1. Seismic uncertainty - who cares? Eivind Damsleth Norsk Hydro ASA

2. Outline Introduction The role of seismic information The importance of seismic information Integrated total project uncertainty

3. Reservoir information

4. Outline Introduction The role of seismic information The importance of seismic information Integrated total project uncertainty

5. Different faces of seismic Exploration Bulk volume Static properties Dynamic properties

6. To identify potential discoveries from seismic is the prime task of an exploration geophysicist. Key uncertainties: –Is the feature real? –Are the other necessary conditions fulfilled? Seismic in exploration The development of DHIs has added another dimension. Main uncertainties: –Are the observed DHI(s) real? –Can HC be present without DHI?

7. Establishing the bulk volume Seismic interpreta- tion establishes the reservoir boundaries. Main uncertainties: –Tracing the seismic reflectors –Faults (location, throw) –Depth conversion

8. Filling the “box” Seismic attribute analysis can contribute signifi- cantly to a more precise modelling of inter-well reservoir properties, e.g. seismic impedance  porosity  facies. Main uncertainties: –Weak relationship –Scale - vertical resolution in particular

9. Dynamic properties 4D (time lapse) seismic can “see” how the fluids move in the reservoir, and provide information on permeability, high perm. streaks and barriers. Main uncertainties: –Vague seismic response –Scale and localisation –Non-uniqueness

10. Outline Introduction The role of seismic information The importance of seismic information Integrated total project uncertainty

11. A simple model Reserves = Hit*GRV*NTG*  *(1-S w )/B o *R f –Hit:Discovery indicator = –GRV: Gross Rock Volume –NTG:Net to Gross ratio –  :Porosity –S w :Water saturation –B o :Shrinking factor –R f :Recovery factor 1 if discovery 0 otherwise {

12. Contributions to subsurface uncertainty Example: Additional reserves in a prospect near an existing installation Geology fairly well understood Average parameters with uncertainty

13. Monte Carlo results GRVNTG x Pot. res. = Bo/Rf x So x PHI x Reserves = Hit x

14. Impact of the different elements

15. Outline Introduction The role of seismic information The importance of seismic information Integrated total project uncertainty

16. Integrated uncertainty Uncertainty evaluation in a traditional, sequential development Geo-Geo-Petro-Res.Tech.Economy physicslogyphysicseng.facilities time value

17. Integrated uncertainty Independent multiplication of the discipline uncertainties Geo-Geo-Petro-Res.Tech.Economy physicslogyphysicseng.facilities time value XXXXX= Reserves

18. Integrated uncertainty No. wells CAPEX Profiles OPEX Reserve s Price Capacity Timing Geophysics Geology Petrophysics Res. Eng. NPV

19. Why integrated uncertainty analysis ? Better input data quality Improved methodology Better description of dependencies Better decision basis + + =

20. Integrated uncertainty evaluation Requires a model which describes the uncertainty in the different discipline contributions –usually provided by the disciplines own evaluations handles the major interrelationships (dependencies) across discipline borders

21. Reservoir / underground disciplines The location of ”the box” The size and shape of the box Property variability inside the box HCPV volumes How to produce the box optimally What goes into the box (injection profiles) What comes out of the box (prod. profiles) Usually the dominating source of the total project uncertainty Interacts strongly with drilling, engineering, field development and operations Typical challenges: Lack of data Data uncertainty Data utilization What is enough infor- mation to make the right decision?

22. 0 0,2 0,4 0,6 0,8 1 1,2 13579 111315171921 Years of Production Production Rate 0 1 2 3 4 5 6 7 8 9 P10 profile P50 profile P90 profile Production profile uncertainty

23. Engineering - main elements The total CAPEX is the sum of all requirements for: wells –central –distributed (SS) –future process and support systems transport HES

24. Operations (Initial) CAPEX is fixed It’s in the operation phase all reservoir- and OPEX uncertainties are actually realized –reservoir changes due to dynamic information –well program and development plan will change –need for well interventions –regularity Operations must be involved in the uncertainty evaluation to get these elements “right”!

25. Economy Economy is the facilitator –Translates input from the various disciplines to a common unit: MONEY –Calculates the key economic indicators, i.e. the basis for decisions Economy may “introduce” additional risk elements: –price uncertainty –taxes Economy “controls” the discount rate used in NPV calculations

26. Results from concept evaluation: Net present valueBreak-even price

27. The integrated approach enhances multi-disciplinary work, overall understanding and motivation Communication of uncertainty –Which uncertainties arise from my area? –Which do I receive? –Which do I pass on? – ‘Know thy neighbor’ leads to better overall understanding Understanding how early decisions affect later actions A common platform for communication between scientists and management. –More cost efficient problem solving Participation  ownership  acceptance of results Openness about uncertainty and sharing of information is necessary to avoid repeating earlier mistakes

28. Tools are means, not objectives ! The process is often more important than the results Simple ”back-of-the- envelope” calculations may sometimes be sufficient Tool discussions can often get very intense, and remove focus from the real objectives BUT: Good tools contribute to the work process: –ask the right questions –puts demands on input data Good tools provide a common meeting ground –links individual contri- butions to the totality Tools are needed to perform complex calcu- lations and simulations

29. Some relevant tools: (more or less in chronological order) Lichtenberg method: Focus on process, very simple model Excel ”add-ons” for Monte Carlo simulation: @RISK and Crystal Ball Definitive Scenario: General software for uncertainty analysis PetroVR: Specialized tool for integrated analysis of field development projects (Caesar, Houston) Decision Support System (TNO, Delft) Demo2000: Integrated Risk Management (DnV/KOGAS/Corrocean) Total project risk (IPRES/ABB/Terramar) Several others: –Landmark –Merak (Schlumberger) –Ingen Technology –

30. Models don’t make decisions! We can never compute the right decision The point is to summarize the profes- sionals’ views of the uncertainty Uncertainty analysis covers only the quantifiable part of the full decision basis The key is a constructive collaboration between the computer and the brain!

31. Conclusion Seismic uncertainty - who cares? Most people should !!