The Well Intervention Profitability Evaluation Project was aimed at applying a BP Corporate methodology (WETS, Wellwork Evaluation Tracking System, SPE 30649) to TotalFinaElf's Mature Fields.
When Oil Fields become "mature", drilling new wells may not necessarily be the appropriate solution to grab additional barrels and counterbalance the natural production decline. Progressively, TotalFinaElf Subsidiaries implement well intervention programs designed to recover or boost productivity. A wide range of such interventions is investigated and usually end up performing "spot" operations (a fracturation job, an acid job, a water shut-off ...).
Often, when spot interventions prove successful, the idea comes to generalize these proven solutions and perform such interventions more systematically (campaigns). In terms of investments, although costs usually stay much lower than drilling costs, the financial impact may still be significant in subsidiaries where profitability can be "borderline".
Therefore, assessing the real financial impact / profitability of these campaigns needs more than "basic" return on investment calculations.
In one sentence, the method is aimed at Assessing the Profitability (over the time) of a given Wellwork Intervention (fracturations, acidifications, workovers, etc…). By plotting "Cost versus Net Present Value (NPV)", one can draw "scorpion" plots gathering, in an ordered way (decreasing NPV/Investment), all interventions performed on corresponding wells. A comparison "Campain X versus Campain Y, Z,…" can also be performed.
Then, the method, applied to an intervention campaign, is a 4 step process:
Evaluate the oil gain over a significant period of time as precisely as possible using an oil field management production data base. An adjusted cost per well is also computed at this stage,
Build and run a "light" economical model, taking into account the production contract and fiscal particularities, and this for each well,
Draw the "scorpion" plots (different durations can be considered) and highlight significant wells plus particular cases on each campaign. Draw conclusions,
Plot different campaigns (if applicable) on the same chart (cumulative NPV versus cumulative cost). Draw conclusions on relative profitability.
This paper comes back first on the methodology followed, then presents the case study of Cameroon which helped calibrating and assessing the interest of the method. Conclusions on the profitability of stimulations campaigns in Cameroon were straightforward and improvement tracks could also be highlighted thanks to this method.
Often quite "marginal" in the overall activity - even locally - of an oil company, a wellwork intervention is not necessarily evaluated in details over the time on the "real" oil gain point of vue. Often, a "quick look" approach is used for determining the oil gain/profitability of a specific intervention as follows:
Wait stabilisation of oil production after the well has been put back on stream (after the intervention, an acid job for example),
Calculate the corresponding absolute oil production increase (oil gain), increase usually compared to the anticipated one,
Extrapolate the oil gain (often assumed constant) over a 6 month then a 1 year period of time for example (what we could call a "plateau" method),
State "once for all" on the intervention's benefit after this given/chosen period of time, compare with previous campaigns calculating a rough "pay-out" time with the mere equation :