Traditionally, deterministic evaluation of geologic prospects has been used to assess their economic potential. In this paper, a probabilistic method (Monte Carlo Simulation) is described for evaluation of an offshore prospect in the Former Soviet Union. In this technique, both the technical uncertainties (risks) and the variability of the fiscal terms were taken into account. Specifically, the uncertainties in the following parameters were included in our evaluation: Geologic (trap, seal, etc.), Reservoir (size, net pay, well rates, development pattern), Oil (gravity and GOR), Drilling (depth, radius of departure, fixed and variable costs), Platforms (numbers, construction time and cost), Gathering and Export Lines (size, costs), Operating Costs (fixed and variable), Capital Costs (cost index), Project (startup), Oil price, Tariff, Royalty, Cost Recovery, Profit Oil Split and Taxes. Then, the impact of the technical uncertainty on the project economics was compared with the uncertainty in the commercial terms. It was found that technical risks have more impact on project viability than the commercial risks.

You can access this article if you purchase or spend a download.