Decision-Making Process in Development of Offshore Petroleum Fields

Risk is inherent to all phases of a petroleum field lifetime due to geological, economic and technological uncertainties, which are very significant on oil recovery in development phase, the focus of this work. The acquisition of additional information of uncertain attributes and flexibility during the development are key points to risk mitigation. The Value of Information (VoI) is used to quantify the benefits of new information, giving more accuracy to the project. The Value of Flexibility (VoF) measures the benefits of adding flexibility to the project considering different possible scenarios. A new and reliable methodology has been proposed to quantify VoI and VoF based on the decision tree technique in order to combine the uncertain attributes. All reservoir models generated by the tree are submitted to parallel simulation and Geological Representative Models (GRM) are selected to represent geological uncertainties. The methodology includes the criteria used for selection of GRM, optimization of production strategies of each GRM considering the gathering of additional information and statistical treatment of the results. The methodology has been applied in a decision-making process of a giant offshore petroleum field. The field has been developed by blocks due to its physical limitations and intrinsic characteristics and the high investment necessary to develop a giant field. The contributions of this work are (1) to show the importance of VoI and VoF concepts in decision-making process in petroleum field development and the complexity of this type of decision, (2) to apply the proposed methodology in a giant offshore field modeled by parts, minimizing risks associated to the development of this type of field and (3) to evaluate the importance of the reservoir uncertainties in risk mitigation. An additional important contribution is to present the details of the use of reservoir simulation in the process, trying to obtain the best relationship between computation effort and reliability of the decision making process. Introduction All phases of a petroleum field are influenced by uncertainties. The uncertainties are, usually, associated to reservoir geological characteristics or economic and technological parameters. The geological uncertainties influence the economic results of the project; however they can be mitigated by acquisition of additional information. The economic uncertainties depend on the political, financial and economic scenarios of the E&P industry. Although, economic parameters, such as the oil price, can highly influence the project evaluation, they can’t be mitigated and have to be updated when they suffer significant variations. The technological parameters have influence mainly on production, investment and operational costs. The focus of this work is restricted to the reservoir geological uncertainties and consequently to flow characteristics. Considering offshore petroleum fields, the cost of additional information is high due to high investment and low flexibility. In such cases, the decision analyses process needs to be probabilistic, mainly when the production strategy is defined. Probabilistic methodologies have to be simplified since the process is complex; there are many possible decisions and the computational cost of the reservoir simulation, the tool employed to evaluate alternatives, is high. Each possible scenario is associated to probabilities, which are quantified trough risk analysis. The risk analysis can be applied to the various phases of the development process of a petroleum field (Santos and Schiozer, 2003). As decisions are different for each reservoir life phase, the methodologies and tools vary according to the phase. In exploration phase, the risk methodologies are well defined (Newendorp and Schuyler, 2000). In the transition from appraisal to the development phase, although the level of uncertainty is smaller, the importance of risk associated to the recovery factor may increase significantly. In this phase, various critical decisions, mainly related to the definition of the production strategy, have to be taken and the process complexity arises from high irreversible investments, large number of uncertainties, strong dependence of the results associated with the production strategy definition, and necessity of accurate reservoir behavior prediction (Schiozer et al., 2004). In this work, the decision-making process considers the uncertainty and risk associated to the geological and flow characteristics of a giant offshore field that is developed by modules. Some reasons to develop a giant field by modules are: its intrinsic characteristics, a strategy to reduce technical risks and budget and physical limitations. It is common