Integrated Visualization of Subsurface Appraisal and Field Development Plan - A Key Input to Support Post Discovery Capital Intensive Investment Decisions

Abstract

After a field discovery, E&P companies spend billions of dollars every year for subsurface appraisal. Most often, the appraisal decision is difficult and tortuous, lacks transparency and objectivity, and the level of appraisal is less than optimal which affect the full cycle project economics. This paper is an effort to manage uncertainty through appraisal by quantifying its impact on the field development plan and overall project profitability. An integrated approach of selecting appraisal well location and their sequencing using standard discounted cash-flow analysis was adopted to calculate commercial value of a project in terms of an economic indicator considering different uncertain variables, their dependencies and correlation between them. To quantify the specific appraisal activity benefits, in terms of uncertainty reduction and its economic reward to the field development plan for an offshore clastic reservoir discovery, the Value of Information approach along with decision tree analysis was used and a comparison between different evaluated scenarios was made for an optimal appraisal selection. This method has helped prioritizing the appraisal locations including their sequencing, ensuring that appraisal plan adds value and allows management to understand the post discovery risks/opportunities for future investments.