Technology Focus: Reserves/Asset Management (December 2015)
- Greg Horton (Retired) | Barbara Pribyl (Santos)
- Document ID
- Society of Petroleum Engineers
- Journal of Petroleum Technology
- Publication Date
- December 2015
- Document Type
- Journal Paper
- 56 - 56
- 2015. Copyright is retained by the author. This document is distributed by SPE with the permission of the author. Contact the author for permission to use material from this document.
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The oil and gas industry has undergone dramatic change in recent times. On one hand, technology has driven an increase in availability of supply, primarily from unconventional sources. Concurrently, global economic and political influences have resulted in sustained oversupply of oil and gas, despite declining demand. The effect on the industry has been to return to operating conditions not seen for decades, with sustained low prices and sluggish demand forecast to continue at least in the near to medium term.
The solution space for oil and gas companies to stay viable during this difficult period is challenging and cannot be reliant on external factors of rapid price increase, uplift in demand, or reduction in supply. Instead, companies need to find efficiencies within their capital- and operating-cost base and to examine closely and make optimal use of their assets. “Business as usual” no longer exists, and companies must challenge every aspect of their business—at strategic, tactical, and operational levels, underpinned at all times by sound and unbiased technical and commercial work.
The suite of papers in this feature addresses various aspects of these critical business requirements. At the strategic level, the importance of using a robust framework for ranking exploration, appraisal, and development projects in order of commercialization maturity, as embodied by the Petroleum Resources Management System promulgated by SPE, is discussed in paper SPE 170747. At the tactical and operational level, the importance of systematic application of standards and guidelines for technical work and of maximizing the benefit by a truly multidisciplinary approach to decision making and development of a road map to show the way forward to optimize recovery and maximum value is described in paper SPE 175004. Furthermore, the value of look-backs and calibrating performance, to extract value from lessons learned to be used in development of realistic learning curves, is assessed in paper SPE 172973.
The need for cost and capital efficiency calls for careful integration of technical and commercial elements. Many companies will be able to cite examples of disconnect between these elements, with resultant destruction of value and loss of opportunity. Recognition of uncertainty and sound technical input into commercial and financial models are critical and, when done correctly, allow effective portfolio analysis to be conducted. Paper OTC 26061 provides an excellent overview of the elements of such an analysis.
These papers highlight the critical importance of application of overarching strategic frameworks within operating and service companies as key enablers to realizing required efficiency improvements. These frameworks must include mechanisms to consistently and objectively assess portfolios of assets, to identify their strengths and weaknesses, to provide confidence levels that reflect the inherent risk and uncertainty that exist within oil and gas projects, and, above all, to ensure best use of human capital and incorporate lessons learned from past experience. JPT
Recommended additional reading at OnePetro: www.onepetro.org.
SPE 175527 Validating Analog Production Type Curves for Resource Plays by Mark McLane, Rose & Associates, et al.
IPTC 18063 Is Your Trap Filled To Spill? by Douglas Peacock, Gaffney, Cline & Associates
IPTC 18128 The Art of Balancing the Cost and Value for Field Development by Keng Seng Chan, Petronas, et al.
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