Field development and portfolio evaluation

2014-08-04 Classification: Open

How to achieve acreages?

• Discoveries from

exploration

• Buying at an open marked

2014-08-04 2 Classification: Open

3

Business

case 1

Business

case 4

Business

case 8

Business

case 10

Business

cases

Business

case 2 Business

case 3

Business

case 5

Business

case 6

Business

case 7

Business

case 9

Business

case 11

Corporate needs to have a “common process” to make the right choices

HQ

Corporate’s challenge – to select the best opportunities

Overview - Reservoir and Formation evaluation

Resources and reserves

Static information / Recourses (in place)

STOIIP = GRV * Porosity * So * N/G / Bo

Dynamic information / Reserves (producible)

Produced volumes = STOIIP * Recovery Factor

GRV = Gross Rock Volume

So = Oil saturation

N/G = Net out of Gross

volume

Bo = Formation volume

factor or shrinkage

factor

Dynamic parameters - equations

− Darcys law Q = -K A (Pb – Pa) / viscosity * L

− Production Index PI = QT/(PG – P)

• The productivity index (PI) takes into account the reservoir

characteristics at the inlet of the well, through the specification of a

relation between the inlet total flow rate QT, the well inlet pressure P and

the reservoir pressure PG. For a one phase oil well or for a two phase

gas-oil homogeneous mixture in the well, the relation is given by:

QT = PI(t) * (PG - P)

Governing documents

• Link to FR 01 - Exploration

http://docmap.statoil.no/DocMap/page/doc/dmDocIndex.html

• Link to FR 02 - Field development and IOR

http://docmap.statoil.no/DocMap/page/doc/dmDocIndex.html

LINK TO ARIS

8 - Classifi

cation:

Internal

(Restric

ted

Distribu

tion)

2010-

06-23

HSE

CSR

DRILLING

FACILITIES OPERATIONS SUBSURFACE

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

20000

2023

2025

2027

2029

2031

2033

2035

2037

2039

2041

2043

2045

2047

2049

2051

Oil

pro

du

cti

on

rate

(S

m3/d

)

0

20

40

60

80

100

120

Cu

mu

lati

ve o

il p

ro

du

cti

on

(M

Sm

3)

PETECH <50 50-100 100-200 200-400 400-700

700-1000 ENPV NPVCircles in

mmUSD

100 1000

0.10

1.00

0.20

0.30

0.40

0.50

0.60

0.70

0.800.90

Recoverable Reserves in mmBOE

265

81

<50 50-100 100-200 200-400 400-700700-1000 ENPV NPV

Circles in

mmUSD

100 1000

0.10

1.00

0.20

0.30

0.40

0.50

0.60

0.70

0.800.90

Recoverable Reserves in mmBOE

265

81

100 1000

0.10

1.00

0.20

0.30

0.40

0.50

0.60

0.70

0.800.90

100 1000

0.10

1.00

0.20

0.30

0.40

0.50

0.60

0.70

0.800.90

100 1000

0.10

1.00

0.20

0.30

0.40

0.50

0.60

0.70

0.800.90

Recoverable Reserves in mmBOE

265

81

265

81

ECONOMICS

Technical evaluation and commercial analysis (in all DG processes). All the disciplines involved in an evaluation

Iterations

FACILITIES

9 -

Classificati

on: Internal

(Restricted

Distribution

) 2011-

08-30

Resourses and reserves

The Capital Value Process

The Capital Value Process (CVP) is our stage gate decision process for

investment

Operating model

Business

Development

(Idea to Deal)

Needs for Exploration projects passing DG0

2014-08-04 11 Classification: Open

Exploration projects passing DG0 shall demonstrate economic potential

for the discovery and that the in-place volume uncertainty has been

reduced to a level that it is not the main development risk.

The DG0 shall be approved by the receiving business area, based on

a recommendation from the Exploration business area. Required work leading up to DG0:

When appraisal is needed or warranted:

Conduct appraisal activities and evaluate results

Evaluate and QC volumes and remaining risks of the discovery. The volume estimates

shall be based on the expected discovered recoverable resources with associated

ranges (P90-P10) included, and the economics shall be calculated for this case

Identify and assess additional prospects and segments that may impact the

development concept.

For unconventional hydrocarbons this will mean additional subsurface potential in general

update the value of the business case

BUSINESS PLANNING (DG1)

2014-08-04 12 Classification: Open

The purpose of the business planning phase (leading up to DG1)

is to justify further development of the business case, and the

establishment of an investment project.

