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Planning
in
Oil & Gas Field
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PLANNING IS THE SEED FOR SUCCESSPLANNING IS THE SEED FOR SUCCESS
Without a plan, success will be difficult.
Planning defines the activities and describes how
the activities will be accomplished. Thepurpose of plan is to define each task,
estimate the time and resources required, and
provide a framework for management review
and control.
Planning is an iteration process
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Terminology
Scope: of any project is a combination of all individual tasks and their goals.
Activity They are a division of all the work that needs to be completed in
order to accomplish the project goals.
Resource is something that lies ready for use or that can be drawn upon for
aid or to take care of a need. Can be people, equipment, materials or services
that are needed to complete various tasks. The amount of resources affectsthe scope and time of any project.
Riskis any factor that potentially can jeopardize the successful completion
of a project.
Risk Management is the art and science of identifying, analyzing, and
responding to risk factors throughout the life of a project. Work Breakdown Structure is a division of tasks that define, organize, and
display the work to be accomplished to achieve the specified product or
services.
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Plan Triangle
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It is possible (and in some instances mandatory)
to setup relationships for the planned Activity
The relationship options are illustrated here:
If no relationships are set the system assumes all
activity will be start in start day of the project
(NOTE: Delays/overlaps between finish/start
are possible)
SS - start / start FF - finish / finish
FS - finish / start
SF - start / finish
EXAMPLE
A typical example of a Start / Start relationship
would where work needs to be carried out on an
offshore platform at sea level by boat. Rather
than complete each task step sequentially,
returning to shore each instance to pick up
necessary resources, it would more beneficial
carry out all task steps at the same time in asingle trip a start/start relationship.
0010 Task Step
0020 Task Step
0010 Task Step
0020 T. St
SS Start / Start
FS Finish / Start
Relationships
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Plan for Exploration Concession
Government
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Area C (88 km) located in thesouthern Gulf of Suez
Only one exploration dry well"drilled by Shell in 1988
West Tawila is juxtaposed to PicosTawila field to the west, Gemsa SE tothe north and close to south Geisum.
Detailed review of the West Tawila
block was done in house.
Bids due on 1st December 2009
West Tawila Lease
Gemsa SE Field
Geisum & Tawila
Fields
EGPC Exploration Bid Round
West Tawila Concession
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Reserves
Exploration Objectives
Profit
Company Weight
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Health Safety
& Environment
Exploration Scope of Work
Sub-Surface Studies
Drilling & Logs
Evaluation
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Health Safety & Environment
Environment Impact
Assessment
Available Location
ForFacilities
RiskAssessment
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Sub-Surface Studies
Review
SeismicAcquisition
Seismic Processing
Seismic Interpretation
Seismic Mapping
G&G Mapping
Assign Location &
Well Proposal
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Drilling & Logs
Hiring a Rig
ObtainApprovals
Secure Drilling material
Execution
Reserves Evaluation
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Drilling & Logs
Now that we have found a promising geological structure andacquired the petroleum rights, it is time to go ahead and drill.Regardless of all the sophisticated geological and geophysicalmapping that has been done, the only way to find out if there isany oil or gas present underground is to drill a well.
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Wildcat Well
WildcatWell: well that drilled into a geologicstructure in which no oil or gas has yet been
discovered. The objective of drilling is to bore a hole (thewell bore) into the ground until you penetratea target rock formation, that has beenidentified by the geologists and geophysicistsas having the potential to contain commercialhydrocarbons.
Formations may contain fluids (oil, water ornatural gas) at very high pressures, withouttaking the appropriate precautions, the fluidswould come out of the hole and we'd havewhat's called a blowout.
Drilling & Logs
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Drilling & Logs
Well Control by Blowout Preventer
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Reserves Evaluation
How Big is our Oil or Gas Field?
For in between the exploration phase and the development phase there isquite often one other phase: the delineation phase.
After drilling only one well (the discovery well), Seismic data is veryhelpful in mapping the size of the underground structure, but the only wayto be certain of what parts of the structure contain oil is to drill delineation
orstep-outwells. Each new well added more information about the field.This information was then used in planning the location of the nextdelineation well until finally there were enough wells to show the limits ofthe field.
After a field has been discovered, it must be developed so that it can beput on production and generate some cash. Developing a field involves the
drilling of additional wells to the geologic structure and installing production equipment throughout the field to facilitate commercialproduction of the oil or gas. The production phase essentially involvesgetting the oil and/or gas out of the ground, treating the fluids to removeimpurities, and taking whatever steps are necessary to keep the wellsproducing at a profitable rate for as long as possible.
