Professional Documents
Culture Documents
Your company has purchased a 50% interest in the blocks #10 and #24 immediately adjacent to
Angola, West Africa. The blocks were acquired in the bid round in September, 2002. The leases
expire in the year 2015 if there is no proven or potential commercial production demonstrated
at that time.
Block #10 was targeted for an immediate exploratory well, which was drilled in November,
2002. This well produced with an AOF (Absolute Oil Field) of 2500 STB/day from approximately
180 360 ft of net pay in the Pliocene. Two subsequent deeper wells were drilled west in
Block #24, proving those reserves. Two other extension wells were found to be dry, but could
be used as injection wells.
Water depths vary from 500 ft in the eastern portion of block #10 to slightly over 6000 ft in the
western portions of Block #24. The average water depth at the initial drill site for the
exploratory well was 550 ft.
Each of the structure shown on the attached maps is based on 3-D seismic. The features are not
named. You should provide a name or designation for each structure.
Based on initial well, it is projected that the average shallow water department oil well will
produce 5000 bopd and that wells in deep water will produce up to 15000 bopd. Well
production rate will be constant for 2 years, with 20%/year constant decline thereafter.
Abandonment is expected in 25-30 years time or when reserves are depleted. Reservoir
porosity and perm is 0.25 and 500mD respectively, and each well is projected to drain up to
approximately 1 sq mile. (See attached field data sheet).
Although the reservoir pressure is high, it is expected to decline after the 4 th year of production.
Hence, water injection will need to be added in the 3rd year of production for the oil fields.
The oil produced from the field is light (31 deg API). The oil has a producing GOR of 600 scf/stb
and this GOR is expected to remain relatively constant.
Angola is an area of high activity (read attached articles) and you should consider that as you
formulate your development plan. You may assume shared facilities or use offshore based
facilities which currently being planned. You must provide a use for the gas or re-inject it into
the reservoir. (No flaring is allowed now offshore Angola). You may use any resources that you
like to complete this project, but all resources should be copied, attached and correctly cited.
FORMULATE A DEVELOPMENT SCHEME
Tasks you should complete:
1. Obtain a three ring binder to accumulate and organize your work (TEAM NOTEBOOK).
This binder will be submitted as if you were sending it to management for approval, or
presenting it to a bank to obtain project financing.
2. Make a team of five people, and break down the tasks. You may want to have people
with skills in Drilling, Well Design, Production, Economics, Geo-mechanics and Offshore
Facilities. Vote for a team leader. Team leader will be responsible for QC the whole
project and organizing between the members. In addition, team leaders are supposed to
meet with Instructor on regular schedule for updates and questions.
3. You should type all written text, dividing the note book into logical sections with tabs
(alternative development scenarios), and include a letter of transmittal to Dr. Salehi
which summarizes the main aspects of one development scenario that you would
recommend, based on your work.
4. Include a brief written description of the discovery and prospect. Include clean copy of
reservoir map.
5. Determine the number of wells required to produce each structure, assuming that all
future exploratory wells are successful. Include a sheet showing how you calculated the
number of production and injection wells to develop the structures.
6. Develop a well design plan including the mud weights for each section based on having
the mud window from the offset logs, directional drilling plan, casing design, hydraulics
and contingencies*
(You may assume horizontal or multilateral wells but if you do, well costs should increase
by an appropriate factor).
7. Assuming one of the wells is tested @ a constant rate of 1500 stb/day for a period of 100
hours. It is suspected from seismic & geological evidence, that the well is draining an
isolated reservoir block which has approximately a 2:1 rectangular geometric shape &
extended drawdown test is intended to confirm this. Reservoir data & following bottomhole pressure recorded during test are detailed below:
h = 20 ft
Ct = 15.10^-6 psi^-1
rw = 0.33 ft
= 0.18
o = 1 cp
Bo = 1.20 rb/stb
Time (hrs)
0
1
2
3
4
5
pw (psi)
3500 (pi)
2917
2900
2888
2879
2869
Time (hrs)
7.5
10
15
20
30
40
pw (psi)
2848
2830
2794
2762
2703
2650
Time (hrs)
50
60
70
80
90
100
Pw (psi)
2597
2545
2495
2443
2392
2341
12. Based on the number of wells you calculated, and their drilling and completion schedule,
forecast a general production stream.
13. Based on the development and construction times given as data, draw a field
development schedule for your proposed development scheme. Be sure to show the
fabrication and installation (If any preliminary studies, development drilling, etc.).
14. Develop a rough estimate of project development costs (i.e. capital costs) based on the
capital cost information given.
