4 Petroleum production
4.1 Appraising the discovery
Once quantities of oil or gas have been discovered by exploration drilling, the next step is to carry out an appraisal programme to determine whether the accumulation is worth developing into a producing field. To justify the move into production, the field must contain enough petroleum to repay the huge cost of development, finance day-to-day operations and still make a profit. This page and the three following outline the steps required to translate the excitement of an offshore discovery into a commercial product at the refinery, a process that may take several years because it involves a huge amount of data collection and additional drilling.
During the appraisal stage, the size of an oilfield discovery must be established as accurately as possible and the most cost-effective way to produce petroleum from the reservoir(s) sought. Geologists and engineers focus on the reservoir in particular, by attempting to provide an improved definition of the trap geometry and considering whether or not the reservoir is segmented by barriers to lateral flow, such as faults or impermeable layers that will require wells to be drilled into each segment. This work is normally underpinned by a more detailed 3-D seismic survey (Figure 7) acquired on a closely spaced grid (with less than 50 m between shot points) to provide maximum resolution. Such surveys give much more detail about the trap configuration, the depth to reservoir units and, to a certain extent, the nature of the reservoir rocks themselves.
Further drilling will improve the knowledge of how reservoir fluids (oil, gas and water) and boundaries between them are distributed. Rock properties are used to calibrate the seismic data, thereby allowing specific reservoir rock types to be mapped in areas beyond existing wells. The resulting reservoir model provides the basis for calculating the volume of petroleum trapped in the reservoir, and differing production scenarios can be assessed to determine the likely reserves that are recoverable during the life of the field.
Running in tandem with the technical work there is also a complex web of commercial, regulatory and sometimes political issues to be resolved. For example:
- How much will it cost to build, install, operate, maintain and, eventually abandon, the production facilities?
- Is the production facility to be located in an environmentally sensitive area or a shipping lane?
- How will the petroleum be transported from the well to its point of use?
- Are new tax laws envisaged that will impact profitability?
- Might the field be confiscated if the political regime changes?
The decision to commit to developing a new field will only be made when the bulk of these issues are satisfactorily resolved. The go ahead then relies on approvals being granted by the owner(s) of the asset, governing bodies and financial underwriters. It quickly becomes evident that large-scale appraisal projects are hugely complex undertakings that require careful data integration and a multidisciplinary approach.