Abstract

The paper presents a methodology for optimising offshore hydrocarbon production developments, employing NPV/LCC as an economic selection criteria, including production revenue, throughout all project phases. Combining CAPEX, OPEX and Production Performance into Net Present Value (NPV) gives an opportunity to base decisions upon optimised economics over the field lifetime. In the early phases of a field development, the methodology analyse all possible solutions systematically. The method analyses the major functions necessary for field production, selecting functional solutions with highest economical potential, and combining the functions into total field development solutions. The methodology utilises aggregated data for CAPEX and OPEX (a top-down approach), and is often referred to as the 'Screening Methodology'.

Introduction

Downward trends in oil and gas prices implies reduced financial capacity in offshore oil- and gas field developments. As for the North Sea, the larger fields now seems to have been developed. The oil companies are moving towards the smaller, marginal fields. Optimising/utilisation of existing production facilities and infrastructure plays an important role in some of these developments.

These two factors, low oil prices and smaller fields, have given the developers greater challenges. From being engineering and schedule dominated environments, the lower economic margins in the oil industry have encouraged field development teams towards multi- disciplined thinking, including economists as equal participants. Approaches such as Total Quality Management (TQM), Systems Engineering, Concurrent Engineering, Economic Optimisation and Minimum Facility Engineering have become an ever more important part of field development activity. Reducing total cost also implies more efficient field development projects. Reducing time and manhours spent in project developments have therefore led to search for efficient project execution methods. This paper deals with a methodology for optimising the main functions necessary to produce an oil or gas field, and to compile the total development scheme that gives the optimum rate of return on capital invested.

2. RECOGNISE THE NEED FOR ECONOMICS AS THE BASIS FOR DECISIONS.

Economic measurement parameters, (such as NPV) allow the impartial and rational assessment of technical alternatives from all sources by a common criterion. Historically, difficulties in the use of such measures have arisen due to analysis resource limitations, Organisation and data flow constraints.

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