This paper developed the method and strategies to optimize well density for oilfield development projects in Technical Service Contract (TSC) framework. The main TSC terms, including plateau production, capital investment, remuneration fee, etc., were summarized as the basis of well density optimization study. 8 calculation methods were recommended to estimate the technical reasonable well density which is fit for the plateau production requirements. Incorporating with the Shelkachov equation, which reveals the relationship between ultimate oil recovery factor and well density, an investment income analysis model, not taking into account the time value of money, was derived for TSC oilfield development projects. The well density values corresponding to the maximum and zero governmentWs profit were defined as government economic reasonable well density and government economic limit well density respectively. The influence of well density on contractor's profit was further investigated. Finally, the proposed method and investment income analysis model were used in a specific oilfield of the Middle East, which shows that the contractor's profit monotonically decreases with the augment of well density S within a certain range. The strategies, including enhancing oil recovery through drilling more wells and integrated operation with oilfield service companies, are recommended to the leader contractor of this TSC project.

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