Management of Reserves in Mature Oil and Gas Fields

Abstract

This article, written by JPT Technology Editor Chris Carpenter, contains highlights of paper SPE 196252, “Management of Reserves in Mature Oil and Gas Fields,” by Douglas Peacock, SPE, and Andrew Duncan, SPE, Gaffney, Cline, and Associates, prepared for the 2019 SPE/IATMI Asia Pacific Oil and Gas Conference and Exhibition, Bali, Indonesia, 29-31 October. The paper has not been peer reviewed. As production of fields declines, revenues will eventually no longer cover costs. As defined by the Petroleum Resources Management System (PRMS), the Reserves class of resources is limited by the earliest truncation of either technical, license, or economic limit. If no technical or license restrictions exist, the economic limit, defined as the time when the maximum cumulative net cash flow occurs for a project, defines the date up to which Reserves may be booked. The complete paper outlines some of the challenges involved in late-life field management and how Reserves assessment may be affected. Extending Field Life Oil and gas fields can have lives much longer than initially envisioned. Fields may be relinquished or proposed for abandonment when the operator’s perspective does not allow the full potential of the field to be exploited. Organizational barriers, regulatory or commercial issues, capital- or manpower-allocation constraints, technology limitations, cost structures, and other factors may exist that, if resolved, can extend the productive life of a field or production area. Several classes of activity can be considered to extend field life while maintaining safe and profitable operations. These include the following: Cost management Incremental or alternative production Operational improvements Fiscal and commercial improvements Cost Management. A detailed understanding of operating costs, and where and why they are incurred in a production system, allows uneconomic elements of the production system to be abandoned, improving the economics of the remaining system. This can take place at the well level (high-water-cut wells) or the satellite-production-system level by consolidating production streams into a single processing facility. The overall objective is to reduce costs by ceasing uneconomic activities. This approach also may require decommissioning activities to be carried out to remove redundant infrastructure (e.g., wellhead platforms) where the continued existence of these facilities would incur costs to maintain a minimum level of structural integrity and safety. The unit costs of essential activities or services can be reduced by contract renegotiation; furthermore, alternative and lower-cost approaches to deliver the same production service may exist.