1. Svalex 2007 August 2007 Longyearbyen, Svalbard, No

2. Agenda Schedule Overview of Field Development Simulation concept Learning Points CH1 Reservoir characterization CH2 Design Basis CH3 Offshore Structures CH4 Execution plan Simulation login details

3. Schedule Wednesday 22 August 10.00 Introduction to OilSim Field Development, basics of field development. 11.00 Live demonstration 12.00 End first part ----------------------------------------------------------------- 16.00 Student expectation and comments 16.30 Simulation cycle 1 start, flexible deadlines Simulation cycle 2 start, flexible deadlines 18:30 Testing results, comments and suggestions 19.00 Course ends

4. Overview Enhance your overall understanding of hydrocarbon field development Common scenario to work on Multidisciplinary challenge You are a multidisciplinary team in charge of submitting the best technical and economic proposal for a hydrocarbon field development. Your task is to find the proposals with the best net present value and the highest Knowledge points.

5. Simulation Concept The simulation comprises four challenges in a cycle. A cycle represents the typical steps in an offshore hydrocarbon field development CHALLENGE 1 RESERVOIR EVALUATION CHALLENGE 1 RESERVOIR EVALUATION INPUTS RESERVOIR DATA ECONOMIC DATA SITE DATA EXISTING INSTALLATIONS ETC. INPUTS RESERVOIR DATA ECONOMIC DATA SITE DATA EXISTING INSTALLATIONS ETC. CHALLENGE 2 DESIGN BASIS CHALLENGE 2 DESIGN BASIS CHALLENGE 4 PROJECT EXECUTION PLAN CHALLENGE 4 PROJECT EXECUTION PLAN CHALLENGE 3 FACILITIES AND CONCEPT SOLUTION CHALLENGE 3 FACILITIES AND CONCEPT SOLUTION RESULTS NET PRESENT VALUE KNOWLEDGE POINTS RESULTS NET PRESENT VALUE KNOWLEDGE POINTS

6. Simulation concept Get Challenge Analyze Surveys Submit Answers

7. Simulation concept CHALLENGE 1: RESERVOIR CHARACTERIZATION Study the formation and its fluids to determine production profile and drilling schedule CHALLENGE 2: DESIGN BASIS Consideration of Financial, Environment, Process and Risk Factors to set the basis for the project development CHALLENGE 3: INSTALLATION AND CONCEPT SOLUTION Evaluation of different installations and operational options to produce the hydrocarbons in place CHALLENGE 4: PROJECT EXECUTION PLAN Plan the execution of the project from drilling to start up, choosing different providers and determining the time for each milestones

8. Simulation concept Every time that a cycle is completed, the NPV of that proposal and the KP are calculated. Completing several cycles will allow you to consider other options and evaluate its impact. Winning team: best combination between NPV and KP

9. Learning points How to estimate oil in place. Surveys used for reservoir characterization. The importance of design basis. Different concept solutions and facilities used in an offshore field development, according to their technical capabilities and SHE (safety, health and environment) issues. Offshore Execution plans and providers selection.

10. Structure Challenge 1 ◦ Type of reservoir ◦ Porosity ◦ Permeability ◦ Pay zone ◦ Drive mechanism. Challenge 2 ◦ Site conditions ◦ Environmental conditions ◦ Financial and economics ◦ Fluid processing capacities ◦ Facilities requirements ◦ Operational strategies ◦ Recovery factor. ◦ Production Profile ◦ Drilling schedule ◦ Hydrocarbon quality ◦ Knowledge points ◦ Design constrains ◦ Knowledge points

11. Structure Challenge 3 ◦ Identify the concept solution ◦ Place the structures ◦ Place the sub sea systems ◦ Connect elements Challenge 4 ◦ Activities Plan ◦ Activities providers and contractors ◦ Cycle closure and technical results. ◦ Concept Solution ◦ Type of structures ◦ CAPEX investment ◦ Knowledge points ◦ Execution plan ◦ Net present value ◦ Total Knowledge points

12. Challenge 1 Reservoir Characterization Fill in form

13. Challenge 1 Reservoir Characterization Surveys Each task is explained in the glossary, to solve them you may need surveys or formulas, if any doubt arise, you should contact the facilitator and ask for extra help.

14. Challenge 1 Reservoir Characterization PVT ◦Pressure-Volume-Temperature (PVT) that describe the physical property and phase behaviour of a hydrocarbon mixture.  Description of phase behaviour  Identification of potential solids problems  Measurement of viscosity for fluid mobility  GOR, compressibility and shrinkage data for reservoir  Recovery estimates  Input for EOS and reservoir modelling

15. Challenge 1 Reservoir Characterization PVT

16. Challenge 1 Reservoir Characterization Porosity ◦The porosity of a rock is a measure of the storage capacity (pore volume) that is capable of holding fluids. ◦Absolute porosity ◦The effective porosity.

