes more challenging when production is from multiple reservoirs sources and downstream crude stabilization process parameters vary. A pre-defined algorithm for Shrinkage Factor is configured in flow computer considering all credible operating modes. Measurement of multi phase well fluid or partially stabilized oil is usually not recognized in the industry for fiscal allocation, mainly due to measurement inaccuracies and uncertainty in estimation of shrinkage. This paper presents Al Yasat operating experience and challenges with partially stabilized oil measurement and methodology implemented for estimating the oil shrinkage for fiscal allocation.

Marginal Fields Development in Nigeria: A Review of Extant Strategies

“…The classification of a marginal resource as a resource rather than a reserve is largely due to the thinness of its reservoir formation [10]. It goes without saying that several amounts of marginal resources have neither been explicitly stated in any oilfield development plans [14] nor formally included in the world's reserve statistics to date because the foundation for their total reserves calculations has not been fully established [15].…”