Field planning and development of Oil and Gas Reservoirs using GIS Technology
Cost Model Overview
The Cost Model provides a single input level for common values for all scenarios
to be investigated. The approach results in consistent and easily modifiable base
costs. Sensitivity checks can easily be made by updating these costs. The Cost
Model structure is presented in Figure 5.
To aid in the selection process, sensitivity checks on the main cost drivers are
performed to determine if there is any degree of overlap, between the different
options. This is done using the Cost Model spreadsheet.
Project specific data sheets, developed for each element of the field architecture
are used to determine the unit costs that form the building blocks of the cost
estimate.
By combining the unit costs with the detailed list of hardware required for a
particular layout, as produced by the GIS, the CAPEX cost is obtained. Time
phasing of the CAPEX costs, using a pseudo schedule, allows for the calculation
of present value, (PV).
Similarly, OPEX can be estimated over the life of the development. This, coupled
with revenue forecasts derived from the production data (both total recoverable
reserves and monthly production rates over the life of the development), allows
the calculation of such economic factors as NPV, Net Cost per Barrel and Return
on Investment.
The economic indicators for each field development scenario are compared
together with “soft” issues, such as risk, operability and local content, in order to
determine the “optimum economics”.
The accuracy of the resulting estimate is dependent on the accuracy of the input
data. Initially, generic prices are used for coarse screening purposes but as the
project develops, the data is expanded and refined to progressively improve the
accuracy of the model.
Once a preferred layout has been selected, the cost output from the system is
used to form the basis of the control estimate and budget. The costs can be
further refined as necessary and risk analysis maybe performed to determine
contingency requirements.
Figure 5 The Cost Model Structure
Conclusions
Industry experience indicates that development and through life costs of a field
development for oil and gas reserves can be drastically reduced by
comprehensive front-end engineering. A system that allows fast creation of many
field development alternatives, while also integrating technical, commercial and
managerial concerns in a consistent manner is a part of the system. The basic
features of FOCU$ (the system) are;
- Platform for the integration of multi-disciplinary engineering, commercial and
management concerns
- Methodology for rapid preparation of alternative field development scenarios
- Interactive dialogue windows for easy manipulation of components with
immediate cost implications
- In-built logic for sub-component connectivity
- Transparent cost modeling
- Dynamic and time dependent cost optimization allowing for time value
assessment of money
- Economic factor evaluation such as CAPEX, NPV, Net Cost per Barrel and
Return on Investment
- Traceable decision-making process
- Consistent application of data for all scenarios
The models created in FOCU$ are customized for the unique characteristics of
each field development. However, the fundamentals of its philosophy remain the
same for each application by integrating the field knowledge and the experience
of the operator’s experts.
