Comparison between Production and Economic Indicators in the Production Strategy Selection for Polymer Flooding

Abstract

Abstract The selection of a production strategy, seeking maximization of field performance according to some indicator, is a complex and important task. Choosing the indicator to be used to complete this task can lead to different results, and this choice must be carefully made to reflect the company objectives. Many companies seek only maximization of the recovery factor, neglecting costs and investments necessary to reach this goal. This may lead to a poor economic performance. Moreover, decisions that require extra investments (for instance, the use of some enhanced recovery technique such as polymer flooding) should be evaluated and taken into account in the analysis, since there are differences in the cash flow of the project options and these additional investments are important to the final decision. The objective of this paper is to compare the use of production and economic indicators in the production strategy selection, considering that there are not budget constraints or platform restrictions. The methodology consists of an optimization process using two different indicators: net present value (NPV) and oil recovery factor (RF). Three different approaches are addressed: (A) using only NPV as objective-function (OF) in the whole process; (B) using only RF as objective-function in the whole process; (C) using NPV as objective-function in the steps that the investments are not fixed (the number of wells and platform capacity are not determined yet) and changing the objective-function to RF when the main investments do not vary (number of wells and platform capacity are already determined). The application of the methodology is made in a model that represents an offshore heavy oil field using polymer flooding as recovery mechanism. The results show that NPV has advantages when considering the whole development of the field in this work conditions (no budget or platform restrictions). In this case, the consideration of the recovery factor as single indicator leads to an overestimated number of wells, resulting in bad economic performance due to high costs, even with higher oil production in relation to the optimization made considering only NPV. The advantage of using NPV is that it considers in its calculation several parameters, such as revenues from oil production, costs from oil and water production, costs from water injection, speed of recovery, and in the case of this work, the cost for polymer injection, which can affect strategy selection, mainly when comparing with other recovery mechanisms. However, when the investments do not vary significantly (number of wells and platform already defined) there is a strong correlation between oil produced and economic return, so that the optimization considering NPV or RF leads to similar results.