Planning development

Based on the results of the feasibility study, and assuming that at least one option is economically viable, a field development plan can now be formulated and subsequently executed. The plan is a key document used for achieving proper communication, discussion and agreement on the activities required for the development of a new field, or extension to an existing development. 

The field development plan s prime purpose is to serve as a conceptual project specification for subsurface and surface facilities, and the operational and maintenance philosophy required to support a proposal for the required investments. It should give management and shareholders confidence that all aspects of the project have been 

Once the field development plan (FDP) is approved, there follows a seguence of activities prior to the first production from the field  

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This Hydrocarbon Exploration and Production is going to take you through all of the major stages In the life of an oil or gas field from exploration, through appraisal, development planning, production, and finally to decommissioning. 

Keywords exploration, appraisal, feasibility, development planning, production profile, production, abandonment, project economics, cash flow... 

Development planning and production are usually based on the expected production profile which depends strongly on the mechanism providing the driving force in the reservoir. The production profile will determine the facilities required and the number and phasing of wells to be drilled. The production profile shown in Figure 1.1 is characterised by three phases ... 

To a large extent the reservoir geology controls the producibility of a formation, i.e. to what degree transmissibility to fluid flow and pressure communication exists. Knowledge of the reservoir geological processes has to be based on extrapolation of the very limited data available to the geologist, yet the geological model s the base on which the field development plan will be built. 

The non-hydrocarbon components of crude oil may be small in volume percent, typically less than 1 %, but their influence on the product quality and the processing requirements can be considerable. It is therefore important to identify the presence of these components as early as possible, and certainly before the field development planning stage, to enable the appropriate choice of processing facilities and materials of construction to be made. 

As the conditions of pressure and temperature vary, the phases in which hydrocarbons exist, and the composition of the phases may change. It is necessary to understand the initial condition of fluids to be able to calculate surface volumes represented by subsurface hydrocarbons. It is also necessary to be able to predict phase changes as the temperature and pressure vary both in the reservoir and as the fluids pass through the surface facilities, so that the appropriate subsurface and surface development plans can be made. 

Figure 5.21 helps to explain how the phase diagrams of the main types of reservoir fluid are used to predict fluid behaviour during production and how this influences field development planning. It should be noted that there are no values on the axes, since in fact the scales will vary for each fluid type. Figure 5.21 shows the relative positions of the phase envelopes for each fluid type. 

The range of uncertainty in the UR may be too large to commit to a particular development plan, and field appraisal may be required to reduce the uncertainty and allow a more suitable development plan to be formed. Unless the range of uncertainty is quantified using statistical techniques and representations, the need for appraisal cannot be determined. Statistical methods are used to express ranges of values of STOMP, GIIP, UR, and reserves. 

It should be noted that the recovery factor for a reservoir is highly dependenf upon the development plan, and that initial conditions alone cannot be used to determine this parameter. 

Introduction and Commercial Application The reservoir and well behaviour under dynamic conditions are key parameters in determining what fraction of the hydrocarbons initially in place will be produced to surface over the lifetime of the field, at what rates they will be produced, and which unwanted fluids such as water are also produced. This behaviour will therefore dictate the revenue stream which the development will generate through sales of the hydrocarbons. The reservoir and well performance are linked to the surface development plan, and cannot be considered in isolation different subsurface development plans will demand different surface facilities. The prediction of reservoir and well behaviour are therefore crucial components of field development planning, as well as playing a major role in reservoir management during production. 

The prediction of the size and permeability of the aquifer is usually difficult, since there is typically little data collected in the water column exploration and appraisal wells are usually targeted at locating oil. Hence the prediction of aquifer response often remains a major uncertainty during reservoir development planning. In order to see the reaction of an aquifer, it is necessary to produce from the oil column, and measure the response in terms of reservoir pressure and fluid contact movement use is made of the material balance technique to determine the contribution to pressure support made by the aquifer. Typically 5% of the STOMP must be produced to measure the response this may take a number of years. 

The amount of detail input, and the type of simulation model depend upon the issues to be investigated, and the amount of data available. At the exploration and appraisal stage it would be unusual to create a simulation model, since the lack of data make simpler methods cheaper and as reliable. Simulation models are typically constructed at the field development planning stage of a field life, and are continually updated and increased in detail as more information becomes available. 

At the field development planning stage, reservoir simulation may be used to look at questions such as ... 

Analytical models using classical reservoir engineering techniques such as material balance, aquifer modelling and displacement calculations can be used in combination with field and laboratory data to estimate recovery factors for specific situations. These methods are most applicable when there is limited data, time and resources, and would be sufficient for most exploration and early appraisal decisions. However, when the development planning stage is reached, it is becoming common practice to build a reservoir simulation model, which allows more sensitivities to be considered in a shorter time frame. The typical sorts of questions addressed by reservoir simulations are listed in Section 8.5. 

