Field Development Projects

The low price of oil has had an immediate effect in the planning departments of oil companies. They were forced to shift the focus and carefully rank and select only those developments that would ensure profitability in the production of oil and gas. Hence, the field-development projects need to include and consider not only a static or dynamic subsurface characterization but also the production-­systems and facilities options, to trigger profitability and establish clear break­even thresholds. More than ever, the consideration of deep water, tight reservoirs, shale oil, remote locations, or environmentally critical plays is placed under the microscope. Increasingly difficult project economics has delayed or stopped investments that were estimated to be safe and profitable before the price drop.

In this extended-low-oil-price framework, a positive economic return is actively sought by ever-incremental integration of subsurface and surface engineering, to select strategies that lower the production cost. I would like to mention that some of the key elements that enabled better economics in the most successful projects were new project designs that ensure flexibility; synergies with contractors, especially for ­supply-chain improvements; alliances; and inclusiveness of breakthrough technology. Additionally, a new trend in field development that has proved to be beneficial and that assesses profitability of production strategies is the incorporation of pilot or early- or initial-­production units to establish real project economics and boost opportunities for understanding the cost-reduction opportunities. This is a strategy incrementally applied globally by international and national oil companies. The complexities of the development plans have propelled an integration among professionals of subsurface studies, production systems, construction engineering, transportation, and even marketing teams, to an increased collaboration not seen before.

The three papers selected for this feature typify this necessary integrated approach in field developments. In these papers, as well as in those suggested for additional reading, the main factor is the integration of all elements involved in ensuring economic profitability, including subsurface studies, drilling and completion, construction engineering, production systems, technology, environmental considerations, global supply and construction integration, compliance with government regulations, synergy with contractors and shareholders, consideration of other projects’ supply chains in nearby fields, contract strategies, and even weather.  Remarkably, the academic, theoretical, modeling, and research studies have also shifted toward assessing the optimal or economic development of shale oil and gas, offshore fields, and environmentally protected areas, marking an alignment within the industry to solve the current concerns and incorporating in the studies a very practical engineering or economic approach not frequently present before.

That all the optimizations, synergies, and successes presented in the papers you will read are flourishing now is not coincidental but clearly is a result imposed by the hard times derived from the low price of oil and the accelerated pace with which we want to produce our resources. An extended-low-price era seems to have settled in, and, even if in the future 3 to 4 years the price of oil rises, the new field-development-optimization strategies we are testing and applying now will serve our industry well, optimizing and lowering the break-even thresholds for the huge resources we still need to produce worldwide.

Recommended Additional Reading

SPE 178191 Cluster Wells Applied in Wetland Environment in North Azadegan by Bingshan Liu, CNPC Drilling Research Institute, et al.

SPE 177204 Defining the Optimum Exploitation Strategy Combining Water Injection, Field Development, and Artificial-Lift Analysis to a Mature Field Through Surface and Subsurface Coupled Models by O. Espinola, Schlumberger, et al.

SPE 175531 Effect of Well Spacing on Productivity of Liquid-Rich Shale Reservoirs With Multiphase Flow: A Simulation Study by A. Khanal, University of Houston, et al.


Maria A. Capello, SPE, is an executive adviser with the Kuwait Oil Company (KOC) for the North Kuwait Asset, advancing strategic initiatives in reservoir-management best practices for all assets of KOC and diversity for all companies upstream and downstream of the Kuwait Petroleum Corporation holding. She is an experienced consultant for the oil and gas industry and an expert in field-development and -monitoring strategies. Capello has worked in Latin America, the United States, and the Middle East. She holds a licentiate degree in physics from Simon Bolivar University and an MS degree in geophysics from the Colorado School of Mines. Capello holds an honorary lifetime membership from the Society of Exploration Geophysicists and has received its Distinguished Member and Regional Service awards. She serves on the JPT Editorial Committee and can be reached at mcapello@kockw.com.

SPE advises readers that the opinions expressed in this Focus Page are those of the author, and do not necessarily reflect the opinions or policies of her employers.

Field Development Projects

Maria A. Capello, SPE, Executive Adviser, Kuwait Oil Company

26 September 2016

Volume: 68 | Issue: 10

STAY CONNECTED

Don't miss the latest content delivered to your email box weekly. Sign up for the JPT newsletter.