Abstract
The paper discusses a novel workflow and tools for stochastic optimization under uncertainty aimed at maximizing the value of exploration and early appraisal assets using a public example of an East Africa offshore gas discovery.
Following an initial discovery well, the prospect enters an appraisal phase with tangible uncertainties in resource base (a P10/P90 ratio of 3.1), well productivity (P10/P90 of 2.1), and cost estimates (30%/+50% tolerance). The choice of LNG train capacity and development concept changeover point has a profound effect on asset evaluation results used for attracting new project partners.
These uncertainties raise a number of critical questions: How can a facility engineer elaborate these key parameters given the three-fold uncertainty in resource base at this project stage? Will these choices change under a random walk in oil prices or given different attitudes towards risk by the management? Does maximization of project after-tax value and of production entitlement imply identical values of control parameters in these circumstances?
The challenges are resolved by sampling the solution space with 54,000 full-cycle evaluation trials run in just over 13.5 hours using a combined power of an exploration decision support tool with fit-for-purpose and fit-to-data risks, resource, and value assessment that honors all risks and uncertainties; a workflow management tool for decision optimization based on a multiple-realization approach powered by various uncertainty and optimization methods; and a proprietary link between these two applications.
The original operator's view on the facilities concept was found to reflect a P50 of reserves uncertainty and a P50 of worldwide LNG train capacity distribution. Optimizations were performed to address five progressively complicating problem formulations. The achieved outcomes match conclusions that could be derived with a reasoned train of thought in economy-of-scale context meaning our solution is applicable for modeling situations lacking simple analytical solutions.