The production profile for oil or gas is the only source ofrevenueior most projects, and making a production forecast is of key importance for the economic analysis of a proposal (e.g. field development plan, incremental project). Typical shapes of production profile for the main drive mechanisms were discussed in Section 8.2, but this section will provide some guidelines on how to derive the rate of build-up, the magnitude and duration of the plateau, the rate of decline, and the abandonment rate. 

The number of injectors required may be estimated in a similar manner, but it is unlikely that the exploration and appraisal activities will have included injectivity tests, of say water injection into the water column of the reservoir. In this case, an estimate must be made of the injection potential, based on an assessment of reservoir quality in the water column, which may be reduced by the effects of compaction and diagenesis. Development plans based on water injection or natural aquifer drive often suffer from lack of data from the water bearing part of the reservoir, since appraisal activity to establish the reservoir properties in the water column is frequently overlooked. In the absence of any data, a range of assumptions of injectivity should be generated, to yield a range of number of wells required. If this range introduces large uncertainties into the development plan, then appraisal effort to reduce this uncertainty may be justified. 

The type of development, type and number of development wells, recovery factor and production profile are all inter-linked. Their dependency may be estimated using the above approach, but lends itself to the techniques of reservoir simulation introduced in Section 8.4. There is never an obvious single development plan for a field, and the optimum plan also involves the cost of the surface facilities required. The decision as to which development plan is the best is usually based on the economic criterion of profitability. Figure 9.1 represents a series of calculations, aimed at determining the optimum development plan (the one with the highest net present value, as defined in Section 13). 

At the stage of field development planning, reservoir simulation would normally be used to generate production profiles and well requirements for a number of subsurface development options, for each of which different surface development options would be evaluated and costs estimated. 

When an oil or gas field has just been discovered, the quality of the information available about the well stream may be sparse, and the amount of detail put into the process design should reflect this. However, early models of the process along with broad cost estimates are needed to progress, and both design detail and cost ranges narrow as projects develop through the feasibility study and field development planning phases (see Section 12.0 for a description of project phases). 

The operations group will develop general operating and maintenance objectives for the facilities which will address product quality, costs, safety and environmental issues. At a more detailed level, the mode of operations and maintenance tor a particular project will be specified in the field development plan. Both specifications will be discussed in this section, which will focus on the input of the production operations and maintenance departments to a field development plan. The management of the field during the producing period is discussed in Section 14.0. 

When preparing a Field Development Plan (FDP), the production operations department will become involved in setting out the way in which the field will be operated, with specific reference to areas such as those shown in the following table ... 

Utilities systems support production operations, and should also be addressed when putting together a field development plan. Some examples of these are ... 

At the development planning stage, a reservoir mode/will have been constructed and used to determine the optimum method of recovering the hydrocarbons from the reservoir. The criteria for the optimum solution will most likely have been based on profitability and safety. The model Is Initially based upon a limited data set (perhaps a seismic survey, and say five exploration and appraisal wells) and will therefore be an approximation of the true description of the field. As development drilling and production commence, further data is collected and used to update both the geological model (the description of the structure, environment of deposition, diagenesis and fluid distribution) and the reservoir model (the description of the reservoir under dynamic conditions). 

The reservoir model will usually be a computer based simulation model, such as the 3D model described in Section 8. As production continues, the monitoring programme generates a data base containing information on the performance of the field. The reservoir model is used to check whether the initial assumptions and description of the reservoir were correct. Where inconsistencies between the predicted and observed behaviour occur, the model is reviewed and adjusted until a new match (a so-called history match ) is achieved. The updated model is then used to predict future performance of the field, and as such is a very useful tool for generating production forecasts. In addition, the model is used to predict the outcome of alternative future development plans. The criterion used for selection is typically profitability (or any other stated objective of the operating company). 

If the original field development plan was not based on a 3-D seismic survey (which would be a commonly used tool for new fields nowadays), then it would now be normal practice to shoot a 3-D survey for development purposes. The survey would help to provide definition of the reservoir structure and continuity (faulting and the extension of reservoir sands), which is used to better locate the development wells. In some cases time-lapse 3-D seismic 4D surveys carried out a number of years apart, see Section 2) is used to track the displacement of fluids in the reservoir. 

Fluid samples will be taken using downhole sample bombs or the MDT tool in selected development wells to confirm the PVT properties assumed in the development plan, and to check for areal and vertical variations in the reservoir. In long hydrocarbon columns (say 1000 ft) it is common to observe vertical variation of fluid properties due to gravity segregation. 

Monitoring the resenro/rpressure will also indicate whether the desired reservoir depletion policy is being achieved. For example, if the development plan was intended to maintain reservoir pressure at a chosen level by water injection, measurements of the pressure in key wells would show whether all areas are receiving the required pressure support. 

In Section 13.2, it was suggested that opex is estimated at the development planning stage based upon a percentage of cumulafive capex (fixed opex) plus a cosf per barrel of hydrocarbon production (variable opex). This method has been widely applied, with the percentages and cost per barrel values based on previous experience in the area. One obvious flaw in this method is that as oil production declines, so does the estimate of opex, which is nof the common experience as equipment ages it requires more maintenance and breaks down more frequently. 

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