Production Efficiency

Guidance notes

January 2010

Contents

• Metric Principles

• Definitions

– Production efficiency components

– Total Annual throughput

– Well potential

– Plant potential

– Export potential

– Market potential

– Structural Maximum Production Potential (SMPP)

– Summary of Field Production measures

• Gas Balance

• Production Constraints

– Oil & Gas field

– Gas field producing under contract

PE Guideline - Metric Principles

– The intention of the Production Efficiency (PE) metric is to provide a tool to help

make improvements to production performance, by creating a standard to:

• Benchmark operations against

• Quantify the size and value of operational excellence opportunities

• Show the primary areas to improve performance on each metric

– PE is an objective metric, not a subjective one, so 100% PE would imply “perfect”

operations, such that additional production could only be achieved through structural

changes. Structural changes require either further investment to increase the

Structural Maximum Production Potential (SMPP) or negotiating additional Market

Maximum Production Potential (MMPP)

Definitions: PE Components

Structural Maximum Production Potential

Structural Maximum Production Potential (SMPP) is the lowest structural production potential of the well, plant and export systems including third party processed volumes*. Structural MPP is the sum over the year of the monthly MPP figures evaluated at the beginning of each month.

• Well production potential is the sum of the individual operating well flow rates tested at the optimum operating conditions plus the sum of the third party forecast well potential.

• Plant production potential is the maximum monthly throughput potential measured daily, including third party forecast throughput.

• Export potential is the maximum monthly physical potential available through ships and/or pipeline measured daily, including third party forecast throughput.

• Market Potential (applicable only to gas fields producing under contract) is the sum of the daily contract nominations for the month.

* Third party processed volumes include only processed flows and not ‘up and over’ flows

Definitions: Annual throughput definition

Total annual throughput

This is the total processed throughput which is delivered to the export* system. It includes third party volumes which undergo processing at the production facility, but not "up and over" volumes which pass through without being processed.

Total annual throughput = annual oil production (including condensate and NGL if not included in gas)

+ oil processed for third parties

+ wet gas exported* (exported gas including NGL if not included in oil, but excluding flare). This will also include any third party gas.

* For gas production, export system means all gas that is delivered off the production facilities i.e. the sum of gas exported to pipeline and re-injection. This should not include gas lift.

Definitions: Well potential

Well Potential = The sum of the individual operating well flow rates tested at optimum operating conditions plus the sum of the third party forecast well potential including gas for fuel, flare and re-injection

• The optimum operating conditions being the flow potential for a well at the minimum 1st stage separator pressure or the optimum drawdown for good reservoir management (e.g. to prevent water or gas coning and sand free flow).

• The 1st stage separator pressure being the pressure in the first separator downstream of the well in question.

• Losses due to mechanical well impairment, localised reservoir restrictions or voidage replacement at the time of the well test will not be captured by the production potential.

• An “operating well” is defined as a well that is economically viable to operate under the operating conditions of the field. This includes the potential of an operating well that is shut-in for any reason (e.g. workover, annual valve maintenance, reservoir monitoring, etc)

• If a “non-operating well” is not economic to be brought back onstream and is to be permanently shut-in or abandoned then the well flow potential should be removed from the overall well potential.

• New well potential should only be included when it is brought onstream.

Definitions: Plant potential

Plant potential = Sum of the daily throughput potential of the plant

The throughput potential is measured as the quantity of oil, gas, condensate and NGLs that could be processed over a set period of time when no interruptions occur.

Throughput potential should include gas for re-injection, fuel or flare.

The constraint on the throughput can be from any of the following; water, gas, oil processing, flare limits or water disposal limits

Plant potential should not be reduced for planned or unplanned shut-downs

New or modified plant giving additional potential for processing should only be added to the plant potential when brought onstream

The boundary between i. well and ii. plant is at the flange of the wing valve downstream of the christmas tree, so underwater equipment may be part of the plant / host facility rather than the well.

Definitions: Export potential

Export potential = Maximum volume that can be exported through the pipeline or shuttle tankers (including third party volumes if processed) and re-injection.

Daily sum of the potential export volumes through the export system without any interruptions, planned or unplanned

Re-injection potential (this should not include gas lift)

Includes oil, gas, condensate and NGL potential

Includes any pipeline specification which may limit the export volumes (e.g. maximum % water, H2S PPM, wax content)

Market constraints should not reduce the Export potential.