Feasibility studies shall demonstrate that one concept is

technically, commercially and organizationally feasible, and that

value chain fit, economic analysis and relevant stakeholder

analysis justify further development. The business planning phase shall:

Frame the business case, develop objectives and set direction

Document that the business case is in line with group strategies

Identify possible development stoppers

Demonstrate technical- and economic feasibility

Identify possible concepts and any added value opportunities

Identify the needs and potential for new technology

Identify schedule for regulatory applications

Align relevant stakeholders around further development

Establish the decision documents for DG1

CONCEPT PLANNING (DG2)

2014-08-04 13 Classification: Open

The purpose of the concept planning phase (leading up to

DG2) is to identify alternative concepts, select a viable

concept, define and document the selected concept and

develop Design basis for approval at DG2. A concept is described with the following main elements:

Commercial (e.g. legislation, agreements, licensing, financing, marketing and supply, product

sharing, taxes)

Reservoir or energy resource (e.g. depletion strategy, flow assurance)

Technical (e.g. drilling & well, facilities)

Operations (e.g. plant start-up, operation and maintenance)

The concept shall be selected based on defined criteria in due time prior to DG2.

The concept planning phase shall:

Provide a firm definition of the Design basis

Evaluate and compare alternative concepts

Screen-out non-viable options and mature the preferred concept to fulfill business case objectives

Develop basis for project execution (including identification of applicable permits or regulatory

approvals)

Align relevant stakeholders around further development

Establish the decision documents for DG2

DEFINITION (DG3)

2014-08-04 14 Classification: Open

The purpose of the definition phase (leading up to DG3) is to

further mature, define and document the business case based on

the selected concept for project sanction.

Any options or technical solutions not selected prior to DG2 shall

be decided prior to DG3. The definition phase shall:

Execute Front End Engineering Design (FEED) studies

Mature the business case to avoid late project changes

Plan and prepare the execution phase

Prepare submittal of application(s) to the authorities

Establish the basis for agreement (e.g. contract) awards

EXECUTION (DG4)

2014-08-04 15 Classification: Open

The purpose of the execution phase (leading

up to DG4) is to realize the business case. The execution phase shall:

Detail design, procure, construct (including install) and complete the agreed facilities and

wells

Perform handover to Asset / operations

Prepare for start-up, operation and maintenance

Establish Termination agreement

High exploration activity

• Brynhild well finalised August 2010

• Late 2010/ 2011:

− 4 planned exploration wells (Dougal, McHenry, Dr. No, Theta NE)

− 2 exploration extension wells

− Possible Beta Vest appraisal

• 2012, possible candidates

− Pinky/Dunkel, Olga, Fanten, Carmen*,

• 2013, possible candidates

− Langemann, Brynhild Sør, Slogen, Mju, Garm, Lambda N

McHenry

Dr.No

PL303 License

Dagny

Gudrun

Alfa sentral

Brynhild

Dougal

Theta NE

Volve N and

NW

Fanten

Olga

Slogen

Pinky/Dunkel

Langemann

Carmen

Brynhild Sør

Beta Vest appraisal

Zorn

Picasso

Mju

Lambda N

Value drivers

Are there any critical time drivers?

Do we understand the commercial issues?

Do we know the strategic issues?

Infrastructure

• Are there alternative tie-in hosts?

• Do we know the capacity in tie-in host?

• Weight and space available on the platform

• Fluid compatibility - quality

• Competition with other projects

• Commercial issues

• Unitization and redetermination

Project plan

• Manning (capacity, competence and project continuity)

• Time schedule

• Partner alignment

• Authority alignment / PDO

• Is there a need to apply for a deviation from governing

documents

Database

• Seismic quality and coverage

• Formation fluids

• Core samples (what is present and what is needed, and for

which purpose)

• Wells / Log information; available and needed

• Dynamic data available and needed

• Special studies, Mineralogy, SCAL, Rel/perm, biostrat,

geochemistry, LFP etc; available and / or needed

Producibility vs appraisal program

• Do we have analogue production experience?

• Are we fully aware of the drive mechanisms?

• Do we know enough to understand the mechanical strength

of the reservoir rocks?

• Is there a need to introduce unconventional methods, and

which consequences does that make?

• Do we have a «disposal» strategy? (cuttings, water, CO2)

• Etc.

Standard equipment / facility ???

“Claes Olsson” prospects and fields

Problematic HPHT fields (Technology and HSE elements)

Complicated flow assurance (Infra structure)

Need for heavy boosting (Facility robustness)

Well – cost / benefit discussions

• In case of only one well; Will it be a need for a more

comprehensive sampling program?

• Cores and or image-logs

• Dynamic test information (consider how long the test

needs to be)

• Planned side track(s)

• Overburden information (Vs og Vp, seal integrity, potential

for waste / deposal of produced water, CO2 and cuttings

• Evaluation of 4D potential (for reservoir monitoring)

Reservoir characterization and modelling

Regional/conseptual geological understanding?

Is there a need for a 3D model? If yes!

Testing of dynamic flow in reservoirs – contolling questions

• Why do we do dynamic fluid testing in wells?

• When should we plan for dynamic tests?

• What are the constrains we have to face, in doing good dynamic tests?

• What kind of testing tools and programs do we use?

• What can we read from dynamic tests and what are the pit faults?

• Where can I find raw data and interpretations of dynamic tests?

• Why is geology an important basis, for understanding test results?

• Who are the specialists and when should I contact one of them?

Presentation title

Presenters name

Presenters title

E-mail address ……@statoil.com

Tel: +4700000000 www.statoil.com

2014-08-04 30 Classification: Open