Note: You will need to find the cost associated with each category you specified on your
schedule. Be careful to multiply costs/well or costs/mile by the appropriate factors.
15. Based on the timing shown in your bar chart, and the total costs for each category
determined in step 12, develop an estimate of the capital costs required per year.
(For example, assume a platform costs 800MM$ to fabricate and install from June 2000- June
2002. Then, 25% of the costs are incurred in 2000, 50% are in 2001 and 25% are in 2002.
Apply this cost scheduling to all categories in your project schedule and sum the total cost for
each year).
16. Estimate the annual operating expenses for the project using the operating cost
information given.
(Note: The annual expense is normally estimated as a percent of the total project capital
costs plus any transportation charges and well work over expenses. You will therefore need
to determine a base annual operating expense and increase this expense in the years when
well work overs are likely to occur. Add transportation charges as appropriate to your
development scheme).
17. Complete the economics worksheet (you can automate this if you like) to calculate the
present value of the development scheme. Follow the instructions given under
FORMULAE AND INSTRUCTIONS FOR COMPLETING PROJECT ECONOMICS.
18. Based on your results, each group member should prepare a paragraph(s) to your team
leader making a recommendation about the scenario investigated. Is this the way to
develop the field?
DURATION
3 Months
4 Months
2 Months
6 Months
3 months/well
30 days/well
27 Months
33 Months
31 Months
22 Months
2 Months
15 days
3 Months
15 days
15 days/mile
6 days/mile
22 days/well
19 months
13 months
SPM fabrication
SPM pipeline installation
15 months
3 months
3 months
11 days
35 months
COST, MM $
Engineering management
60
Well
Producers (*)
Conventional or concrete gravity platform w/tieback
TLP w/tieback
Subsea template
Subsea satellite
Injector (*)
Conventional or concrete gravity platform w/tieback
TLP w/tieback
Subsea template
Subsea satellite
22/well
24/well
25/well
27/well
22/well
24/well
25/well
27/well
1.2/mile
2.4/mile
SPM
16.7
Production facilities
Conventional steel jacket
Foundation and topsides
Concrete gravity platform w/topsides
Floating production vessel (converted semi) w/topsides
Production/injection risers
Subsea manifolds
Subsea chokes and controls
see chart
40$/dry op ton
300
see attached sheet
LNG Facility
New Refiner on Angola Shore
(Angolan govt. to pay 60% of costs)
Refinery throughput
(*) Note-costs are for deep water wells. Shallow water wells are 40% of this cost.
$.60/MCF
600
$.50/stb
SPONSER INFORMATION
GENERAL INFORMATION
TLP (LARGE)
$600MM
TLP (SMALL)
$450MM
SPAR (LARGE)
$450MM
SPAR (LARGE)
$450MM
FPS
$450MM
FPSO
$450MM
SUBSEA PIPELINES
$3MM/MILE
SUBSEA UMBILICALS
$2MM/MILE
DEEPWATER RISERS
$4MM EACH
OPERATING RISERS
$TLP/SPAR $3/BBL
FPSO
$4/bbl.
$3.0/bbl.
$1.5/bbl.
SUBSEA MANIFOLD
$30MM
DRILLING COST
where I is the period interest or inflation rate and t Table 6 are calculated based on a
6% interest rate and t in integers (0,1,2, etc.) reflecting years.
13. Discounted cash flow. This is the cash flow for each year times that years discount
factor.
14. Present value or present worth. The cumulative sum of the discounted cash flow. That
is,
PV =
DCFt
Where,
PV = present value
DCF = discount cash flow
t = time period, year
n = number of final time period in project life
Cost
na
na
TLP
na
na
Costs, MM$
4.0/well
TLP tieback
4.0/well
Subsea template
6.1/well
Subsea satellite
6.0/well
Cost
$0.60/bbl
see previous table
($1.5/stb)
$0.50/bbl
$0.7/bbl
*Assume producing wells will require full work overs every 6 years. You can schedule well work
overs all at one tome (in a single year) or spread them over several years accommodation
would be to spread them over several years. Be sure to fully explain what you did or assumed.
TABLE 1
OIL RESERVES
Structure
Recoverable # of
Oil
Producing
(MMBO)
Wells
Required
Name
Name
3594
8.5
1.94
Name
4744
10.9
3.88
Name
7187
15.0
5.82
99.4
36.86
Total
25.22
# of
Injection
Wells
Required
TABLE 2
PRODUCTION PROFILE (per producing well)
Year
Downtime
%/year
Annual
Production (*)
Comments
770
770
770
700
660
600
525
295
265
Lower Gdansk
abandoned
10
245
Project economic
limit of upper
Gdansk
Total