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PLAN
XXXX
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Development Phase
The development plan can be generated Based on:
Volumes
P1, P2 and P3
Reservoir Characteristics
Porosity, Permeability and Pressure
Fluid Characteristics
Composition, Density (API) and Viscosity
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Definition of Reserves
Oil reserves are primarily a measure of geological risk - of the probability of oilexisting and being producible under current economic conditions usingcurrent technology. The three categories of reserves generally used areproven, probable, and possible reserves.
Proven reserves (P1) - defined as oil and gas "Reasonably Certain" to be
producible using current technology at current prices, with current commercialterms and government consent- also known in the industry as 1P.
Probable reserves (P2) - defined as oil and gas "Reasonably Probable" ofbeing produced using current or likely technology at current prices, withcurrent commercial terms and government consent - This is also known in theindustry as 2P or Proven plus probable.
Possible reserves (P3) - Possible reserves are those unproved reserves
which analysis of geological and engineering data suggests are less likely tobe recoverable than probable reserves. This is also known in the industry as3P or Proven plus probable plus possible.
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Drilling Plan
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Actual Production vs Drilling Cost
Drilling Cost Vs Production
8,800
1,2041,184
2,090
5,373
8,066
9,101
Amal 19
$4,591
Amal 16
$31,445
Amal 18
$18,595
Amal 17
$24,908Amal 15
$23,919
01,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Jan-
07
Feb-
07
M ar-
07
Apr-
07
M ay-
07
Jun-
07
Jul-
07
Aug-
07
Sep-
07
Oct-
07
Nov-
07
Dec-
07
Jan-
08
Feb-
08
M ar-
08
Apr-
08
M ay-
08
Jun-
08
Jul-
08
Aug-
08
Sep-
08
Oct -
08
Nov-
08
Production
-5,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Expenditures
Oil
GasDrilling Exp.
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Amal Field Oil Production Forecast
0
5000
10000
15000
20000
25000
30000
35000
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Jan-20
Jan-21
Oil Rate
Oil Production Forecast
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Gas Production Forecast
Amal Field Gas Production Forecast
0
30
60
90
120
150
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Jan-19
Jan-20
Jan-21
Gas Rate
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Facilities
well head&
gathering
system
inlet
separator
system
condensate
stabilizationsystem
storage
export pumpexport pump to MELIHAto MELIHA
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inlet
separator
gas
sweet.
coco22gas
dehy.
H2O vaporH2O vapor
well head
&
gathering
system
to EPCto EPC
2 nd.. f/coal.. stab.
stor.
to MELEHAto MELEHA
w.deg.
to inj.wellto inj.well
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Facilities Plan
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Facilities and Drilling Relationship
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Economics
AFDP Expenditure Profile
0
7,80
39,75
6
15,908
9,863
10,093
9,373 10,
373
13,950
4,14
55,93
06,
617
10,803
27,1
00
4,92
5
2,36
0
340
340
340
240
40
9,040
16,8
16
7,36
5
0 0 0
16,000
0 0 0 0
16,520
21,000
21,000
21,0
00
12,000
0
21,000
21,000
21,000
21,000
18,000
0 0 0 0 0
183,520
209,520
393,040
32,436
26,494
28,15
530
,449
32,2
60
31,430
30,0
09
28,
666
27,373
25,991
0
10,000
20,000
30,000
40,000
50,000
Q1-
09
Q2-
09
Q3-
09
Q4-
09
Q1-
10
Q2-
10
Q3-
10
Q4-
10
Q1-
11
Q2-
11
Q3-
11
Q4-
11
Q1-
12
Q2-
12
Q3-
12
Q4-
12
Q1-
13
Q2-
13
Q3-
13
Q4-
13
Q1-
14
Q2-
14
Q3-
14
Q4-
14
Time by Quarter
QuarterlyExpenditureCo
stMUS$
AndDailyProduction
Rate
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
CumulativeCostMU
S$
Facilities Expenditure
Drilling Expenditure
Cumulative Facilities
Cumulative Drilling
Cumulative Total
Daily Production Rate
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THE TIME VALUE OF MONEY
We will use common
symbols and cash
flow diagrams.
Timep
period0 1 2 3 4 .
Cash
flow
at each
period
($)negative
positive P = present value
F = future value
i = interest rate
n = number of periods
How long is
a time period?
Examples? Economics
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Economics
Cash Flow Diagram
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Economics
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THE TIME VALUE OF MONEY
0 1 2 . n
P F
Determine the relationships between P and F
for n time periods, with compound interest
F = P ( 1 + i )n
Meaning of compound?
How was this determined?
What is the meaning
of n, i, P and F?
What is the future value of
$1000 after 10 years at
10% annual compound
interest?
Economics
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Economics
Cash Flow Diagram
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Payback time
The time lapse from the initial expenditure
until its cumulative net cash flow become
positive.
ROI (Return on Investment)
= Cum. Income/Total Investment
NPVThe capital created over and above the
interest rate.
Economics Indicators
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