SPE DISTINGUISHED LECTURER SERIES is funded principally SPE FOUNDATION

Transcription

1 SPE DISTINGUISHED LECTURER SERIES is funded principally through a grant of the SPE FOUNDATION The Society gratefully acknowledges those companies that support the program by allowing their professionals to participate as Lecturers. And special thanks to The American Institute of Mining, Metallurgical, and Petroleum Engineers (AIME) for their contribution to the program. 1

2 SPE DISTINGUISHED LECTURER SERIES Bridging g over Uncertainty: ty Past Performance into Forecasting Dr. Sameh Macary Chevron-Australia (previously, with IPR Group of Comp.) 2

3 There are risks and costs to a program of actions. But they are far less than the long-range risks and costs of comfortable inaction. John F. Kennedy You want a valve that doesn t leak and you try everything possible to develop one. But the real world provides you with a leaky valve. You ve to determine how much leaking you can tolerate. NASA Scientist-Colombia Project 3

4 Outline Risk vs uncertainty Probabilistic approach Different tools What s past? What s forecasting? 4

5 Simple Definition: Uncertainty vs Risk? Uncertainty: range of possible events Risk: potential gains or losses associated with particular events 5

6 Probabilistic Approach Complexity of The System (incomplete Understanding) Achievement is largely the product of steadily raising one's levels of aspiration and expectation. Jack Nicklaus, American Golfer 6

7 Please Bring Probabilistic Approach To The P Part of E&P Industry! Engineers: data is constraining!!! Geoscientists: data-departure point!!! More time, money & effort to get closer! Conservative estimates; Frequent surprises; False precision The more an E&P Co. integrates its workflow and the more probabilistic its approach in decision making, the better the Co. will perform Schroeder Bank, Prudential Financial Research7

8 Views of E&P Work Time & $$$ Conventional Tech. uncertainty Probabilistic uncertainty P10 P90 STOP Determinism Use time & $$ to find other projects 8

9 Monte Carlo Simulation Variable 1 Variable 2 Variable 3 Variable 4 Variable 5 Variable 6 9

10 Try To Follow This Way! Unification Sensitivity Diagnostic Decision Trees Information Value Efficient Frontier 10

11 Unification Cumulative and Reverse Cumulative Charts 1.00 Reverse Cumulative Cumulative or P90 P10 or P90 P10.00 Mean = Mean = Certainty is 80% from 17 to 30 11

12 Unification (Cont.) SPE # 68588, 2001 Drilling Cost $K 425; Initial Rate 100 BOPD; Effective Decline Rate 50 %/yr, Exp. Decline; Price $ 17.5/bbl, escalated 3 %/yr; OpExp $K 2/mo, escalated 3%/yr; Severance + Ad Valorem Tax total = 10% 12

13 Try To Follow This Way! Unification Sensitivity Diagnostic Decision Trees Information Value Efficient Frontier 13

14 Sensitivity/Dependencies K ф Plot: Possible Example of Dependency Misleading md eability, m Perme Porosity, fraction 14

15 Sensitivity/Dependencies (Cont.) Real Experiment Could Put an End to a Story! Wat ter Resis stivity, oh hm-m Sand B Sand da Mud Water Invasion (%) Resistivity of spun-out water from fresh core samples taken in Sand da& B. The effect of mud water invasion i is evident from Tritium content in the water samples. 15

16 Sensitivity/Dependencies (Cont.) Porosity Water Saturation Porosity Porosity Water Saturation Water Saturation Sand A (unconsolidated) Sand B (tight) Good match between core S w and the new log derived S w incorporating R w obtained from spun-out water. 16

17 Sensitivity/Dependencies (Cont.) Monte Carlo Assessment 200 MBPT Jobs (8 years) Fr requency Triangular Distribution Fr requency Log Normal Distribution No. of Jobs /Year Cost/Job, $M 17

18 Try To Follow This Way! Unification Sensitivity Diagnostic Decision Trees Information Value Efficient Frontier 18

19 Diagnostic Plots Ac ctual Re eason fo or Failure Source % re Failure Patterns!!! What Actions To Improve??? 13 Migration % Reservoir % Closure % Seal % Source Migration Reservoir Closure Seal Total Prob. Pre-Drill Critical Risk If we all worked on the assumption that what is accepted as true is really true, there would be little hope of advance. Orville Wright, , American Co-Inventor of the first practical airplane 19

20 Diagnostic Plots (Cont.)

21 Diagnostic Plots (Cont.) Rank Your Wells by Their Rates Field gets mature Ln Rank 1 st Production Phase 2 nd Phase 3 rd Phase 21

22 Try To Follow This Way! Unification Sensitivity ty Diagnostic Decision i Trees Information Value Efficient Frontier 22

23 Decision Trees Decision Trees Built Chronologically Time moves right Re-develop or abandon? 23

24 Decision Trees (Cont.) Re-develop DT Calculations 24

25 Decision Trees (Cont.) Acid Stimulation-Decision Tree Contractor Cost Success Decision 1st nd rd < $ 21 M >$21 M < $ 18 M > $ 18 M < $ 20 M > $ 20 M Yes No Yes No Yes No Yes No Yes No Yes No

26 Try To Follow This Way! Unification Sensitivity Diagnostic Decision i Trees Information Value Efficient Frontier 26

27 Efficient Frontier Efficient Frontier The Efficient Frontier contains those portfolios for which there is: > No higher value for the same risk; and/or > No lower risk for the same value. Increase Value Reward Reduce Risk Risk 27

28 Conclusions/Recommendations Summary-Performance Tracking Yet, most every corporate effort to graft Army s After Action Review (AAR) into their culture has failed because people reduce this truly innovative living gpractices to a sterile technique Peter Senge Maximize the value of your data and incorporate ranges in inputs and outputs so that Pick one range-getget two free probability distributions Sameh Macary Let Let us Learn Plan us go Measure Do go this this way way 28