Field planning and development of oil and Gas reservoirs using GIS technology

Field planning and development of Oil and Gas Reservoirs using GIS Technology

John E. Pierce II and Richard T. Hill
J P Kenny Inc
16340 Park Ten Place Drive
Suite 242
Houston, Texas 77084

Abstract
The activities in advancing a deepwater oil or gas field to production stage are numerous and the interdependency of the activities, complex. Determining how to best extract the discovered fluids from the reservoirs and deliver the products to the market, while minimizing CAPEX, OPEX and risk of failure is critical. A dynamic and time dependent costing and optimization system for field development has been developed that allows flexibility in technical decision revisions, commercial re-evaluation of options available and time value assessment of money. The service combines the application of Geographical Information System (GIS) technology to handle the spatial context of the subsurface, surface and above water field components linked via a GIS Interface to the Cost Model, to facilitate economic evaluation. The Cost Model is in spreadsheet format producing a transparent costing system instead of the more common “Black Box” model. Multiple field layout scenarios are developed using the available reservoir simulation analysis, drilling constraints, production concerns, facilities requirements and intra-field pipeline architecture. The Cost Model generates costs for each scenario. The flexibility of the system allows sensitivity analysis and “what-if” investigations to be carried out while evaluating the economic viability of each scenario.

Introduction
The CAPEX cost for deepwater developments are projected to be in the billions of dollars and as such are an order of magnitude increase in cost above most of the field developments to date. The total planned CAPEX expenditure for deepwater developments, over the next five years, is over $35 billion. The efficient development of deepwater fields for each new development is crucial in assuring the economic viability of these fields.

To date, the development of deepwater oil and gas reserves, to a large extend, have employed many of the methodologies used for shallower water fields. Project development for the shallow water fields have been based on sound engineering judgment that relies heavily on a knowledge database built from existing fields.

The application of existing technologies in deepwater developments no longer applies. Commercial viability of the deepwater developments demands efficient design philosophy and implementation of new technologies in materials, construction, operation and management.

Depending on the size of the field, its complexity and its location, a team of experts derives a number of feasible development scenarios. Each scenario has input from disciplines such as reservoir, drilling, production and facilities. This input is typically supplemented with the involvement of Business, Commercial and Operation Managers. During the execution of such work the volume of information generated by the field development team and the inter-dependency of the different sets of information is often the cause of difficulties in maintaining the integrity of the project developed data, long project execution schedules and high costs.

The integration of this information in a single system that provides a visual user interface, coupled with a dynamic economic model that provides evaluation of economic indicators and facilitates the ability to audit the decision-making process, thus shortening the development time for each scenario was required. A system for the integration of technical, commercial and managerial issues related to the field development process has been developed. The system is called FOCU$. Although developed for deepwater application, the system is applicable to both offshore and onshore fields, new or existing, and can be applied at all stages of field development from the initial coarse screening of options, through the detailed engineering phase, as well as carrying on through field maturity and eventual abandonment.

Field development process
Responding to the myriad of questions arising on how it is best to extract the discovered fluids from the reservoirs and deliver the products to the market is a daunting task. Also, to minimize CAPEX, OPEX and the risk of failure, while at the same time maximizing the profits and meeting the environmental goals, is a complex problem. At the early stages of a field development there is very little reliable information available. However, based on what little information is available, a number of field development scenarios can be investigated assuming a series of potential outcomes of fluids contained within the reservoir(s).

Hence, the field development process is executed in a cyclic fashion. That is, based on initial preliminary information field development scenarios that are developed, then with the next revision of new data, the scenarios are modified and normally reduced in total number. This process is repeated several times before an optimum solution is reached. At the start of each cycle the phasing of the development is also reconsidered. This consist of, the number of wells needed to be drilled to reach a target production, the number of manifolds and flowlines required to be installed and the corresponding offshore facilities for the first phase of the development are identified. The CAPEX, OPEX and economic factors are evaluated based on the total income from the field over the first phase. The second phase components of the field are then added on and the commercial implication studied. The trade offs between installation of components in the first rather than the second phase of the development are identified. Subsurface issues, location and environmental consideration, as well as technical, commercial and geo-political constraints can further complicate the field development team’s task. The field development process in the past has been a time consuming and laborious task.

The field optimization and cost updating solution
As previously discussed to meet the field development challenges a GIS based system for the integration of management, commercial and multi-discipline engineering issues have been developed for “planned” and “mature” fields both offshore and onshore.

The system provides an interactive graphical representation of the scenario models in the GIS front-end and exports this information via the GIS Interface to the Cost Model showing immediate cost implications brought about by changes within a given scenario. It also provides a platform for the field development team to record subsurface geohazards and environmental, technical, and commercial concerns while examining the interaction between large numbers of parameters affecting the optimum solution. The integration of a multitude of issues within one system in a consistent manner, with measurable relationships between the parameters, allows for fast engineering decision mading in a workshop environment. Thus providing a means for the comparison, evaluation and optimization of alternative layouts using common and consistent data. It also maintains the ability to track changes made to the scenario models while providing a complete history of the evolution of the field development.

Some of the disciplines involved in a field development are shown in Figure 1; with a sketch of a simple generic field development scenario incorporating a Floating Production, Storage and Offloading vessel (FPSO) shown in Figure 2.

Figure 1 Various Disciplines Involved in a Deepwater Development

Figure 2 Generic Schematic of a Simple Field Development
The FOCU$ system has two main components:

The GIS System which is made up of the GIS front-end and the GIS Interface
The Cost Model CAPEX, OPEX and economic indicates that are derived GIS System Overview
Integration of data within the system is achieved through the application of Geographical Information System (GIS) technology.
Layers of information for the field development are grouped as presented in Figure 3. The grouping of data in such a manner provides the necessary flexibility to investigate various scenarios.
In the GIS, elements for each component in the field development are defined through customized attributes for the elements.
The dynamic ‘Hot-Linking’ of the field development components and the Cost Model is achieved through the development of a GIS System Interface.
The Logic for each element and its associated components is maintained through the application of “Stick Diagrams”. A typical Stick Diagram is shown in Figure 4.
The logic presented in the Stick Diagrams identifies the connectivity between elements.
Approval of the logic in the Stick Diagrams from the various disciplines achieves “Buy-In” from these groups and gives the system a common basis to evaluate field development scenarios.
The GIS and Cost Model adhere to the logic and assumptions made in the Stick Diagrams and thus are highly project specific.
On applying the logic, the data given by each discipline is imported into the system and ownership of the data is recorded.

Figure 3 Representative layers of Information and Database Elements

Figure 4 Stick Diagram of a Typical Daisy Chained Water or Gas Injection Flowline System
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.