What does it mean to manage reserves and assets in the context of the oil- and gas-production business? It really means making the right decisions under significant, yet potentially calculable, uncertainty. Whether you are a small independent or a large state-owned oil company, you face many of the same problems—only the scale or magnitude is different. In our industry, we face more than our fair share of uncertainties in managing assets. Those "unknowns" are pervasive throughout the many aspects of oil and gas exploration. A few of the more significant ones are as follows:
Geological (structure)
Petrophysical (rock properties)
Drilling success
Effectiveness of completions
Drive mechanism (recovery efficiency)
Political (country risk)
Contractual complexities and reversions
Timing of first oil for new developments
Impact of weather
Product price
This set of uncertainties obviously comprises a nonexhaustive list of the many factors that should enter into the review and planning processes. In spite of the unknowns that complicate our work, we still need to make decisions—decisions that are made to maximize true asset and/or shareholder value. As engineers, we can help to make those decisions the correct ones by providing decision makers with as much relevant information as possible, along with the appropriate risks and uncertainties associated with that information. Many times, we make less-than-optimal decisions because of a lack of desired information. However, we continuously strive to make the best decisions possible on the basis of the data at hand. The papers highlighted in this segment should help illustrate some ways that others are reducing uncertainty to help make their decisions the correct ones. In addition, some of the referenced papers help provide guidance and consistency in the reserves-estimation process. Ultimately, that type of consistency will reduce the uncertainties of asset valuation and improve asset management.
Reserves/Asset Management additional reading available at the SPE eLibrary: www.spe.org
SPE 107709 "Beyond Portfolio Optimization" by L.C. Faya, Constellation Energy Commodities Group, et al.
SPE 109012 "Reservoir-Management Aspects of the Rejuvenation of the Forties Field, UKCS" by Owen Vaughan, SPE, Apache Corporation, et al.
SPE 110617 "Methods for Incorporating Costs, Pricing, Gas Shrinkage and Transport Tariffs, NGL and Inert Revenues, and Working Interest in Gas Plants and LNG Projects Into Reserves Estimates" by John McLaughlin, SPE, Ryder Scott Company, et al.
