INTERGRATED OILFIELD MANAGEMENT

• Dr. Nguyen Xuan Huy

Nguyễn Xuân Huy 1

 Chapter 1: Introduction
• What is oil-field Integrating Management ?

Nguyễn Xuân Huy 2

Oil & Gas Block, North Vietnam

Nguyễn Xuân Huy 3

Oil & Gas Block, Central Vietnam

Nguyễn Xuân Huy 4

Oil & Gas Block, Central Vietnam

Nguyễn Xuân Huy 5

Cuu Long basin

Nguyễn Xuân Huy 6

Nguyễn Xuân Huy 7
Nguyễn Xuân Huy 8
Nguyễn Xuân Huy 9
Nguyễn Xuân Huy 10
Nguyễn Xuân Huy 11
Nguyễn Xuân Huy 12
Offshore area has a great potential for future field
developments projects, however they are
characterized by:
1. High ecological risks
2. Challenging environment for operation and
construction
3. Huge money investments

Nguyễn Xuân Huy 13

 Field Development Planning (FDP)

Field Development Planning is the process of evaluating multiple

development options for a field and selecting the best option
based on assessing tradeoffs among multiple factors:
 Net present value, typically the key driver of decisions for
publicly-traded operators.
 Oil and gas recovery
 Operational flexibility and scalability
 Capital versus operating cost profiles
 Technical, operating and financial risks.

Nguyễn Xuân Huy 14

 FDP Integrated Team
An integrated, multidisciplinary team approach is required for a
proper FDP definition. The team should include the following
professionals:
•Geologists responsible for geological and petrophysical works.
•Reservoirs engineers responsible for providing production
forecast and economical evaluation.
•Drilling engineers responsible for drilling offshore drilling
systems selection and drilling operations.
•Completion engineers responsible completion design and
operations.
•Surface engineers responsible for designing/selection surface and
processing facilities.
•Other professionals, if needed, such as pipeline engineers, land
manager, etc. Nguyễn Xuân Huy 15
 The life Cycle of a Petroleum Reservoir
The major phases are:
 Exploration Survey to find a new reservoir in a known field or to extend the
limit of a known oil or gas reservoir.
 Discovery
 Appraisal to establish the limits of the reservoir, the productivity of wells in it
and the properties of the oil or gas)
 Field Development Plan (FDP) definition: If appraisal wells show the
reservoir to be technically and commercially viable, the Oil Company will produce
a development plan which will be submitted to the relevant authorities.
 Drilling and Completion (Field development)
 Construction Production
 De-commissioning

Nguyễn Xuân Huy 16

From Exploration to Decommissioning

Nguyễn Xuân Huy 17

 From Exploration to Decommissioning

Identification of a Clear Target based on the

data collected during the field appraisal and
in line with company strategy.

Use the reservoir numerical model as a

key tool to determine the optimum
method of recovering the hydrocarbons
from the reservoir.

Nguyễn Xuân Huy 18

 Identification of a FDP Clear Strategy
Identify the most effective strategy to reach the predefined Company Target
finding a proper answer to the questions like the following:
 Reservoir hydrocarbon withdrawal strategy:
- natural depletion
- water and/or gas injection ?
 Optimum wells location and spacing ?
 Optimum plateau rate ?
 Stand-alone development or subsea tie-in to existing platform(s) ?
 Platform or subsea-to-land solution ?
 Platform concepts (e.g. floating or fixed, with and without drilling facilities) ?
 Integration with existing platform(s) or infrastructure ?
 Transport solution for oil: pipeline transport or offshore loading ?
 Transport solution for gas (compression demand, processing requirements) ?
 Design for easy decommissioning and removal ?
Nguyễn Xuân Huy 19
In choosing a development concept the following shall
be taken into consideration:
 Reservoir data
 Crude oil characteristics
 Type of Drilling and Completion
 Risk of pollution
 Geographic location
 Water depth
 Distance from Shore Base and/or Terminal
 Environmental conditions
 Soil criteria
 Functional and operational requirements
 Governing Codes of Practice
 Special or unusual Design Codes
Nguyễn Xuân Huy 20
The following risk events should be considered in order to identify
the most safety development option :
• Change of reservoir information, well type and future growth
• Damage to pipelines/umbilicals due to mooring lines or anchor
failure
• Equipment failure during commissioning and starting up
• Infrastructure/pipelines failure during installation
• Delay of infrastructure to start up
• Problems during well construction
• Control system failures during operation
• Flow assurance problems/plug formation
• Slug catcher flooding
• Hurricanes Nguyễn Xuân Huy 21
Nguyễn Xuân Huy 22
 Field Development Plan Workflow

1 • Development & Depletion Strategies

2 • Environmental Considerations
3 • Data Acquisition and Analyses
4 • Geological and Numerical Model Studies
5 • Reserves and Production Forecast
6 • Facilities Requirements
7 • Economic Optimization
8 • Management Approval
Nguyễn Xuân Huy 23
 Industrial accepted Offshore Field Development
Pan Methodology