17. Challenge 1 Reservoir Characterization Porosity Porosity value Classification [%] ◦0–5 insignificant ◦5–10 poor ◦10–15 fair ◦15–20 good ◦> 20 excellent

18. Challenge 1 Reservoir Characterization Permeability ◦The permeability is a property that expresses the capacity of the porous medium to transmit fluids. ◦It is a dynamic variable ◦Measured in millidarcy ◦The symbol is k. ◦Greater permeability, in general, corresponds to greater porosity, but this not an absolute rule ◦Permeability is not necessarily the same in different directions. ◦In general, the horizontal permeability is greater than vertical

19. Challenge 1 Reservoir Characterization Permeability Permeability value Classification [mD] ◦1–10 poor ◦10–100 good ◦100–1000 excellent

20. Challenge 1 Reservoir Characterization Pay zone ◦The pay thickness is a portion of a reservoir that contains economically producible hydrocarbons.  To determine the height of the pay sand, well log are performed with instruments (called sondes) which are lowered down the borehole on armored electrical cable (called a wireline).  With different tools to determine several paramenters in OilSim, Gammaray and Resistivity log are the ones to be used

21. Challenge 1 Reservoir Characterization Pay zone

22. Challenge 1 Reservoir Characterization Pay zone Gamma ray log: A common and inexpensive measurement of the total natural radioactivity, measured in API units. The measurement can be made in both openhole and through casing. Shales and clays are responsible for most natural radioactivity, so the gamma ray log often is a good indicator of such rocks Resistivity log: A log of the resistivity of the formation, expressed in ohm-m. The resistivity can take a wide range of values, and, The resistivity log is fundamental in formation evaluation because hydrocarbons do not conduct electricity while all formation waters do

23. Challenge 1 Reservoir Characterization Drive mechanism The drive mechanism is defined as Natural forces in the reservoir that displace hydrocarbons out of the reservoir into the wellbore and up to surface. ◦Each reservoir is composed of a unique combination of geometric form, geological rock properties, fluid characteristics, and primary drive mechanism. ◦It has been observed that each drive mechanism has certain typical performance characteristics in terms of:  Ultimate recovery facto  Pressure decline rates  Gas-oil ratio  Water production

24. Challenge 1 Reservoir Characterization Drive mechanism

25. Challenge 1 Reservoir Characterization Well Completion ◦In Olsim an optimized performance analysis of the total producing system from the reservoir rock through the completion, well bore and gathering system is presented to the participants. They have the task to choose the size of the tubing to determine the most suitable well production rate.

26. Challenge 1 Reservoir Characterization Well Completion ◦The tubing size will affect the following among others:  Less or more production  Well intervention due to sand production  Excessive pressure drops can generate tubing failures

27. Challenge 1 Reservoir Characterization Secondary recovery/Injection The injection of either water or gas into the reservoir is usually referred to as secondary recovery. The aim of the secondary recovery is to balance the withdrawn fluids and in that way maintain reservoir pressure..

28. Challenge 1 Reservoir Characterization Secondary recovery/Injection ◦In general water flooding generates an increment in the recovery factor greater than gas injection. ◦If the formation’s permeability is low water injection rate will be low as well, so gas injection is preferred ◦If brine has to be disposed water injection will become useful to reinject it. ◦Availability and marketability of the gas have to be considered if this fluid is worth to be use in a reservoir maintenance program. ◦Gas Injector wells are usually less in quantity comparing to water injectors, but water pumping systems are cheaper than gas compression systems.

29. Challenge 1 Reservoir Characterization Results

30. Challenge 1 Reservoir Characterization Results

31. Challenge 1 Reservoir Characterization Results First oil: Fields are assumed to start production at the time given in the latest available execution plan. Production: fields are assumed to ramp up to plateau/peak production rapidly. First year production is calculated from when during the year the field is supposed to go on stream. Eventual later tie-backs are assumed to come on stream at the time given and to keep the plateau level until decline sets in. Plateau/peak level: Any information on plateau/peak level is used usually represent economically a % of the reserves. If no such information exists an estimate based on the production capacity of the existing production unit is made. The peak level is assumed to be constant until the decline phase sets in.

32. Challenge 1 Reservoir Characterization Results Decline: The decline phase sets in when prior production plus production during decline exceeds the best reserve estimate with 10 per cent. The decline is assumed to be about 20 per cent annually, and this illustrates the operators will to keep the fields at plateau levels as long as possible. Reserves : Numbers on proven plus probable reserves are used whenever the information is available. If information on oil in place is given, the most optimistic estimate of the recovery factor from the operator is used. Eventual upsides on reserves are included.

