Tag: Flexibility

Optimizing Gas Export Flexibility for Complex Offshore Reservoirs: A Brazilian Case

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Oil and gas reservoir management is associated with uncertainties and risks that can significantly impact performance and economic outcomes. The objective of this work is to present how flexibility can be used to manage risk and uncertainty, as well as evaluate the potential flexibility to export and commercialize natural gas as an alternative to water-alternating-gas (WAG) in Brazilian pre-salt fields, identifying favorable and unfavorable scenarios for its implementation. This work presents a case study that addresses the challenges and opportunities of the expected value of the flexibility associated with natural gas export.

The methodology developed presents a structured technique to assess and select optimal strategies under subsurface uncertainties and possible market fluctuations, combining asset portfolio management with reservoir simulation. One of the main advantages of this methodology is that the chance of success is determined through an automated procedure that can be obtained using the production optimization of representative scenarios. Additionally, to illustrate the applicability, we present an application case study to design flexible facilities that allow future expansion for natural gas commercialization, thus capturing possible upsides considering variations in oil and gas selling prices. We also present how these variations impact the overall design to reduce risks and enhance asset value using a simulation model designed to replicate the Brazilian pre-salt fields and forecasting the value of the natural gas in the country.

The results show that this integrated analysis addresses immediate challenges and highlights future advancement potentials through strategic flexibility in Brazil’s natural gas industry, demonstrating that well-planned flexibility can significantly mitigate risks and enhance the resilience of petroleum management strategies. By aligning sustainable petroleum production with CO2 fraction reinjection, we argue that it is more lucrative to produce the natural gas fraction at lower oil prices and that there is a balance point of WAG miscibility to gas price, coupled with enhanced flexibility. We demonstrate how it is possible to increase asset value and mitigate risks, therefore addressing a major concern for stakeholders.

Enhancing Asset Profitability with Flexibility for Life Cycle Field Development – A Comparative Study for Well Placement Allocation and Platform Capacity

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In the context of rising global energy demands that are aligned with sustainable energy supply, making informed decisions regarding investments has become increasingly complex. This complexity is particularly challenging in oil and gas management, where devising a production strategy and commencing field development pose challenges given the multitude of uncertain variables and extended timelines involved. Flexibility is key to address these uncertainties. Hence, the objective of this article is to evaluate the importance and advantages of considering the expected value of flexibility in the decision-making process to create a strategy able to deal with the risks imposed in the petroleum industry. Doing so, this article provides an examination of different approaches employed for the implementation of flexibility, considering the well placement allocations, final strategy selection, and platform capacity, thereby offering an informed perspective on this crucial aspect of reservoir strategic management.

The methodology for the construction of a flexible strategy employs theories in decision analysis combined with reservoir simulation models and optimization methods in a Bayesian probabilistic approach to access the expected value of the flexibility (EVoF). We present a structured technique to assess and select optimal strategies, specifically focusing on managing uncertainty in the initial stages of field development to identify potential platform capacities and drilling location strategies in the face of uncertainties related to reservoir characteristics, facility operations, and market conditions. To illustrate the results, we conduct a case study on an offshore benchmark field with Brazilian pre-salt features under WAG-CO2 recovery method, involving the complete reinjection of produced CO2 to mitigate greenhouse gas effects.

The results reveal that the initial strategy can highly impact the final net present value outcome and risk curves due to the first wells drilled. The results also indicate that increasing flexibility in the early stage of development could extract the best results related to financial return. Our study underscores the immense potential of integrating flexibility valuation and uncertainty quantification into the energy planning and policy-making process. It also highlights that the holistic integration between flexibility and reservoir simulation facilitates the identification of innovative investment strategies and enhances the decision-making process with the tools to navigate the complexities of uncertainty with greater confidence and adaptability.

This innovative approach offers a structured technique that not only addresses uncertainties in the subsurface reservoir and economic scenarios but also contributes to the identification of methodologies for investment management, enhancing the adaptability in the dynamic landscape of reservoir engineering.

Information, robustness, and flexibility to manage uncertainties in petroleum field development

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Development decisions for petroleum fields are costly and difficult because they involve long-term projects with complex systems and high level of uncertainties. Decision makers may reduce reservoir uncertainties with the acquisition of additional information or protecting the system against uncertainty with flexibility and robustness. Although often preferred, acquiring additional information may be insufficient to mitigate all uncertainties or may be suboptimal when compared to robustness and flexibility. This study proposes a decision framework to estimate the best approach to manage uncertainty at early stages of field development considering the combination of information, robustness, and flexibility. With a predefined set of uncertain scenarios and specialized production strategies optimized for representative models, we can automate the process. We identify the best way to manage uncertainties by assessing system sensitivity and what controls production strategy selection. We improve the traditional estimation of the expected value of information (EVoI), robustness (EVoR), and flexibility (EVoF), by accounting for all changes in the risk curve and weighing the decision maker’s attitude. Our proposal was validated in a controlled environment where the reference response is known (a reference model, called UNISIM-I-R, that is not part of the uncertain ensemble, called UNISIM-I-D). The best approach to manage uncertainty in UNISIM-I-D combined features of robust and specialized strategies, resulting in a flexible strategy with robustness. This solution increased oil recovery and the economic return in UNISIM-I-R when compared to taking no action to manage uncertainty, but was suboptimal. These results agree with the rationale behind investing in actions to manage uncertainty (such as flexible and robust strategies), which is to mitigate risks or exploit upsides of uncertainty (i.e., they are intended to prevent or explore extreme outcomes). Investing in such actions is a risky decision in itself because they may not be needed, depending on the features of the real reservoir. Our results in UNISIM-I-D demonstrate the EVoI, EVoR, and EVoF are not additive. Our results in UNISIM-I-R reveal that inherent flexibility in operations (such as in drilling of horizontal wells) may mitigate some risks, reducing the EVoI, EVoR, and EVoF. Our proposal is a good starting point for more quantitative and objective decision-making at the early stages of field development and ultimately prevents discarding attractive solutions based on biases or insufficient metrics. Some improvements may be necessary for EVoI, EVoR, and EVoF estimates depending on the stage of the lifetime of the field, among other factors.