Definitions: Market Potential (gas fields)

Market Potential =for some gas fields production is constrained by the type of gas contract that is in place, and this can be the overriding consideration when calculating the SMPP. The monthly volume should be the sum of the daily gas nominations for that month. For the annual shut down when fields are not nominated the number should be zero.

Daily sum of the gas nominations

When reporting an individual field the total annual production should be the production from that field’s reservoir and should not include any substitution or attribution volumes.

Well availability or reservoir availability

Oil Gas Water Export Total Annual Throughput

Production

Plant potential

Losses recorded against SMPP *

*Losses include an “unallocated” category where the reasons for the difference between SMPP and Actual Production have not been determined

SMPP

Market

SMPP is the lowest constraint on production

Summary of Field Production Measures

Total Annual Throughput is the total processed throughput which is delivered to the export system. It includes third party processing volumes, but excludes “up and over” volumes.

Total Annual Production is the total produced and processed volume

Total Annual Throughput

3rd Party Gas

3rd Party Oil

Total Annual Production

Wet Gas Evacuated

Oil Production

Gas

Oil

Gas Balance

GAS PRODUCTION

3RD PARTYGAS PRODUCTION

FLARE GAS FUEL GAS

GAS EXPORT

GAS RE-INJECTION(not gas lift)

GAS THROUGHPUT

PRODUCTION FACILITIES

Production Constraints – Oil & Gas Fields

Constraint on Production for fields porducing under Contract

Structural maximum potential for each area by month MMboe

MONTH 1 2 3 4 5 6 7 8 9 10 11 12 No. of months*

% by area **

Well and reservoir potential 1.3 1.3 1.2 1.4 1.4 1.4 1.6 1.6 1.6 1.5 1.5 1.4 7 58%

Plant potential 1.5 1.6 1.6 1.6 1.6 1.5 1.5 1.5 1.5 1.6 1.6 1.5 0 0%

Export potential 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 0 0%

Market potential 1.6 1.6 1.6 1.5 0.2 0.0 0.0 0.0 1.0 1.7 1.8 1.5 5 42%

SMPP = minimum 1.3 1.3 1.2 1.4 0.2 0.0 0.0 0.0 1.0 1.5 1.5 1.4 10.8 =Annual SMPP

Actual Production MMboe 1.2 1.3 1.1 1.2 0.2 0.0 0.0 0.0 1.0 1.3 1.5 1.4 10.2

Production Efficiency % 94%

Lost Production MMboe 0.1 0 0.1 0.2 0 0 0 0 0 0.2 0 0 0.6

* - Number of months constraining production. ** - Percentage of the year when production was constrained by the category

For assistance, the above constraints spreadsheet can be downloaded from the DECC website.All gas fields which producing under contract, Operator must also complete supporting spreadsheet and send it with PE return

Production Constraints – Gas fields

Constraint on Production for fields porducing under Contract

Structural maximum potential for each area by month MMboe

MONTH 1 2 3 4 5 6 7 8 9 10 11 12 No. of months*

% by area **

Well and reservoir potential 1.3 1.3 1.2 1.4 1.4 1.4 1.6 1.6 1.6 1.5 1.5 1.4 7 58%

Plant potential 1.5 1.6 1.6 1.6 1.6 1.5 1.5 1.5 1.5 1.6 1.6 1.5 0 0%

Export potential 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 0 0%

Market potential 1.6 1.6 1.6 1.5 0.2 0.0 0.0 0.0 1.0 1.7 1.8 1.5 5 42%

SMPP = minimum 1.3 1.3 1.2 1.4 0.2 0.0 0.0 0.0 1.0 1.5 1.5 1.4 10.8 =Annual SMPP

Actual Production MMboe 1.2 1.3 1.1 1.2 0.2 0.0 0.0 0.0 1.0 1.3 1.5 1.4 10.2

Production Efficiency % 94%

Lost Production MMboe 0.1 0 0.1 0.2 0 0 0 0 0 0.2 0 0 0.6

* - Number of months constraining production. ** - Percentage of the year when production was constrained by the category

For assistance, the above constraints spreadsheet can be downloaded from the DECC website.All gas fields which producing under contract, Operator must also complete supporting spreadsheet and send it with PE return