 Phase 1: Conceptual Design - (Appraise)

 Phase 2: Feasibility (FDP definition)
 Phase 3: Detail Design (Finalize)
 Phase 4: Material Procurement,
Construction and Installation
 Phase 5: Production Start-up

Nguyễn Xuân Huy 24

Project Phases and their Objectives

Nguyễn Xuân Huy 25

 Early Planning Creates the Greatest Value
The greatest value to a project is created in the Appraise and
Select phases which involve:

• Developing a robust reservoir

model and depletion plan
• Optimizing the drilling
program (greatest recovery
with fewest wells)
• Minimizing well performance
uncertainty
• Selecting the right surface
facility plan

The spend in these phases is generally a small percentage of

total development spend but provides substantial added
value
Nguyễn Xuân Huy 26
to the project
 Planning is a Collaborative
Process
Objective is to select a development plan that satisfies an
Operator’s commercial, strategic and risk objectives
 It involves a continuous interaction between key
elements:
- Subsurface
- Surface Sub
- Business Surface
 The process requires
continuous and effective
collaboration and alignment Surface
between reservoir, well
construction, surface facilities
and commercial teams Nguyễn Xuân Huy 27
Relative Influence on Cost
 Focus of Development Strategy
To avoid uneconomic development
 To ensure safety for Person, Environment
 To ensure adequate economic return
 To derive maximum benefit from available data
sets
 To improve reservoir recovery
Emphasis on:
 Reduction of uncertainties
 Reduction of influence of uncertainties
Nguyễn Xuân Huy 29
PROPER PLANNING IS CRITICAL TO SUCCESS

Nguyễn Xuân Huy 30

Feasibility
 Does the technology exist?
 Is it technically feasible?
 Can it be built to the required size?
 Can it be installed?
 Do the risks appear manageable?

Nguyễn Xuân Huy 31

Concept Selection
 Which concept will have the highest NPV?
 Constructability and install ability issues
 Site conditions
 Potential contracting constraints
 Risk analysis

Nguyễn Xuân Huy 32

Front End Engineering Design – FEED
 Strive for a fabrication friendly design
 Strive for an installation friendly design
 Identify risks and develop mitigation plans
 Develop a manageable contracting strategy
 Develop a realistic cost estimate and schedule

Nguyễn Xuân Huy 33

Engineering, Procurement, Construction,
and Installation - EPCI Phase
 Reflects pre-sanction planning
 Focus becomes ‘work the plan’
 Inadequate planning leads to serious problems
 Recovery is expensive

Nguyễn Xuân Huy 34

Chương 1: Bài tập quản lý
tích hợp mỏ dầu khí
 First week
24 Sep – 29 Sep 2020
1. An oil company has to pay $10,000 per year, starting one year from today on a loan
obtained for five years at an effective interest rate of 8%. Calculate the equivalent present
value of these five yearly payments. The payments include both principal and interest.
2. An oil producer acquired production equipment by paying $10,000 as down payment
and agreed to pay the balance in four year-end installments of $10,000. Calculate the
present value of the annuity due at an interest rate of 8%. Note that the total number of
payments (including the down payment) is five.
3. A piece of equipment is acquired for $50,000. The anticipated useful economic life of
the equipment is 10 years. Calculate the equivalent annual cost of the equipment if the
market interest rate is 8%.
4. On January 1, 2002, a sum of $20,000 is deposited in a bank account paying 8%
interest per year. The money stays in the account for three years. Starting at the end of
year four, the money will be withdrawn in five equal year-end installments. How much
money should be withdrawn each year in order to have five equal year-end withdrawals?

Nguyễn Xuân Huy 36

5. An oil producer plans to replace certain equipment at a cost of $100,000 five years
from today. If the interest rate is 8%, how much money must the oil producer put
aside per year in order to generate $100,000?
6. Suppose an oil well produces 2,000 barrels per year in the first year of production.
The production declines by 200 barrels per year for each of the following five years.
If the market rate of interest is 8%, calculate the equivalent uniform annual
production rate. If the price of oil is $75 per barrel, calculate the present value of the
production.
7. An oil producer borrows $100,000 at an interest rate of 8% per year for a period of
three years. The loan has to be paid back in equal quarterly payments over the three-
year period, with the first payment due exactly three months from the date money is
borrowed. Calculate the quarterly payment and show the loan amortization schedule.
8. An oil producer borrows $100,000 at an interest rate of 8% per year for a period of
three years. The total loan amount will be paid back at the end of the agreed three-
year period, while interest on the loan has to be paid back quarterly over the three-
year period, with the first payment due exactly three months from the date money is
borrowed. Calculate the quarterly interest payment and show the last installment at
the end of year three.

Nguyễn Xuân Huy 37