Executive Summary

Behrooz Fattahi, Aera Energy LLC
Alan Johnson, Shell EP Solutions UK

Executive Editors of  SPE Reservoir Evaluation & Engineering alternate writing the Executive Summary. This issue's summary is by Alan Johnson.

In an editorial a few months ago, I discussed with you my views on applying the appropriate level of detail in our work. Since then, I have been planning a follow-up editorial on the levels of detail required of us by our companies or clients. I have often found myself railing against the strictures applied by the so-called “80:20” or “fit for purpose” guidelines and the resulting limitations that I perceive they put on my scope of work. My initial intention had been to write an eloquent indictment of such shortsighted approaches; however, on more considered thought, I recognize that some degree of balance is required.

In a commercial industry such as ours, the required level of detail represents how much the organizations we work for are prepared to pay, or how long they are prepared to wait, for our results. It also represents the value that those organizations put on the work we do. Such considerations perhaps do not apply so strongly in the more academic fields, but in a commercial world, they will never be entirely absent.

When I worked as an independent consultant for a few years, this was also less of an issue for me; consultants and, to some extent, service companies can take a shorter-term view and should be happy to deliver what has been agreed with the client. Indeed, I have sat on the other side of the fence, waiting for results from a “perfectionist” consultant who has missed his delivery deadline by trying to cram, say, 2 months of work into an agreed 3 weeks.

In working for a number of different operating companies, I also have come to recognize the need to take a longer-term view, such that a little extra time spent on one study can also lay the foundations for future work, without the whole process having to be visited again, at greater eventual cost.

Returning to the famous “80:20” rule, this expression resulted from the work of the 19th century Italian economist Vilfredo Pareto, who observed that in Italy, 80% of the wealth was held by 20% of the population. This principle has been found to apply in many economies and is based on an observed power-law relationship between cumulative value and cumulative percentage of the population (Ball 2004). As such, this principle has potential for application in other fields, such as management, where the famous maxim that 80% of the value is gained from 20% of the effort is often quoted.

As an aside, I wondered whether it might also apply to petroleum reservoirs, with perhaps 80% of the productivity being gained from 20% of the reservoir rock. In the example I checked, I found that 20% of the productivity (in terms of permeability thickness) came from less than 5% of the rock, this probably being the result of a limited number of high-permeability streaks. Nevertheless, this may be an area worthy of further investigation.

In my own area, petrophysics, a second oft-quoted maxim is that 60 to 70% of petrophysical work is data preparation, log shifting, editing joining, and core-data integration; it is only the last 30 to 40% of the effort that produces any external value at all. This can lead to conflict between the need for securely founded analyses and the commercial/time pressure to achieve these at minimum cost and with realistic deadlines.

As I said before, my first reaction to any limitation on what I see as my technical integrity tends to be direct opposition, which, from the other side of the fence, is probably regarded as unrealistic perfectionism with no regard to realistic deadlines. The eventual solution must lie in some form of compromise, one which goes to neither extreme. I now believe the answer lies in the realistic management of uncertainties. My original university degree was in physics, where, in all experimental work, a result is not complete without a detailed analysis of its underlying uncertainty.

The oil and gas industry is, by its nature, highly uncertain. Indeed, it is almost a miracle that we are able to achieve the levels of accuracy that we do. In any analysis, the progress from a 1-day quick estimate to a full-blown study of perhaps many months, the gain is not so much in the actual result, which may end up as a higher or lower value, but in the reduction in uncertainty and the resulting increased confidence in the final answer.

The key message, therefore, in the dialogue with the users of our results, be they decision makers or just the next stage in the data flow, is to quantify and articulate the price, in terms of reduced confidence level, that must be accepted for a less-than-complete answer. Very often, for a quick decision, this price will be acceptable, but in other cases the required level of accuracy may well support more extensive work than originally envisaged.

In this edition of the journal, we have 10 excellent papers covering a wide range of subjects, within which you may find ideas that not only help reduce the uncertainties in your work, but also perhaps help you to work more effectively and achieve even more in the high-value 20% time portion of your projects.

Reference

Ball, P. 2004. Critical Mass: How One Thing Leads to Another. London:Random House Ltd.