Optimizing the Development Strategy for the Block Faulted Oil field with Merak Capital Planning

Abstract

The block X is an integrated upstream and downstream development, comprising the development of oil fields and the construction and operation of pipelines and a refinery [1]. The upstream development consists of 73 fault blocks scattered in nine oil fields, in which four blocks are already in development, and the others will be under full development in the near future. The development strategies need to meet the strategic goal of maximizing the length of the stable production plateau for three production scenarios (low, base, and high) while fulfilling the objectives of maximizing the integrated economic value (NPV), fast recovery of the investment, and minimizing risks. To model the development strategy [2, 3], first, a single well economic case for each development block is created, and total production volume at economic limit is generated. It is then followed by the screening process to filter out the uneconomical blocks which do not meet the hurdle rate for the single well economic limit production volume. The economics results for each block passing the screening process are then brought into Merak Capital planning as the base for the optimization. The optimization is set up to generate three strategies which determine the onstream time options for each of the block development to meet the three strategic production plateau goals and fulfill the objectives. The business rules modeled in Merak Capital Planning [4−6,5,] represent the dependency between the onstream time and the commissioning date of the export pipelines, the completion time of the surface facilities, the size and quality of the blocks, and the distance of the block to CPF, as well as the processing capacity of the refinery. The optimization is done by using both the Lindo and Genetic Algorithm methods. For each strategy, multiple options are generated from the optimization. Based on the optimization outcomes, full life cycle economic evaluation is performed to assess integrated upstream–downstream economic value [7] of the multiple development options for each strategy. Finally, the optimal development option for each strategy to meet the company’s strategic goals is determined based on the integrated economic results of the optimized development options [8−10,9,].

Copyright 2018, Shaanxi Petroleum Society.

This paper was prepared for presentation at the 2018 International Field Exploration and Development Conference in Xi’an, China, September 18-20, 2018.

This paper was selected for presentation by the IFEDC Committee following review of information contained in an abstract submitted by the author(s). Contents of the paper, as presented, have not been reviewed by the IFEDC Committee and are subject to correction by the author(s). The material does not necessarily reflect any position of the IFEDC Committee, its members. Papers presented at the Conference are subject to publication review by Professional Committee of Petroleum Engineering of Shaanxi Petroleum Society. Electronic reproduction, distribution, or storage of any part of this paper for commercial purposes without the written consent of Shaanxi Petroleum Society are prohibited. Permission to reproduce in print is restricted to an abstract of not more than 300 words; illustrations may not be copied. The abstract must contain conspicuous acknowledgment of IFEDC. Contact email: paper@ifedc.org.