33. Challenge 2 Design basis

34. The design basis is one of the most important document in an engineer design. It will provide all necessary information to avoid misunderstanding between the technical departments involved. It will provide all the technical boundaries and capabilities for the installation design.

35. Challenge 2 Design basis Site conditions This data it is mainly use by process engineers to design equipments and pipelines regarding flow assurance and heat and mass transfer.

36. Challenge 2 Design basis Environmental conditions To define the environmental condition of the place were the development will take place, in order to choose the most suitable installation to face potential hurricane, earthquakes risk, among other factors.

37. Challenge 2 Design basis Environmental conditions Hurricane mapEarthquake map

38. Challenge 2 Design basis Environmental conditions Typhoon, after Rita hurricane After Lillie hurricana

39. Challenge 2 Design basis Financial and economics In this part it will be established all the premises to perform an economical evaluation of the development proposals. ◦Product for sale ◦Sales prices ◦Taxes ◦Investment incentives The surveys to be used are named Market statistics, and then you should read the newspaper from time to time to find out more data

40. Challenge 2 Design basis Financial and economics

41. Challenge 2 Design basis Financial and economics Reference sales products Brent for north sea West Texas for US Gulf The field product sales price will depend on: Market consumption API Contaminants, sulphur, asphaltene Field Location and others

42. Challenge 2 Design basis Fluid processing capacities and facilities Will determine the process equipment to process and conditioning the hydrocarbons. You should look at the result in ch1, and existing facilities surveys

43. Challenge 2 Design basis Operational strategies ◦Will determine which existing installation can be used to reduce capex (capital expenditure) ◦Will determine the country risk were the development is going to be carried out.

44. Challenge 3 Concept solution Choose the right installation, according to risk, and technical capabilities. Study the glossary to find hints Ask the facilitators where you can find more information about these issues

45. Challenge 3 Concept solution The concept solution will depend on many factors:  Environmental conditions  Operational criteria  Limited availability of construction sites.  Subjective preference of an owner/operator under certain circumstance like country risk and operational experience.

46. Challenge 3 Concept solution Field development options Field size, distance to existing available infrastructure or land, and seabed depth are governing factors

47. Challenge 3 Concept solution In a field development, the structure for use offshore are constructed as a drilling platform and will also be used as a production platform. The structure will act as a stabilizer and conditioning for the well production above the ocean floor. Flowline risers, helicopter landing pads, and mooring facilities for crew boats and supply boats are necessities that must be supported by the structure.

48. Challenge 3 Concept solution Fixed Platforms: ◦Sit on the sea floor. ◦They are held in place either by the total weight of the structure or by steel piles driven into the seabed and attached to the structure. ◦The group include:  jackets,  jackups,  gravity based structures,  compliant towers and its variations.

49. Challenge 3 Concept solution Floating systems: ◦The topsides are similar to the fix platforms, nonetheless because they are floating structures they have to be moored in place with tendons or wire ropes and chain in order to stay connected to the subsea systems below and not be drag by sea draught. ◦The group include: ◦Tension leg platforms, ◦Spar, ◦Floating production storage and off loading ships, ◦Semi submersibles platforms

50. Challenge 3 Concept solution 10 20 500 m

51. Challenge 3 Concept solution Offshore installations capabilities

52. Challenge 3 Concept solution Subsea layout Example: 36 wells 9 well clusters 3 tie-back systems

53. Challenge 3 Concept solution Sub Sea elements

54. Challenge 3 Concept solution Subsea elements Export pipelines Import pipelines Hydraulic pipes Electrical and signal wires

55. Challenge 3 Concept solution Development option Tie Back to an existing platform: The investment is reduced using the spare capacity in the existing platform. It is a very suitable option for small developments. Offshore to beach development: In this case onshore facilities are available, multiphase production can be transported to the shore to process it. It is a good option to reduce capex when distances to shore are short. New Stand alone development: When there are no existing installation and the recoverable reserves are large or the distance to shore is too far, New stand alone development can be considered using the platform that is most suitable for the surrounding conditions.

56. Challenge 3 Concept solution

57. Process required in the platform

58. Challenge 3 Concept solution Process required in the platform

59. Challenge 3 Concept solution

60. Artic condition

61. Challenge 4 Planning the exceution Order the activities Select the right provider to accomplish your schedule Use your common sense.

62. Challenge 4 Planning the exceution Planning the execution You may use the common sense But.. That is the less common of the sense.

63. Results Is not just money you have to do the right things.

64. Simulation environment Welcome Go to: http://fdev.simprentis.com use your user name and password provided in the Explore session